*Disclaimer: I was employed by PacketFabric in 2019/2020
As the year gets underway, a number of questions remain unanswered about PacketFabric's future. In mid-2021 it was reported by a financial media outlet that PacketFabric was kicking off a process to raise $75M in new capital which is supposedly being led by Piper Sandler. Now, roughly nine months later, little to no information has been revealed about the process which could lead us to believe the company is struggling to find investors in what some might call a favorable fundraising environment.
As I have written before, PacketFabric has built a solid, scalable, and high-performance network foundation, along with the mechanics that allow it to offer self-service management of data center and multi-cloud interconnection services, along with some other products, including its new storage acceleration and object storage offerings from the RStor acquisition. However, the wrong people and poor organizational dynamics have held the company back since its founding in 2015. The company only recently added a legit marketing role in 2021, when it brought on Alex Henthorn-Iwane as its Chief Marketing Officer, and that addition was very publicly visible, as basic marketing and brand activities began to surface in public forums and social media. Still, the company has only a fraction of the customers that its closest competitors have, and severely lacks a global footprint that is on-par with competitors.
This company has incredible potential, but without the right people, a high level of discipline, and the meticulous focus on executing the right strategy, that potential will never be realized. And now, the biggest question becomes—Is it too late?
PacketFabric's network is predominantly strong in the United States, with a peppering of locations available in Canada and Europe.
It’s network currently reaches 183 locations in the US, 4 in Canada, 8 in the UK, 7 in France, 3 in Germany, 5 in the Netherlands, and 5 in Australia. Through a partnership with Colt, linking networks via NNI's, the company reaches 109 additional locations across Europe.
This leaves a lot of opportunity for PacketFabric to extend its global reach, but it will still need cash to burn to make substantial progress. At this point, I believe PacketFabric's best opportunity as far as market expansion is to replicate the approach it has taken with Colt on a global scale and keep the capital investment to a minimum while it figures out how to move the business forward.
A quick look at where PacketFabric has potential to expand includes
• Hong Kong
Europe, Middle East, Africa
• More Secondary/Emerging markets
While there is plenty of opportunity globally, I’m not sure any new or emerging markets are in its sights. That said, getting in early to some markets including South America, Africa, or India could be appealing.
Also, with a pending capital raise, we don’t truly know the fate of the company, and it could also be a possibility the company exits this year in an M&A transaction.
First, PacketFabric’s problem is not the technology or product, and while the product could use some polishing and a maybe a more aggressive roadmap, the company’s engineering team along with technical product managers, led by Co-Founder Anna Claiborne appeared to have good momentum coming into 2022 having released a number of new features and functionality last year.
With a product line including data center and multi-cloud interconnection, Layer 3 multi-cloud routing, along with recent additions of data acceleration and object storage, what might we expect from PacketFabric on the product front in 2022?
• More partner / cloud integrations. Alibaba Cloud, OVH, SAP, and Nutanix are a few missing from the lineup
• Auto-Scaling - In May at Cisco ScaleX, PacketFabric teased Auto-Scaling functionality
• SD-WAN Integration - Given ties to Cisco, this should have been a sure shot. Lets see if it comes in 2022
• Fully Productized IP Transit - This was subtly mentioned in their release notes late last year, and there is an ongoing promo with PhoenixNAP, but nothing has really been said about it otherwise
• Product Marketing - While not a product, or a feature, it is something the company needs to get off their ass and do. Granted all of the cool stuff they build, they consistently fail to talk about it
• Edge Compute - Bare Metal/VMs - Given the addition of storage, if the company continues to head in that direction, it would only make sense to have compute available as well
• Security Features - The smorgasbord wouldn't be complete without security, even though PacketFabric laid off its CSO during a RIF in late 2021
• Offer customers the ability to select a dedicated circuit path, and forgo the inherent protected path functionality
While there may be apparent issues elsewhere in the organization, there’s plenty to look forward to from this company on the product front.
Go To Market
PacketFabric's early GTM strategy was to travel to conferences for the sake of traveling and going to conferences, but that's where it found a lot of its early customers and success. The company eventually attempted to invest in the channel, but couldn't quite commit, and that saw their head of channel leave for another opportunity. Now, with former Cisco sales leaders involved, there is a major focus on channel again, and you can see the strides being made. I expect this focus to accelerate as momentum builds, and there a strong upside waiting.
Beyond that, PacketFabric is likely to continue focusing on media & entertainment, enterprise, and what i call the sophisticated buyer—the network engineering leaders that easily understand the value proposition and lead to short sales-cycles.
Additionally, a focus on improving the self-service user journey and mechanics around getting onboarded could be improved, and eventually target a broader market of Developers, an DevOps-type buyers.
There’s not much new to say about PacketFabric that most folks don’t already know, which is there is plenty of potential, but the clock is ticking. If the company can’t raise the capital, the other option is to exit and the truth is that may actually be a better path forward. I think the best place for a company like this is a legacy carrier that is ready to make the commitment to transforming its operating model and excited about the potential of innovation. Well-fitted suitors could included Colt, Crown Castle, Lumen, and Zayo.