The next generation of IT networks - fueled by software.
Teneno is simplifying the world of computer networks for Small and Medium-sized Businesses (SMBs) by providing a service which until now has only been available to big corporate enterprise.
Teneno banishes the need for those industrial cabinets found in most office spaces today. Instead, it replaces expensive hardware with agile software making it more simple, flexible, secure and affordable.
Teneno makes it possible to connect all company IT devices together in a private network over the Internet. These networks can be initiated globally in minutes with no hardware or specialized IT skills needed.
With Teneno SMBs are able to:
• Access documents wherever they are;
• Access proprietary business applications wherever they are hosted;
• Geographically track and manage all the devices on the network from one portal.
“SOFTWARE is eating the world,” Marc Andreessen, co-founder of Andreessen Horowitz.
Teneno is based on Software Defined Networks (SDN), a technology concept from Stanford University, that is disrupting networks in a way not seen for many years.
Teneno aims to lead the market disruption for Small and Medium-sized Businesses (SMBs). A good analogy to this is when Voice over the Internet (VoIP) as a concept was introduced in the communications industry and Skype transformed the way that consumers placed their calls. SDN is to Teneno what VoIP is to Skype.
Today's networks are hardware based, quite complex to set up, and expensive to run. They are used to enable businesses to connect their devices and run their business applications (e.g. accounting, inventory, point of sales). SDN eliminates the need for expensive hardware and moves the network functions to software. This significantly reduces the complexity and cost of setting up and managing the network.
Teneno is using SDN to fill a needed gap for SMBs by providing them with network services they need to run and grow their businesses but cannot afford. With Teneno SMB are able to provide their employees with the work flexibility and security that usually only large enterprises could previously afford.
Substantial accomplishments to date
Teneno is now live with a small number of satisfied UK based companies using it.
Today, Teneno connects together any Apple device, Android handheld, Windows PC and Server. It enables access to documents and business applications wherever they are stored. It geographically tracks and manages all devices on the network from one portal, and much more. It also has an aggressive road map to meet all SMB IT needs.
Teneno is growing and is already a global company with offices in London, New York, and Hyderabad (India) with a lean management team and 12 experienced developers. It has successfully raised over £229k pounds from its founding members. It is looking to raise another £150K in EIS funding.
Teneno is true to its belief in simplifying the world of networking. In keeping with this we have kept our pricing model simple via a subscription model. The cost is £2 or £6 per device per month, depending on the SMB’s needs. Cloud storage and server integration are an add-on to the device subscription price. We anticipate that the service generates approximately 28% in EBIT which would include a 20% commission for partners to help us resell the product.
A typical SMB with 30 employees with two devices per employee (a computer and a mobile device) will pay £2,160 a year for Teneno versus the £6,867 per year it could take to bolt together a number of solutions from different vendors to match what Teneno has to offer.
The plan for 2016 is to use the Seedrs funding to ramp up to 150 UK based customers and to build a global distribution channel that would enable us to exceed our 2017 target of 8,000 customers.
To support our 2017 targets, we have started the process of setting up a working relationship with one of the largest global co-working office space providers to access their 20,000 customers and a US based VoIP telecom provider to access their 0.5 million business customers.
Use of proceeds
Teneno has a lean cost structure. We have developed our own development center in Hyderabad India and trained up an experienced team to develop our SDN based solutions. Our development and operational burn rate is £10K a month*. Furthermore, to achieve our 2016 targets and run our marketing, social and PR campaigns we will require another £2.5K a month to acquire customers. The £150K will last us one year.
*source: Unaudited management accounts
Teneno is ideal for Small and Medium Businesses (SMBs) between 10 and 250 employees.
The changing economy is driving SMBs to implement flexible working practices and enables ad hoc working spaces and global collaboration. This will require a flexible working infrastructure that must be delivered in a secure way in order to safeguard commercially sensitive data. However, they simply cannot afford the high costs associated with deploying and managing a traditional secure global network; and, faced with myriad of options and no trained IT staff to evaluate them, they struggle to know what to do and how to do it.
By providing a secure network and the core functionality of an advanced Device Management solution in an all-in-one, affordable, easy-to-use package, Teneno will enable SMBs to provide their employees with the infrastructure previously only enjoyed by large enterprises.
Characteristics of target market
The targeted companies make up 21.8% of SMBs - about 2 million businesses in UK & US. We believe these businesses are grossly underserved by traditional network providers and have both the need and the budget for the kind of robust IT solutions offered by Teneno.
Targeted customers characteristics:
• 83% of 10 to 250 employee companies are not yet exactly where they want to be with regard to secure technology use;
• Three of the top four strategic priorities for these businesses are around productivity, efficiency and cost savings;
• IT challenges that the customers report as needing the most work are:
o IT security (42%);
o Effectively managing and using data (42%);
o Modernizing aging equipment (39%);
o Managing increasingly complex technology (30%); and
o Getting more ROI from tech investments (28%).
Teneno was designed to address these issues and the data above demonstrates that the characteristics of our solution are tightly aligned with the IT priorities of SMBs.
Teneno is planning a two-pronged customer acquisition strategy.
1) Website-based sales: The Teneno self-serve website will be the main vehicle for acquiring customers in the first year of business growth. Customers will arrive at the website via a combination of social and traditional marketing strategies. We will employ social media and initiate an email marketing campaign directly targeting those SMBs that meet the Teneno early adopter profile. The e-mail campaign will be followed by a telemarketing campaign.
2) Global distribution channels: We believe many SMBs are looking to third parties to recommend and potentially set up and manage their network for them. We plan to partner with IT solution providers and telecom re-sellers who will help Teneno gain instant credibility (and increase their potential market) by integrating Teneno into their offerings. Third-party reseller channels will also increase Teneno’s reach and sales effectiveness. We are in the process of setting up a working relationship with one of the largest global co-working office space providers to access their 20,000 customers and a US based VoIP telecom provider to access their 0.5 million business customers.
The focus in 2016 is to establish Teneno’s market credibility. The UK is an ideal place to start as it is a distinct and manageable market that serves as a great launching pad for the faster growth that we anticipate in 2017.
The combination of being an early mover in this market, breadth of functionality, the right pricing and focus on SMBs marks Teneno out as being distinct in what it is providing. There are three potential sources of competition:
1) Traditional Telecom Providers: Telcos are very slow moving, are risk- and innovation averse and primarily concerned with the risk of revenue erosion. Teneno’s CEO, Jean Salha, has seen this first-hand. We believe telcos will do all they can to stop top-line erosion. After failing they will potentially acquire the technology they need by purchasing the leading businesses that provide it. In 2008 BT purchased Ribbit for £105 million to supplement its Voice over the Internet (VoIP) portfolio. Skype started providing VoIP calls five years earlier in August 2003.
2) New market entrants: An early-mover advantage and a very specific and what we would describe as a hard-to-acquire skill set will protect Teneno from new market entrants. A new market entrant would need to: learn about how SDN works; combine two distinct skillsets - network engineer and software developer; and build a development team with the wide range of programming skills to support the multiple platforms on which the services are offered. Teneno is at least two years ahead of any new market entrant.
3) Businesses such as Amazon Web Services pose a viable competitive threat. However, by exploiting its early mover advantage, rapidly acquiring customers, and becoming established as a leader in the Network as a Service (NaaS) space, Teneno aims to position itself as an acquisition target for the likes of Amazon Web Services rather than a business model to be imitated. An example of this is when Cradle Point, a 4G network provider, purchased Pertino, a SDN business, to enable it to more effectively deploy its 4G networks.