Young Barix finds networking niche

Barix is not CEO Johannes Rietschel's first venture (Barix) swissinfo.ch

Targeting a niche neglected by larger networking equipment manufacturers, two-year-old Barix, based in Zurich, is makes multi-protocol communications boxes that enable home networking and building automation.

This is not the first venture for CEO Johannes Rietschel, who established the company in 2001.

The previous year, he sold Alcoa, a German-based hardware manufacturer to Lantronix, a NASDAQ traded firm that sells server-side equipment to companies that create remote computing and networking applications.

The founders had such a good relationship with Lantronix’ majority shareholder, the German entrepreneur, Bernhard Bruscha, that they were able to raise around SFr 3.2 million ($2.33 million) to fund Barix’s market development.

The company aims to break even in 2004, but recently closed deals with customers that “strongly indicate” this might happen even earlier, according to its CEO.

Its products include, Exstreamer, a box that enables users to send digital audio and MP3 libraries from the PC to stereo systems via diverse network standards, such as Ethernet, WiFi (802.11b). It also sells Barionet and Defconlock, products targeted at networked homes, businesses, building and plant managers.

The company’s specialty is support of multiple communications protocols across industries and sectors. Its products are designed to support consumer electronics end users, as well as industrial and home automation applications.

ODM

With 10 employees in Zurich and manufacturing outsourced to China, Barix could be categorized as an Original Development Manufacturer (ODM).

It develops and takes responsibility for the manufacture of new products, normally eschewing their own brand or label (unlike an OEMs or original equipment manufacturers use their own brand on boxes that may have been developed and manufactured elsewhere.)

There have been a number of such firms founded in recent years, even in high-labour cost markets, such as Microcell in Finland (now headquartered in Zug, Switzerland) and AlphaCell In Israel.

Their emergence is a result of consolidation in the supplier market and lack of innovation in the larger, established electronics firms.

Rietschel says the Swiss location for its base is advantageous for access to skilled engineers, good universities and a mild tax climate. It recently opened a subsidiary called Izy Development GmbH in Germany.

“The precision and high output in Switzerland and Germany offers us a productivity/cost ratio that is much better than in the US,” says Rietschel.

Sales and marketing

Sales are handled directly but the company also works with distributors. Grid Connect is its US distributor, founded by another Lantronix alumni, Mick Justice.

Justice says he has sold some 300 units of the Barix Xstreamer to two types of customers, MP3 enthusiasts and home networking/automation “freaks”.

He says that working with a Swiss-based company is no disadvantage. It is something he has been doing for years and it works well.

But, he says, a US vendor has to be willing to do marketing and support for European suppliers. American hardware users don’t want to be worrying about what time it is in Central Europe or how to dial the international code for Zurich.

K55, a Swiss based retailer of electronics equipment, sells two of Barix’s products. According to its CEO, Felix Moser, who has known Barix company for over two years, the startup provides good customer support and enables upgrading of the firmware on the device via the Internet.

No documentation is provided in the box, but it is available on Barix’ web site, says Moser.

Sales were better earlier on than now, which could be due to a weakness in the current product bundle, speculates Moser. There is no remote control device. If the user does not have a PDA or Web tablet then they have to use their PC for selecting music or MP3 files.

Barix says it is constantly working on improvements.

by Valerie Thompson