Value Line recently initiated coverage of Ruckus Wireless (RKUS)  in its flagship product, The Value Line Investment Survey. Founded in 2004, the company provides carrier-class Wi-Fi solutions to service providers and corporations. As traffic and user volume rapidly increases on networks, Ruckus’ suite of products offers a reliable support system that includes enhanced performance, extended range, and larger scalability. As of December 31, 2012, the California-based company employed 669 full-time workers.

Central to Ruckus’ business are its proprietary Smart Wi-Fi technologies. These core services provide the building blocks to its portfolio of products and services. BeamFlex, a patented smart antenna system that focuses wi-fi signals to where they are needed, plays in important role in many of these technologies. This dynamic routing system allows for companies to better serve their constituents without wasting network resources on idle locations. Ruckus’ other optimization technologies include Smart Radio, Smart Qos, Smart Mesh, SmartCell, and Smart Scaling.

Ruckus derives all of its revenues through the sale of its products to its approximately 27,000 worldwide customers. The company’s hardware products, namely the SmartCell and Zone series, provide network architecture for small to large-scale end-customers. This suite provides for smoother online integration by improving access and security, eliminating service bottlenecks, and extending wireless capacity, among other solutions. Ruckus also offers a small number of software-based products, including the FlexMaster. The management service platform is used by customers to monitor and administrate large-scale networks. In essence, it configures and integrates a wide array of data for service providers to better evaluate their respective use of network resources.

The company’s top line appears to be in healthy shape. We estimate that Ruckus will grow revenues in the low double digits through 2016-2018 as its products gain awareness and popularity in the marketplace. The proliferation of smart phones and tablets, and other data-consuming devices continues to drive the need for capacity and coverage solutions. Network space is being consumed at an alarmingly increasing rate these days, so Ruckus’ unique suite of management products should experience higher demand in coming years.

The company’s growth story comes with a fair share of potential shortcomings, though. The industry is highly competitive. Cash-heavy telecom behemoths, such as Cisco Systems (CSCO - Free Cisco Stock Report) and Ericsson (ERIC), and diversified technology companies, like Hewlett-Packard (HPQ - Free Hewlett-Packard Stock Report), vie for the same market space. Also, many enterprise Wi-Fi companies offer slates of products and services that compete directly with Ruckus’ suite. As many of these corporations boast greater financial resources and name recognition, the next few years promise to be a crucial period for Ruckus’ future. Unlike big competitor’s like Cisco, it lacks significant negotiating leverage with many of its larger end-customers. Accordingly, the loss of a large order could significantly affect Ruckus’ business. So, as Ruckus fights to grow in this highly competitive environment, look for related expenses to impact the bottom line in the near term.

The need for better data management is a chief concern for businesses as they fully enter the digital age. Conglomerates and start-ups alike are striving to stay ahead of the curve, transferring data onto software and storage centers, maximizing reach to customers through digital channels, and optimizing the use of their Wi-Fi capabilities for a smoother online experience. Subscribers interested in owning a piece of  this growing telecommunications services company are advised to consult Value Line’s quarterly reports for Ruckus Wireless, as well as any supplemental reports and relevant articles as important news items arise.

At the time this article was written, the author did not have positions in any of the companies mentioned.