Businessmodel of Aquantia

Customer Segments

Aquantia has a niche market business model, with a specialized customer segment. The company targets its offerings at a handful of top players within various industries that have data centers.

Value Proposition

Aquantia offers four primary value propositions: innovation, performance, cost reduction, and brand/status.

The company places a strong emphasis on innovation. Its solution solves the problems of high-speed signaling over copper interconnect by combining two architectures: Mixed Mode Signal Processing (MMSP), which offers a differetn partitioning of signal processing between digital and analog domains, resulting in optimized power; and Multi-Core Signal Processors (MCSPs), highly-efficient multi-core processing engines. Furthermore, in 2015 its AQrate transceiver became the basis for the IEEE 802.3bz standard, the first time a firm has created a standard from its own technology.

The company has demonstrated strong performance. Its Aqrate PHY transceiver provides throughpouts that are five times faster than had been available previously through existing GB Ethernet (GbE) solutions. It enables customers to adopt wireless technology without replacing copper cabling, which led to shipments of one million ports in one year, much faster than normal.

The company reduces costs. Its solution lowers customers‘ installation expenses (the price paid to install each port) and also improves connectivity within data centers, resulting  in lower energy costs and thus overall operational and maintenance costs. It considers itself a “low-power leader.“

The company has established a strong brand as a result of its success. In 2014 it had a 70% share of the transceiver market for 10 GB Ethernet over copper wire. Also, it has won many honors. These include the New Emerging Technology Supplier Award from Cisco (2013), recognition as “Company of the Year“ at the Annual Creativity in Electronics (ACE) Awards (2014), and recognition as the “Fastest Growing Company in Silicon Valley” by Deloitte Technology (2015) for the 2011 – 2014 period.

Channels

Aquantia’s main channel is its business development team. The company promotes its offering through its website, social media pages, and participation in conferences.

Customer Relationships

Aquantia’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees.

That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

Aquantia’s business model entails designing, designing, and manufacturing semiconductors (with a strong focus on transceivers) for its customers.

Key Partners

Aquantia is part of the NBASE-T Alliance, a non-profit organization it formed with Cisco, Freescale, and Xilinx. The group is committed to the development and promotion of the 5G/2.5G technology. Over 45 companies have joined the alliance, and they fall into the following categories:

• Promoters – Partners include Cisco, Intel, Marvell, NXP, and Xilinx
• Contributors – Partners include Broadcom, Cadence, Commscope, Fluke Networks, Ideal Networks, Kinnex A, Molex, Panduit, Qualcomm, and UDE
• Adopters – Partners include Amphenol, Aruba, Cavium, Centec, Comira Solutions, DNI, FIT, GLGNET, Keysight Technologies, Mentech, Netgear, Pulse Electronics, Realtek, Synopsys, and Xena Networks ### Key Resources

Aquantia’s main resources are its human resources. They include its engineering employees that design, develop, and manufacture its products, and its business development and customer service staff.

The firm also places a high priority on its intellectual property. Lastly, as a startup it has relied heavily on funding from outside parties, raising $190.6 million from 13 investors as of April 2015.

Cost Structure

Aquantia has a value-driven structure, aiming to provide a premium proposition through frequent product enhancements. Its biggest cost driver is likely cost of goods, a variable expense.

Other major drivers are in the areas of research/development and product development, both fixed costs.

Revenue Streams

Aquantia has one revenue stream: the revenues it generates from sales of its semiconductors to customers.