Meraki has changed its pricing and feature model for its mesh networking system, angering early users: Exiting its beta, Meraki has changed its pricing and service model, while requiring the display of advertising and a piece of the action for handling billing. This abrupt change, announced quietly last week, has resulted in a nascent networker revolt. It may be that early infrastructure builders abandon Meraki because to continue expanding networks, their cost structure has gone way up while control has gone way down.
The two basic nodes that Meraki sells, Indoor and Outdoor, were priced at $50 and $100 during the beta. The beta flag is gone from their site, and while you can still buy the nodes at that price, many features formerly included raise the price to $150 for Indoor and $200 for Outdoor. These prices move them into the range of what used to be much higher-priced metro-scale hardware.
Meraki's system works by having little intelligence built into nodes instead relying on an Internet-hosted administrative system to handle the heavy lifting. Adding nodes requires just some configuration via a Web site. Each node auto-discovers existing networks allowing their addition. Each gateway to the Internet added to a Meraki network increases the bandwidth pool.
The change puts tiers into effect. The Standard edition with the cheaper pricing doesn't allow billing nor user authentication, nor does it offer a custom splash page (a logo is all). Even the network name gets Meraki branding on it ("Free the Net" precedes a local name). Standard does offer a private WPA-protected network for the owners, but without any granular access control. This means that a group that wants to change small amounts for access or control access by user cannot use the entry-level version. According to the forums, this includes a lot of early networks. Standard networks also can't "whitelist" more than a handful of devices, which means that devices that lack the ability to display a Web page for authentication purposes can't even access the network. So no Xboxes, VoIP phones, and so on.
The Pro edition bypasses these limitations, essentially adding a $100 per node license for advanced control and the ability to bill. However, because several of the Pro features were previously in the only version Meraki sold during its beta, many networks had build their business model, their pitch to cities and communities and businesses, and their financing on $50 and $100 nodes. The Pro version ups the ante while taking away some of what these network builders need, according to the forums. (A Carrier class version, with no pricing disclosed, allows a tie-in with existing user authentication system, and allows more of a private-label version.)
So-called Legacy networks, ones that were built before this last week, can continue to run as they do or be upgraded to Pro status at no extra cost. But once upgraded, all the Pro limitations are in effect. Any new nodes added to a Legacy network must be Pro nodes, too; there's no option to add Standard nodes. This is part of what's causing ire on the Meraki forums. (One of these networks, Kokua Wireless, was praised in an editorial in today's Honolulu Star Tribune; someone from the network noted on Meraki's forums, "It'll be hard to build a business even @ the Pro level knowing Meraki can make such drastic changes." One network operator has already flashed his Merakis with alternate firmware.) Update: Meraki says it's been talking to all the operators and groups that have problems with their new model; I'll have more details Monday.
In this formal release, Meraki now displays advertising on every page using what they variously call Community Messaging, Community Messaging & Advertising Platform, and Messaging Platform. It's often euphemistic. In effect, Google ads--Google is a Meraki investor--will appear on every page in a special toolbar that requires no installation. Which means that it's inserted using some technique--probably frames--that might cause other problems, too. Network operators can insert localized messages, but to a limited extent. There's no option for Standard and Pro users to disable advertising or the messaging bar. There's no disclosure on what revenue, if any, Meraki splits with the network operator. If Meraki handles billing for Pro users, they keep 20 percent of gross revenue.
I had to check the Web site after being alerted to this change, assuming that senior management--largely a bunch of MIT grad students who turned RoofNet into this clever commercial offering--had been fired or shuffled, and a new carrier-oriented CEO was hired. As far as the site shows, it's the same gang. Which surprises me, given how open the group was about communicating, and how interested in community building. This is a huge stumble, when the community tells me that they were unaware of the changes to come until the Web site started to have new information on it.
At $150 and $200 for managed nodes, Meraki has now lost some of its edge against companies like Tropos Networks, the most likely comparison. While Tropos, Cisco, BelAir, Motorola, Strix, and SkyPilot typically charge $2,000 to $5,000 for their nodes, with the more expensive ones including 5 GHz backhaul radios, those prices are heavily discounted, several sources have told me recently. Tropos nodes can cost EarthLink, its biggest customer, under $1,000, I have it from multiple parties outside the service provider.
While $1,000 is clearly five times $200 for a similar outdoor piece of gear, that belies several factors. Tropos is using enormously high-powered radios, capable of producing up to the maximum legal signal strength in 2.4 GHz. Tropos has a sophisticated back-end that allows integration with many popular management and authentication systems. Using Tropos or other vendors' network gear is substantially less trivial than building one from Meraki pieces, but with enormously larger coverage areas relative to cost now, Meraki has moved itself towards that equipment range without bringing the robustness needed.
The system and hardware has gotten rave reviews for the simplicity in building a network in bits and pieces. But the good will may have just flown out the window. I have just sent a query off to Meraki's PR firm, but it being Sunday morning, I don't expect to update this post until Monday.