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OCTOBER 13, 2004
By Peter Burrows Can Ruckus Become a Campus Craze? This well-connected startup aims to provide college students with a vast online portfolio of songs and movies -- legally Soon after advising an economics undergrad named Scott G. McNealy on his thesis, former Harvard University professor William J. Raduchel got a call from him to come join his nascent computer maker, Sun Microsystems (SUNW ). For 11 years, Raduchel made his fortune as one of McNealy's closest advisers, helping set Sun's strategy for selling sophisticated back-office servers to giant corporations. In 1999, he made the jump to a mainstream consumer market, becoming chief technology officer of America Online (TWX ). Now, he's ready to go after a less "mature" market -- college kids. The week of Oct. 11, Raduchel is coming out of stealth mode with a startup called Ruckus Networks. It's a service that colleges can buy that gives students access to a portfolio of hundreds of thousands of songs and 50-plus movies, all via the PCs that are now as common as pencils on U.S. campuses. "We want to be the place kids want to be when they don't have to be anywhere," says Raduchel. FRAGMENTED PATH. Sounds awfully low-brow for a tech visionary. But Raduchel says if all goes well, Ruckus could serve a more productive future over the long haul. "We're trying to understand their needs and help colleges build a sense of community." You can bet Raduchel thinks money can be made, too. For now, though, he's focused on the technology. Today, students choose their digital path through an incredibly fragmented world, often going to file-sharing sites to get unauthorized access to copyrighted flicks and music, not to mention trying to avoid viruses and other nasty problems. But if Raduchel has his way, kids at colleges that sign on with Ruckus will satisfy their needs legally via the Ruckus "channel." Schools could use the service to share information or create an online dialogue with students -- whether it's distributing lectures and homework or simply eliciting comments on a film or campus speaker. "In the end, student opinion will drive where this goes, a lot more than my opinion will," says Raduchel. SPEEDY DELIVERY. So far, Ruckus has only four customers, including Northern Illinois, Alfred State, and Bentley College near Boston. Most see the Ruckus service as a perk that will help them compete for candidates. "Some schools just want to make themselves more attractive," says Raduchel. "But it's typically a six- to nine-month sales cycle. That's longer than I'm used to." Why might Ruckus have a chance? For starters, there's limited competition from services that offer both music and movies, such as CDigix in Englewood, Colo. And since its service resides on servers located within the schools' network, the content can be delivered over thick pipes for lightning-fast delivery, typically between 10 and 100 megabits per second, vs. 3 or less for many consumer broadband accounts. Furthermore, the PC is by far the most important platform. Says Raduchel: "[College] kids watch TV six hours or less a week. But they spend that much time every day in front of their PCs," whether it's studying, listening to music, or [instant-messaging] each other. Because these are the consumers of the future, "we're pioneers in figuring out what broadband is going to be five years down the road," he adds. FRESH PLAYLISTS. Raduchel is starting out small. The 50-person outfit has raised only $8.5 million. He declines to comment on the financial formula for success, except to say that schools could pay anywhere from $10 to $100 per student, depending on the account. The contract can vary -- students could get the service for free, or for some amount well below the current standard of $10 per month for music subscriptions or $4 to $5 per pay-per-view movie. That's far more affordable, for example, than paying $1 for each of the 1,200 songs the average collegian's laptop has. Ruckus hopes to position itself at the forefront of the broadband future. Rather than having some slick automation technology keep Ruckus up to date, a dozen or so of those 50 staffers spend their days adding new songs, music videos, or movies to the service. Ruckus is updated four times a day to provide playlists to appeal to kids at that time -- say, a string of party tunes for Thursday night to get the weekend going or more mellow collections for Sunday evening study sessions. "It's an interesting concept," says Garner I2 analyst Mike McGuire. "And it's a way for schools to say: See, we're offering our students a legal option" to file-sharing. PORTABLE-DEVICE EDGE? Still, Ruckus already faces competition. More established players are targeting the college crowd. Napster has signed deals whereby schools such as Penn State offer its music-subscription service to students for a few bucks a month. And Apple Computer (AAPL ) has an iTunes on Campus program so schools can give students discounted access to Apple's 99-cents-a-song iTunes Music Store. As a result, all students at Duke University, for example, get automatic access to iTunes. And the services from Napster and Apple work with portable devices -- for example, Apple's iPod digital music player works with its iTunes music store. For now, Ruckus will work only on students' PCs. Raduchel's goal: "We hope to have a million students [on our service] in 18 months," That's a long way off. But if it's successful, Ruckus would live up to its name -- not only with students, but in the tech industry overall.  Burrows is Computer editor in BusinessWeek's Silicon Valley bureau Edited by Beth Belton
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