In The WLAN Industry, The Only Constant Is Change

The most recent WLAN industry shakeups feature big names, for sure.  But if you’ve been around a while, you know that what’s happening with the purchases of Aruba Networks by HP and Meru Networks by Fortinet is hardly a new trend in an industry where big M&A deals are commonplace.

Let’s begin with Cisco’s purchase of Aironet back in 1999. It’s a safe bet that Cisco looks back on its $800 million dollar investment with great satisfaction, given how early Cisco Aironet WLAN technology helped launch the foundation of enterprise Wi-Fi. The early WLAN market also featured Symbol and Enterasys, both of which were eventually bought by Motorola and Extreme, respectively.

Fast forward a bit to the WLAN controller era, and the market was pretty much defined by Airespace (bought by Cisco in 2005), and newcomers Aruba Networks, Meru, and Trapeze. I remember looking at Meru even before it really had an NMS, and recall how Aruba differentiated itself early on with an emphasis on security and really complicated licensing.  Trapeze would end up acquired by Juniper in 2010 for $152 million.

As Aruba clawed its way to No. 2 in the market, it made great acquisitions along the way, including NMS vendor AirWave, wireless guest service vendor Amigopod, and location services hotshot Meridian. Though Ruckus Wireless was founded earlier, it didn’t really become competitive until 802.11n was hot.

Around 2006-2007, cloud-based wireless made its way into the market when Meraki and Aerohive Networks arrived on the scene.  Cloud WLAN was an interesting model that would be ultimately validated by Cisco’s acquisition of Meraki in 2012 for over a billion dollars. Aerohive would go on to form partnerships with Euclid Analytics, Barracuda Networks, Apple, and most recently, Dell.

Long-time wireless intrusion prevention player AirTight Networks made the leap to cloud-managed WLAN access a few years ago, and even the SOHO space saw the rise of cloud WLAN with OpenMesh and PowerCloud/Skydog (bought by Comcast in 2014). Now, pretty much every major WLAN player has some form of cloud offering.

As the WLAN vendors were buying and selling each other, ancillary parts of the WLAN industry were re-invented as well. Fluke Networks bought toolmaker AirMagnet in 2009, and just this week Avago Tech announced its $37 billion bid for chipmaker Broadcom, which provides the radio magic under the hood for countless WLAN components. Even analysts retooled as wireless became recognized as mission critical.  In 2012, Gartner did away with independent analysis of switching and WLAN industries in favor of its “Magic Quadrant for Wired and Wireless LAN Infrastructure.”  

Coming back to the latest goings on with WLAN vendors, HP last month sealed its acquisition of Aruba for around $3 billion, and Fortinet acquiring Meru last week for around $40 million. Not so long ago, Zebra Technologies picked up Motorola’s Enterprise Business (including WiFi) unit for $3.5 billion.

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Each of these could be transformative, or they could fizzle if handled wrong. HP has a dubious history of not integrating its acquisitions so well, and Aruba’s large market share is being watched by competitors for signs of trouble. Meru will likely rise or fall on what Fortinet can do with its SDN capabilities and how fast it can garner more recognition of SDN value in the wireless space.

So what’s next? Speculation can be a fool’s game, but there are few obvious ponderings to be considered.  Ruckus is doing well, but also has no switches or routers to offer. Cloud WiFi vendor AirTight Networks is in the same boat with no LAN offerings. Xirrus is sometimes considered an oddball with its array-based WLAN the same way Meru has been viewed as “different” with its Single Channel Architecture. And though Aerohive is being resold by Dell in a recent deal, many have speculated that Aerohive would be, and wants to be, purchased.

Life could get interesting for any of these companies in the days to come, if for nothing else because they are smaller players in the enterprise space that haven’t folded or been bought yet. I’d look for at least two of these to undergo purchase or liquidation within a year or two as the market (at this level) continues to contract.

From a technology perspective, the factors that will continue to shape the WLAN industry include location analytics, the rise of SDN, the endless quest to monetize every nook and cranny of public WiFi, and the Internet of Things. Add to these an ever-rising tide that demands wireless connectivity everywhere, and you can see a lot of potential for continued evolution in both solutions and the general make-up of industry players. Don’t blink, as things change quickly in this space.