Wireless network equipment supplier Meru Networks has decided to wade into chilly waters and take the firm public. In order to improve its long term viability, the vendor opted to sell 4.4 million shares at a price of $15.
Wireless network equipment supplier Meru Networks has decided to wade into chilly waters and take the firm public. In order to improve its long term viability, the vendor opted to sell 4.4 million shares at a price of $15.IPOs dried up once the economic downturn hit. Meru decided to buck that trend. The vendor, which was founded in 2002, had done a good job carving out a viable niche in the wireless LAN marketplace. Deploying and then managing wireless LANs has been difficult for businesses because they can run into various interference issues. Meru tried to alleviate that problem by pooling wireless LAN access points into a single Virtual Cell that can span a whole office or campus.
There has been interest in its approach. The company announced that its revenue reached $69.5 million in 2009, up 27 percent from $54.7 million a year earlier. While many other IT sectors experienced dramatic downturns, wireless LANs did well in 2009, with many vendors realizing growth from 20% to 40%.
Meru still faces significant challenges as the wireless LAN market continues to evolve. The company has been generating more revenue but is not close to turning a profit. In 2009, the start up lost $17.4 million. Theoretically, money raised from the IPO could be used to expand its sales and marketing efforts, boost revenue, and close that gap.
Yet, the question remains: Is Meru large enough to be a viable competitor in the wireless space moving forward? Consolidation has been the industry watchword as interest has grown in multi-purpose network systems. Increasingly, businesses are looking to consolidate management of their wired and wireless networks. In addition, interest is growing in integrated devices that combine server, storage, and network functions. Meru lacks the pieces and the mass needed to deliver such systems. The IPO illustrates that company has had successfully navigated one growth phase but other hurdles remain as it moves forward.
InformationWeek Elite 100Our data shows these innovators using digital technology in two key areas: providing better products and cutting costs. Almost half of them expect to introduce a new IT-led product this year, and 46% are using technology to make business processes more efficient.
The UC Infrastructure TrapWorries about subpar networks tanking unified communications programs could be valid: Thirty-one percent of respondents have rolled capabilities out to less than 10% of users vs. 21% delivering UC to 76% or more. Is low uptake a result of strained infrastructures delivering poor performance?
Join us for a roundup of the top stories on InformationWeek.com for the week of December 14, 2014. Be here for the show and for the incredible Friday Afternoon Conversation that runs beside the program.