Startups Challenge Cisco By Chipping Away At WLAN Market - InformationWeek

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3/2/2007
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Startups Challenge Cisco By Chipping Away At WLAN Market

Extricom's one of several using new technology to compete in selling wireless LANs to businesses

The wireless local area network equipment market isn't a place you'd expect to see startups with high hopes of snatching business away from Cisco Systems or the other market leaders. But as more companies get serious about installing wireless LANs, this growing market appears to have plenty of opportunities, especially for new ideas.

Businesses initially deployed WLANs for occasional use -- say, to give workers network access in conference rooms and to let guests and other transients have Internet access on company premises. More recently, they've become networks of choice for some businesses, often covering large areas and connecting branch offices. Sixty-three percent of U.S. companies use in-house WLANs to provide access to applications, according to a Forrester Research survey a year ago. They face the challenge of finding the right equipment vendor with a system that can handle the load, as well as offer strong security and reliability. Cisco holds 66% of the market, Gartner says, but it's a market growing fast enough to leave opportunity for startups.

One, Extricom, focuses on enabling multiple services over WLANs, including voice, data, location-based services, and video. Extricom rolled out its WLAN system two years ago, claiming to have an architecture in which every access point uses all the available Wi-Fi radio channels to create a continuous blanket of coverage. These multiradio access points increase capacity and eliminate interference, VP of marketing David Confalonieri says.

Conventional WLAN systems require extensive site surveys and cell planning so that access points can be carefully placed to meet radio frequency requirements. Another component of Extricom's system is "ultrathin" access points that contain no software or other intelligence, designed to make it easier to centrally manage them from a wireless switch.

SUCCESS STRATEGY

The WLAN startups are making relatively small market share inroads, though gaining some big-name customers and niche acceptance. None of them is brand new: Extricom was founded in 2002, the same year as Aruba Networks, Meru Networks, and Trapeze Networks. Aruba now has 7% of the WLAN equipment market, Meru 1.6%, and Trapeze 1.5%, according to Gartner. Extricom's share is even smaller.

Wireless LAN Equipment Vendor Market ShareAruba has snagged significant customers, including Microsoft, from Cisco with its centrally managed WLAN network security and policies. Aruba last week launched several initiatives, partnerships, and new capabilities to help IT managers in health care implement applications, such as patient monitoring and workflow management, on a single wireless network.

Trapeze also is trying to differentiate itself with equipment designed for services in high demand, such as location and asset tracking. Trapeze last week started shipping its LA-200 Location Appliance, a device that can be plugged into Trapeze's WLAN system to provide instant location information of all Wi-Fi-enabled devices on the network.

Similar location information is provided by Cisco and Hewlett-Packard's joint pervasive WLAN effort--wireless networks that encompass buildings as opposed to separate departments or conference rooms within a building. Pervasive WLANs can be used to spot a Wi-Fi-enabled device for locating workers inside a building or radio frequency identification tags on assets. Other potential applications and services include security, guest access, and voice over Wi-Fi.

WLANs originally were designed for data-centric applications. Now Cisco and other vendors want to design voice-enabled systems that let people make and receive phone calls over internal networks and avoid cellular charges. "Customers say that no longer is wireless about access and transport, but instead they see it as a platform for mobility services, such as voice," says Maciej Kranz, VP of marketing at Cisco's Wireless Networking business unit.

Some startups also are looking at this broader approach as a way to enter the WLAN market. Aerohive Networks says it's building a new class of enterprise WLAN products that will offer management, security, and mobility, and will eliminate network integration challenges.

It's clear no one vendor has the market figured out. "The whole WLAN space is ripe with innovation," says Craig Mathias, an analyst at Farpoint Group. "It's a good time for new companies to come in." All enterprise-class systems offer much the same functionality, with some architectural differences distinguishing them. But startups still have a fair shot if they can get away from selling access points and switches for basic Internet access.

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