Surging Aruba Still Swamped By WLAN Supremo Cisco - InformationWeek

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Surging Aruba Still Swamped By WLAN Supremo Cisco

But the company continues to get customer wins, including outfitting the 80-odd offices of single-market realty company Prudential Fox & Roach with wireless LANs.

Since going public last March, wireless LAN provider Aruba has almost doubled its market share, placing it in position to compete directly against the 800-pound gorilla in the enterprise networking space, Cisco Systems.

Cisco, however, is also gaining market share -- indicating that enterprise wireless networking is becoming a two-horse race.

This week, Aruba said it has won the latest in a series of major customer deployments: providing wireless LANs for the 80-odd offices of Prudential Fox & Roach, the nation's largest single-market real estate company and the third largest overall.

"We baselined against Cisco and Aruba," said Bill Friemann, Prudential Fox & Roach's VP of technology operations, "and Aruba won."

Aruba has been hearing that verdict more often in the last year, landing big accounts like the U.S. Air Force (which is replacing Cisco WLAN gear with Aruba systems at 104 bases worldwide); Ohio State University (which will install an Aruba system in more than 400 buildings covering about 1,700 acres in what Aruba claims is the largest WLAN in the world); and even Microsoft (which will replace its 6-year-old Cisco network with Aruba gear in 250 buildings on its main campus in Redmond, Wash., plus offices in more than 60 countries). Much of this success has been enabled by the IPO, said Aruba founder Keerti Melkote.

"The first question that we used to face as a private company was around our balance sheet and our financials -- essentially our viability," said Melkote. "Once we went public that all disappears, and our ability to sell has gotten far greater."

In May Aruba reported that its revenue had climbed to $34.7 million, up 30% quarter to quarter and 65% from the same period a year ago. What's more, said Melkote, it was the company's first break-even quarter since its founding in 2002. The company's share price was up 48% since its March 27 IPO before the broad market tumble of the last week.

Last month, Aruba became the first major WLAN provider to certify Apple's new iPhone for enterprise wireless networks.

None of that, however, has added up to a real run at Cisco, which has dominated the wireless LAN market since its inception. According to research firm Dell'Oro Group, Cisco's market share in enterprise WLANs for the first quarter of this year was 64% -- four points higher than one year before. (Over the same, period Aruba nearly doubled its market share, from 5%, including its OEM relationship with Alcatel-Lucent, to 9%.) Cisco's enterprise WLAN revenue for its most recent quarter was around $235 million, according to analysts -- almost seven times those of Aruba.

"There's a class of customers that never look at anything outside Cisco," acknowledges Melkote. "That gives them a 40% to 50% share naturally, leaving 50% to 60% of the business where they fight it out with the rest of us."

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