HP ProCurve's acquisition of Colubris signals a rising wave of consolidation in the wireless LAN market as industry players strive to create a unified offering of wired and wireless networks.
"We may very well be at the start of a consolidation," said Craig Mathias, principal of Farpoint Group. He said ProCurve bolstered its ability to offer enterprises a unified offering of wired and wireless technologies by grabbing Colubris.
"It's important because wireless depends on wired [networks] to such a great degree. Install any wireless LAN system and you'll discover you need wired switches," Mathias said. "And having all that under a single umbrella – from access points to switches to routers… to especially unified management software – that's going to define the top tier [of the market]."
Mathias said this drive to offer unified product portfolios fueled Belden's $130 million purchase of WLAN vendor Trapeze Networks in June. Belden, a manufacturer of copper and fiber cabling, now has a solid wireless vendor with an established customer base to build a unified networking strategy around, he said.
HP ProCurve has its own line of WLAN technology, but it hasn't yet launched a line of products compatible with 802.11n, the soon-to-be-ratified standard for high-performance wireless networks. Colubris gives ProCurve that strong offering in 802.11n, Mathias said.
ProCurve's acquisition of Colubris was motivated partly by the company's desire to offer a unified wired and wireless portfolio, according to Mark Thompson, ProCurve's global director of sales and marketing. Colubris' 802.11n products will accelerate its efforts to offer such a portfolio. "By having [Colubris] be a part of ProCurve, we can accelerate to those capabilities quicker than our internal team could," Thompson said.
Customers and end users will soon be demanding a unified network experience to simplify management and improve productivity, he said. When WLAN was a new technology, enterprises were content to treat it as an overlay on top of the wired network. Now that WLAN is becoming a mainstream part of enterprise infrastructure, he said, companies want it fully integrated with their wired networks.
"From a customer perspective, the ability to manage the wired and wireless infrastructure as a single entity -- setting security policy, understanding how applications behave on networks -- should work exactly the same from wired to wireless networks," Thompson said. "You should not have to deal with them separately. From the end-user perspective, you should not have to think about how a network works differently from wired to wireless."
ProCurve's objective is to be one of the primary choices for customers looking for a strong wired and wireless LAN infrastructure, he said.
More consolidation is sure to follow as other companies try to establish their own unified strategies, Mathias said. The market should eventually contain three to four top-tier players that offer a wired and wireless portfolio, he explained.
"At the top right now, you have Aruba, which doesn't have a unified play," he said. "You've got Cisco. They have a strong unified play. And you've got a lot of other companies vying for the one or two other slots up there. I would say Belden-Trapeze has a shot. Siemens-Enterasys has a shot. And I would say that HP-Colubris has a shot at that. These mergers are designed to get these companies in that top tier."
Mathias said developing a unified strategy will be a challenge for Aruba, the No. 2 player in the WLAN space. At this point, Aruba has no wired networking story. It might have to find a partner or make an acquisition of its own. However, Aruba's purchase earlier this year of AirWave Wireless, a wireless network management vendor, bolstered its position.
"The thing that becomes the differentiator eventually is management software," he said. "[Aruba] has a good position there because they own AirWave. If AirWave could extend their management software to provide unified management of [wired and wireless] hardware, even if it's not hardware that Aruba sells, that could be a big plus."
Mathias said that at this stage in the wireless LAN market there should be far fewer players than there are today. There are more than a dozen companies vying for the market. He said this market glut is reflective of the size of the potential market.
"This is such a huge opportunity," he said. "This is just like switches and routers. It's that big. Everybody needs [a wireless LAN]. Plus you've got the residential market. Plus you've got the public access market. Plus this is a global opportunity. There is no corner of the earth where wireless LANs are not appropriate. And we're still only in the early stages of deployment with respect to enterprise deployments."
If consolidation in the WLAN market does pick up steam, enterprises need not be worried about the ultimate fate of their WLAN vendor. Mathias said it is rare for a vendor to acquire a rival and then kill a product line. Even if that does happen, that discontinued hardware will still work. And most vendors continue to support obsolete equipment for years.
"Technology becomes obsolete no matter what," he said. "You will be replacing it at some point no matter what, so the risk is fairly low."
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