A sagging economy could mean further wireless LAN consolidation, particularly as networking companies Juniper Networks Inc. and Foundry Networks Inc. look to bolster their WLAN stories.
The Financial Times recently reported that Juniper is interested in acquiring Aruba Networks Inc. or Meru Networks Inc. Sunnyvale, Calif.-based Aruba, a publicly traded company, could come at a bargain since it has seen its stock fall from a high of $23.78 in July 2007 to less than $5.00 this week.
Mathias said that while networking vendors have survived on just wireless or wireline product portfolios, more and more enterprises are looking at wireless as the primary means of connection, meaning a strong wireless story will be a must to win sales going forward.
"Enterprises are looking at their next evolution, and wireless is going to be the next access point," Mathias said. "Wireless becomes the default access over the next 10 years."
Wireline networking vendors have been buying up wireless LAN vendors this year in order to capitalize on this trend. HP ProCurve acquired Colubris in August, and Belden Inc. acquired Trapeze in June.
"The keys to success are an integrated sell, so that you don't have to deal with two different salespeople, and then integrated management," he said. "But that doesn't say you need to own all the pieces."
Santa Clara, Calif.-based Foundry recently partnered with Aruba, for example, to sell into the federal market, capitalizing on the latter's first-to-market common criteria certification.
"I would be surprised if, short on the heels of an agreement, you'd see an acquisition announcement," Silva said. "It's just a co-selling agreement."
Aruba itself was low-key on the prospect of being acquired.
"Aruba has assembled a world-class team focused on [converged wireless solutions], and we believe our work will be best accomplished as an independent company," said Mike Tennefoss, head of strategic marketing at Aruba, in a statement.
But even if Sunnyvale, Calif.-based Juniper is interested in acquiring a wireless LAN vendor, there might be more affordable ways for the company to jump into the Wi-Fi world.
"[Aruba], publicly traded and still letting the ink dry on its government go-to-market partnership with Foundry, still seems a formidable pill for any other networking powerhouse -- Juniper being everyone's favorite contender -- to swallow," blogged Chris Silva, a Forrester Research Inc. analyst, regarding Juniper acquisition rumors "Aruba did very well with their IPO," Silva said.
There has been buzz about rival wireless LAN vendor Meru possibly launching its own IPO, he said. However the market's volatility has quieted such talk. A merger or acquisition might be a safer bet.
"I look at Meru as the most likely target, not from a performance standpoint, but from a cost perspective," Silva said.
Rachna Ahlawat, vice president of strategic marketing at Sunnyvale, Calif.-based Meru, said the company was open to all possibilities.
"We are open to all different options as the company goes forward," she said. "The company wasn't formed for one strategy in mind."
And if no suitors are the right fit today, that's fine, too.
"There is enough going on and enough customers who believe in us and invest in us to keep us busy," she said.
She added that enough companies still have separate wireless and wired LAN upgrade cycles to mean there are plenty of opportunities to sell solo, or engage in partnerships like ongoing co-marketing agreements with Avaya and Juniper.
While Meru has embraced the channel-blanket wireless concept, where all access points are running on the same wireless channel with a smart controller dictating handoffs, its somewhat unique architecture has proved popular with a certain segment of customers, particularly in the education market.
Silva said Meru has one of the largest, most reputable customer lists of the privately owned WLAN providers.
It also would not be Juniper and Meru's first engagement: In 2005, they entered into a joint marketing agreement centered around wireless voice.
Aside from Juniper, Foundry is another likely shopper in the wireless LAN market, Mathias said. However, Foundry itself was recently purchased by storage networking vendor Brocade Communications Systems Inc. He said he had no personal knowledge of Foundry actively negotiating an acquisition. Nortel Networks Corp. and Alcatel-Lucent also would benefit from an acquisition, he said, but both companies might have other financial priorities right now.
Even if there are no major deals forthcoming -- talk has circled Juniper and Aruba for years without result -- Mathias said he expected at least strong partnerships to form.