Aerohive's IPO puts spotlight on Wi-Fi as a service

Aerohive Networks, which markets managed Wi-Fi service to enterprises, attracted $75 million for its initial public offering last Friday. Eight-year-old Aerohive sold 7.5 million shares for $10 apiece, which put the company's total valuation at $436 million.

Aerohive competes against the likes of Aruba Networks and Cisco Systems in the enterprise wireless LAN space. However, it does not offer a hardware Wi-Fi controller to manage network nodes and instead oversees the network from the cloud.

In a recent blog post, Abby Strong, senior product marketing manager, explained that Aerohive distributes both the control and data planes with a set of protocols called cooperative control. "When a group of Aerohive devices communicate with one another, they form what is known as a Hive, and create a shared control plane. No one device is masquerading as a controller. There is no controller hidden in the cloud," she said.

However, Aerohive also offers centralized management via its HiveManager network management system (NMS), which Strong said "is in no way a controller" because all control plane functionality resides in HiveOS devices themselves.

Aerohive counted 13,100 customers as of the end of 2013, but lost $33.2 million for the year. The company expects to grow its business by attracting a greater percentage of revenues from selling software-as-a-service applications for mobile devices and other uses, CEO David Flynn told the San Jose Mercury News.

Aerohive has raised some $100 million in venture capital since its 2006 founding. Its venture capital investors include Northern Light Venture Capital, Lightspeed Venture Partners, New Enterprise Associates, KPCB and DAG Ventures.

The broad concept of offering Wi-Fi as a service (WaaS) is catching on. Last month, Selina Lo, CEO of Ruckus Wireless, touted the benefits of using the cloud and managed Wi-Fi service. Speaking during the Wireless Broadband Alliance's Carrier Wi-Fi Summit in Barcelona, Spain, Lo said one way mobile operators might build up an inventory of indoor locations for placement of public Wi-Fi access points and small cells would be to offer WaaS to the venue owners.

This week at the Interop Expo in Las Vegas, Ruckus is demonstrating another cloud-based offering, its SPoT smart positioning location-based service (LBS). SPoT leverages the technology of YFind Technologies, which Ruckus acquired last summer for an undisclosed price.

For more:
- see this Aerohive release and blog post
- see this GigaOM article
- see this San Jose Mercury News article
- see this Ruckus release

Related articles:
Ruckus CEO touts 'Wi-Fi as a service' to make headway in land grab for sites
Wi-Fi deployments drive Ruckus to 17.5% jump in revenue
Micro-location is an attractive but fast-moving target

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