Aruba prepares for IPO

Former Federal Reserve Chairman Alan Greenspan described the mid-1990s dot.com period as an era of "irrational exuberance." There is something exuberant--but certainly nothing irrational--about Aruba Networks' near-term plans. The leading independent maker of corporate WLAN gear has reshuffled top management roles in preparation for a potential IPO. The Sunnyvale, CA-based company said president and CEO Don LeBeau would take over as chairman of the company and be replaced by Dominic Orr, an original Aruba investor and its current chairman, who becomes CEO and president. "We want to keep a strong continuity going through the IPO," Orr said in an interview. "I feel quite rested and ready to go take another company through the IPO process."

Aruba is the biggest rival of Cisco Systems in the market for enterprise WLAN equipment. Cisco acquired Airespace last year for $450 million and currently has 25 percent of the enterprise wireless market, according to the Dell'Oro research group. Privately held Aruba is Cisco's major rival, with nearly a 20 percent share. Dell'Oro estimates that the market for centralized WLANs will be worth $4.7 billion by 2009. Aruba does not disclose its finances, but analysts say the company is fast growing and has a wide base of blue-chip corporate customers. "We recently turned in our first profitable quarter," Keerti Melkote, Aruba's founder and now its vice president of marketing, said of the second fiscal quarter, which ended in January.

Orr declined to give a time frame for a potential IPO, but he would not rule out filing to go public later this year. A public stock offering will give Aruba the resources to "pull away from the pack" and to become a "counterweight to Cisco," he said. Orr compared the company's strategy to Cisco's fixed-line network rival, Juniper Networks. "The keywords for me are predictability and visibility," Orr said. "Now that we have achieved profitability I want to make sure that we have predictable profitability and sustainability," he said, adding that Aruba will be ready for an IPO when the company can see ahead to four solid quarters of profitability.

Last year, Aruba signed a deal to build the largest corporate wireless network in the world for Microsoft. The deal involves replacing 6,000 network APs using older Cisco equipment with Aruba's latest gear. Aruba also counts eBay, Yahoo and Google as customers. Aruba has 250 employees.

For more on Aruba's IPO strategy:
- see this press release
- this San Jose Business Journal report

PLUS: CTIA and the Wi-Fi Alliance have agreed jointly to develop certification programs for converged WiFi/cellular phones. The industry groups will work together on the development of test programs for overlapping aspects of converged handsets. The partnership will initially focus on Radio Frequency performance mapping in a mixed network environment and later explore other issues associated with standard convergence. Market research firm ABI Research has predicted that the annual market for WiFi/cellular handsets will increase to 100 million units by 2009. Article

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