While some of Aruba Networks' competitors are circling like vultures on a dead carcass, the company says it's very much alive and well, thank you very much.
Competitors will say what they will while Aruba prepares to become a larger force with the help of HP's breadth and scale, but you can't blame them--and everyone else, for that matter--for wondering whether Aruba will end in the same situation as Palm.
HP announced in 2010 that it was acquiring Palm, the maker of the Pre and creator of the WebOS software. As The Verge reported in this postmortem, it's easy to look back on Palm and feel a sense of loss and sadness--the company pioneered PDAs and at one point was a force to be reckoned with. The downfall was not immediate. HP made promises of "doubling down" on WebOS. Ultimately, that didn't happen, and HP announced that the Palm OS would be open-sourced.
Here's what former Palm CEO Jon Rubinstein had to say in an interview with FierceWireless Editor Phil Goldstein in 2013: "Talk about a waste. If we had known they were just going to shut it down and never really give it a chance to flourish, what would have been the point of selling the company? …These things are all hindsight."
Let's face it. HP's history of acquiring companies has been less than stellar. Palm is not the only example of a company that was acquired by HP and never lived to see the light of day. Autonomy, Fortify Software and 3Com also come to mind, but HP has a long list of acquisitions. Those are just a handful.
Shane Buckley, CEO of fellow WLAN vendor Xirrus, points out that the majority of acquisitions--by any company, not just HP--are not successful. According to Harvard Business Review, studies show that 70 percent to 90 percent of mergers and acquisitions fail. Buckley has been through his fair share of Silicon Valley acquisitions--on both sides of the deals--and he's empathetic with anyone going through the same.
"It can be very, very challenging," he told FierceWirelessTech. "As anyone who's been through this process knows, you really have to be very sensitive to the human-capital side." The acquiring company needs to be "supercareful" to abide by the parameters by which the acquired company agreed, and it can be difficult when the lawyers are in one room making the arrangements and the executives and managers are left to execute in the real world after the ink has dried.
Rivals such as Buckley also point out that Aruba's Domnic Orr is a great CEO but is not going to be CEO once the deal is done. Orr and Chief Technology and Strategy Officer Keerti Melkote will lead the newly combined company, but they will report to Antonio Neri, who leads the HP Enterprise Group.
How will Aruba's leaders continue the pace of innovation in this new structure? Aruba Networks earned its reputation for delivering best-in-breed enterprise WLAN solutions. A lot of people want to see it continue to succeed--even, to some extent, its own rivals.
"I think the culture we have in this company is one of the things that made us very attractive to HP," said Greg Murphy, VP of business operations at Aruba, in an interview with FierceWirelessTech. "We understand how competitive the market is out there," which is why the company adheres to a customer-driven culture and wants to be part of an organization that encourages a multivendor approach, something that threatens to disrupt the status quo.
In 2013, Aruba acquired Meridian, a startup in my hometown of Portland, Ore., that uses Wi-Fi triangulation to determine location indoors. With an app such as one used by the San Francisco 49ers at Levi's Stadium, fans can watch instant replays and even order food from their smartphones. For the past few months, Aruba has been hiring more people in Portland as part of its mission to use its newly acquired riverfront real estate to serve as a showcase for companies that want to go completely wireless. It's a great combination--indoor location services combined with Aruba's Wi-Fi access points.
So, when all is said and done, will Aruba go the way of Palm, never to be heard from again? There's reason for optimism. Palm was coming at it from a position of weakness in the market. It was losing share and looked to HP for a bit of a salvation. Aruba is already No. 2 in its market and brings with it strong market leadership. Plus, you could argue that networking is far more up HP's alley than smartphones ever were.
If HP can follow Aruba's example and not screw up this acquistion, it's possible that the tide can turn and Aruba will excel where others have not.--Monica