Cisco Acquisition Broadens Wireless LAN Portfolio - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Infrastructure
News
1/13/2005
03:57 PM
50%
50%

Cisco Acquisition Broadens Wireless LAN Portfolio

Purchase of wireless LAN switch vendor Airespace will let Cisco offer less-costly option to business customers.

Cisco Systems expanded its wireless LAN portfolio late Wednesday when it revealed plans to buy wireless LAN switch vendor Airespace Inc. for $450 million in stock. The deal gives weight to a wireless LAN architecture, advanced by Airespace and other Cisco competitors, that uses switches to centrally control and manage so-called "thin" wireless-access points.

Cisco's market-leading Aironet wireless LAN product line and its structured wireless-aware network architecture are designed for very large networks. They use intelligent, or "fat," wireless-access points that are integrated into a wired network and include a host of features and functions. Wireless LANs that use centralized switches usually are installed as overlay networks and generally aren't as tightly integrated with a company's wired network.

"The switched architecture is best for deployments that range from 10 to 250 access points, which is where most businesses are at today," says Abner Germanow, a research manager at IDC. "The Airespace system is very well-suited to that type of customer."

Businesses worldwide spent around $850 million on wireless LANs last year, and the market is growing at around 65% annually, Germanow says. Cisco owns around 55% of the market, followed by Symbol Technologies (8.3%), 3Com (7%), Proxim (7%), and Airespace (6%), according to IDC.

By buying Airespace, Cisco gains a product line that includes wireless LAN controllers, or switches; access points' wireless LAN management and location software; and security capabilities such as intrusion detection. In the short term, Cisco plans to offer the Airespace product line alongside its other products. Over the long term, company officials say they plan to converge and integrate the two product lines, although they couldn't provide details on what the ultimate product line or architecture would look like.

"This is a very complementary offering to our existing products and lets us offer the broadest wireless product portfolio," says Ann Sun, Cisco's senior manager for wireless and mobility. Cisco's current product line is good for businesses that want to deploy thousands of access points and serve thousands of users, while Airespace's overlay network architecture is well-suited for companies that want to start with smaller deployments, she says.

An Airespace wireless LAN system can cost substantially less than a Cisco system, depending on the configuration and number of access points, says Aaron Vance, a senior analyst at the Synergy Research Group. "Cisco had been evangelizing against centralization for wireless LAN architectures, which was holding up the market a little bit," Vance says. "This acquisition validates that architecture and will be a really good thing for the wireless LAN market overall."

Vance describes the battle between thin access points and fat access points as a "religious war." Cisco's approach provides more capabilities in an access point, but those access points are more difficult and costly to deploy and manage. However, Airespace's thin access points, which are basically just radios, result in the "complete dumbing down of the edge of the network," Vance says. "Eventually we will find some sort of a middle ground, where there's some intelligence at the edge and some intelligence in the core of the network."

Cisco had been moving to beef up its ability to manage wireless LANs centrally. Last year it introduced a blade for its Catalyst switch to provide some wireless capabilities. Also, Cisco talked to wireless LAN switch vendor Aruba Wireless Networks Inc. last year about a possible acquisition, but the two companies couldn't agree on terms.

Rival wireless LAN switch vendors were quick to applaud the deal. "It's great news that such a large player has validated the market," says Anthony Bartolo, VP and general manager of the wireless infrastructure division at Symbol, which also offers both conventional wireless LAN technology and wireless LAN switching technology. Symbol has 40,000 wireless LAN switch deployments, and the technology has grown from 2% to 11% of the company's revenue in the past year, he says. "It's clearly the wave of the future, and it looks like the industry is going to consolidate down to just a couple of major players," he says.

The deal poses problems for other technology vendors, analyst Vance says. "It helps to cripple Nortel [Networks], Alcatel, and to some extent NEC, which were selling Airespace's product line," he says. "They may have to form new partnerships with [rival wireless LAN switch vendors] Aruba or Trapeze."

Cisco plans to support Airespace's customers, Sun says, and is "open to discussions with Airespace's partners about future opportunities."

Cisco has a long history of buying technology companies to enter new markets or broaden its product portfolio. It gained a leadership position in the wireless LAN market after it bought Aironet Wireless Communications in 1999 and made a number of acquisitions of wireless companies in the subsequent years. The $450 million acquisition of Airespace is the largest deal Cisco has done since it bought Linksys Group, which makes home networking gear, for $500 million in 2003. Cisco acquired 12 technology companies last year.

Cisco expects the Airespace deal to close by the end of April. Once the transaction is completed, Airespace, which was founded in 2001 and has 175 employees, will become part of Cisco's data center, switching, and wireless technology group.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Commentary
Get Your Enterprise Ready for 5G
Mary E. Shacklett, Mary E. Shacklett,  1/14/2020
Commentary
Modern App Dev: An Enterprise Guide
Cathleen Gagne, Managing Editor, InformationWeek,  1/5/2020
Slideshows
9 Ways to Improve IT and Operational Efficiencies in 2020
Cynthia Harvey, Freelance Journalist, InformationWeek,  1/2/2020
White Papers
Register for InformationWeek Newsletters
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Video
Current Issue
The Cloud Gets Ready for the 20's
This IT Trend Report explores how cloud computing is being shaped for the next phase in its maturation. It will help enterprise IT decision makers and business leaders understand some of the key trends reflected emerging cloud concepts and technologies, and in enterprise cloud usage patterns. Get it today!
Slideshows
Flash Poll