Aruba Flirting With IPO?

Enterprise WLAN provider Aruba Networks Inc. (Nasdaq: ARUN) is preparing its S-1 registration document for the Securities and Exchange Commission (SEC) , according to industry sources, suggesting that it could make an initial public offering of stock in the first half of next year.

The company is working on the first official step towards an IPO now, says one industry source who spoke on condition of anonymity.

The S-1 registration document is a snapshot of the state of a company, required before it can file for an IPO. The first big stage in the IPO process, it signals that Aruba's public offering could come within months.

The Sunnyvale, Calif.-based company has never made any secret of its desire to go public. (See Aruba Plots Imminent IPO.) Aruba, however, declines to talk specifics. "The company cannot comment on such matters," says Keerti Melkote, head of products and partnerships at Aruba.

As a private company, Aruba doesn't officially release revenue figures. The latest wireless LAN market report from Synergy Research Group Inc. , however, gives some indication of the company's sales. The firm is the third-ranked vendor in the enterprise wireless LAN market after Cisco Systems Inc. (Nasdaq: CSCO) and Symbol Technologies Inc. (NYSE: SBL).

Aruba's sales grew sequentially 17 percent in the the third quarter of 2006 from $23 million to $27 million, according to Synergy, and the vendor has consistently shown revenue growth over recent quarters. (See Enterprise WLAN Market Up 19%, WiFi Q2 Shakedown, and Cisco's WLAN Stranglehold.)

Some in the industry still see a tough road for Aruba -- or any startup planning to go public -- given concerns over the requirements of Sarbanes-Oxley compliance and the general weakness of the IPO market.

— Dan Jones, Site Editor, Unstrung