The Switch Fix Is In

Whatever else you can say about Cisco Systems Inc.'s (Nasdaq: CSCO) $450 million acquisition of Airespace Inc., the move represents a major endorsement of the concept of centrally managed wireless LAN networks from the big dog of the enterprise market.

Cisco resisted the central concept of the wireless LAN switch crowd – that an intelligent switch manages a network of dumb access points – for as long as it could. Many experts suggested Cisco did so because it was leery about cutting into the margins of its top-selling standalone access points by moving to a new architecture.

But the firm started making concessions to the centralized concept last year, with updated management software for its APs and a wireless makeover for its Catalyst 6500, and has clearly been eyeing an acquisition in the switch space for some time (see Is Cisco Seeking Security?).

So what does Cisco's move mean for the enterprise wireless LAN market in 2005?

The startups in the market, like Aruba Wireless Networks, Meru Networks Inc., and Trapeze Networks Inc., probably will probably see some short-term gains from the acquisition.

Despite Airespace's comforting words to the contrary, its cuckolded partners – Alcatel SA (NYSE: ALA; Paris: CGEP:PA), NEC Corp. (Nasdaq: NIPNY; Tokyo: 6701), and Nortel Networks Ltd. (NYSE/Toronto: NT) – are likely to be looking for sloppy seconds pretty damn soon.

Aruba, as the former second-largest switch startup in the market, looks like the obvious candidate in the partner parade. But some may prefer Trapeze, which has been lagging Aruba in the market but often gets props for how easy its system is to use.

Whatever happens on the partner front, the switch startups are also going to need to specialize to survive. When the two biggest enterprise wireless LAN providers on the market – Cisco and Symbol Technologies Inc. (NYSE: SBL) – can each provide a fairly comprehensive portfolio of centralized wireless LAN products and standalone access points, it's time to get the hell out of the wireless LAN systems market and focus on what you do that the big boys can't.

Aruba has clearly already got this particular memo, hence its recent focus on security for both wired and wireless networks (see Aruba Targets Wired World). And Meru has always pushed itself as a voice-over-wireless LAN player.

Trapeze is the only one of these three little wireless piggies that may be building its house out of twigs and straw. Trapeze, which was one of the first companies to talk up the centralized system concept, needs to find itself a few new angles – and fast!

Conversely, while the startups are busy talking about how different they all are, they are also going to have to learn to play nice with other networks.

One of the big problems with switched wireless LAN is that none of the systems work that well together, or with the legacy 802.11 kit you might happen to have lying around.

Back when it was a dewy-eyed young startup, Airespace tried to deal with this issue by proposing a standard method of communication between the switch and access points. It was called the lightweight access point protocol (LWAPP) – some of you may remember it. It seemed like a neat idea, but the whole thing got bogged down in politics.

Well, in case you didn't notice, LWAPP is back on the agenda, baby (see Cisco's Airespace Program). And this time Cisco is in the driver's seat.

This could change the game for the rest of the players in the market. If Cisco gets LWAPP working with its wireless LAN products it becomes a de facto standard for enterprise wireless LAN networks. So, it's probably time for the players in this market to take another look at LWAPP.

Even if that particular protocol doesn't take off, it's definitely time for wireless LAN switch players to think about promoting more interoperability between their systems and third-party access points. It is the features they offer – not the hardware – that counts, especially now.

— Dan Jones, Site Editor, Unstrung

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