Aruba Plots Imminent IPO

Switch startup's new CEO says it could be ready to go public 'within months'

Dan Jones, Mobile Editor

August 30, 2006

2 Min Read
Aruba Plots Imminent IPO

Enterprise wireless LAN player Aruba Networks Inc. (Nasdaq: ARUN) is firming up its plans to go public. The firm's new president and CEO Dominic Orr says that Aruba could now IPO "within months."

Aruba is consistently ranked among the top-selling enterprise wireless LAN vendors, generally number three to Cisco Systems Inc. (Nasdaq: CSCO) and Symbol Technologies Inc. (NYSE: SBL)'s respective first and second places. (See Cisco's WLAN Stranglehold.) Former Alteon head Orr says that going public would help Aruba with "branding" and name recognition so that the company wouldn't have to prove itself when going after big deals.

"We don't have a pressing need to IPO," Orr tells Unstrung. "Its all about branding. We spend more time justifying the validity of the company than we do the products."

Orr reckons the company is 80 to 90 percent ready to go public. "We're on the eve," elucidates Keerti Melkote, Aruba co-founder and VP of product management and marketing.

Despite the fact that some recent big-ticket IPOs -- such as the Vonage Holdings Corp. (NYSE: VG) float in May -- have ended up backfiring on the companies involved, Orr is confident that Aruba can buck the trend. (See Vonage Misses the Mark.) "I want to emphasize that we can demonstrate that we have a very profitable business model," he says.

Orr has set targets to be met before the IPO that he says the company is "on track" for. These include a gross profit margin of "over 65 percent" and an 18 percent operating profit margin. These tend to be some of the figures that investors look to when trying to gauge the financial health of a company. "That's in the Cisco or Juniper range," Orr says.

Orr also claims not to be fazed by the need for Aruba to comply with tighter Sarbannes-Oxley financial regulations as part of the requirement for going public: "We're taking a positive mental attitude... using this exercise to fine-tune our administration."

Aruba has long been bullish about its IPO prospects. The company has said for a couple of years that going public is its intention. (See Aruba Swaps Heads, Aruba Plucks Ex-Peribit CFO, and 'Switch' CEOs Sound Off .)

— Dan Jones, Site Editor, Unstrung

About the Author(s)

Dan Jones

Mobile Editor

Dan is to hats what Will.I.Am is to ridiculous eyewear. Fedora, trilby, tam-o-shanter -- all have graced the Jones pate during his career as the go-to purveyor of mobile essentials.

But hey, Dan is so much more than 4G maps and state-of-the-art headgear. Before joining the Light Reading team in 2002 he was an award-winning cult hit on Broadway (with four 'Toni' awards, two 'Emma' gongs and a 'Brian' to his name) with his one-man show, "Dan Sings the Show Tunes."

His perfectly crafted blogs, falling under the "Jonestown" banner, have been compared to the works of Chekhov. But only by Dan.

He lives in Brooklyn with cats.

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