Cisco to buy Airespace

WLAN switch market consolidation begins

Cisco is to buy WLAN switch maker Airespace, laying down $450m worth of shares for the privately held firm.

The move, forecast here last year, heralds the start of much-anticipated consolidation in the emerging enterprise-level Wi-Fi market.

Provided regulatory bodies and shareholders raise no objections, Cisco will take possession of Airespace on 30 April. If the deal goes ahead, Cisco will broaden the company's existing WLAN switch portfolio and see Airespace technology incorporated into existing Cisco products.

To date, the WLAN switch market has been dominated - in mind share at least - by a host of start-ups founded to bring Wi-Fi to enterprises by providing the security, management and integration (into existing networks) features demanded by big business but missing from a market that has been so led by consumer products.

Airespace was one of them, and has taken second place in the market behind Symbol, an established player that leveraged its vertical market WLAN specialism to move into the switch arena.

Cisco was slow to enter the market, citing doubts over the willingnes of corporates to invest in wireless. But customers are jumping aboard, and the giant moved into the WLAN switch market in May 2004.

The Airespace acquisition became the subject of rumour last week, but Cisco appears to have been nosing around the start-ups for some time. Airespace rival Aruba, which is currently third in the market, claims it too was approached by Cisco, but rejected its overtures.

Buying either Aruba or Airespace would pitch Cisco into the top league, but the deal still leaves it behind Symbol. However, lesser competitors, such as Extreme and the troubled Trapeze, will find it harder to stay in the running. Cisco appears to be planning to retain the Airespace brand, just as it did with consumer-oriented Wi-Fi equipment maker Linksys. Indeed, Linksys may benefit from Airespace's more SME-oriented products and technologies. ®

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