AireSpace sold for $450 million

The WLAN shakeout continues. Cisco just announced that it is buying AireSpace for about $450 million, in an attempt to fill a gaping hole in its WiFi product strategy. News.com had the story first. The Linksys could not really scale into the enterprise after all. WiFiNetworkingNews adds: “With Cisco’s expertise in the increasingly common 10 Gbps Ethernet switches and backbones, this should allow Airespace to more easily extend their intelligence without bogging down networks.” Going forward a quick back of the book analysis: The price was around 11x earnings or about $40 million in 2004 sales. This trims down the market to three major players now Cisco, Aruba and Colubris now. There are others who are desperately looking for exits. Meru is one, which might end up selling its IP, and Trapeze which is still in the game, but has been meandering so to speak. In short, expect Nortel and Alcatel to open up their pocket books. Two thirds of AireSpace sales were through Nortel and Alcatel Enterprise Divisionis getting is WLAN from Colubris. In related gossip, Nortel also kicked Accton out so that leaves them with Aruba as a partner of choice. My guess, Aruba goes to Nortel and Colubris to Alcatel.