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Last week, Juniper Networks (s JNPR) decided to finally open its purse and snapped-up Trapeze Networks, a company that specializes in the gear used to set up corporate wireless networks, for $152 million in cash. It was recognition on the part of Juniper that the enterprise networks were going through a sea change, thanks in part because of a big upsurge in the number of mobile devices connecting to corporate networks.
For Dominic Orr, CEO of Sunnyvale, Calif.-based Aruba Networks (s ARUN), this is nothing new; his company makes wireless networking gear and has been on a tear for past year or so. In a recent earnings-related conference call with analysts, Orr talked about the future demand coming from corporations who are seeing a big shift in the way their networks are being used.
Our James Kendrick had first pointed out (subscription req’d.) the potential of Apple’s iPad (s aapl) as an enterprise tool as early as April this year. From anecdotal evidence, we’ve heard many companies are building specialist enterprise apps. The financial industry, in particular, has been quick to embrace the iPad.
“The network model has shifted from hotspots to ubiquitous and uniform networks access,” Orr told me. Companies now want wireless access not only in boardrooms and hubs of productivity, but also in stairwells, corridors, kitchen and other areas. Why? Because the devices accessing the network are entirely different, he pointed out. “Our demand is being driven by smartphones and smartpads,” he said. In the past, laptops were used for wireless access, but it was difficult to walk around and use them as easily one can use a smartphone or an iPad. The smart devices, however, encourage anywhere computing, which, in turn, puts a different load on the networks.
Furthermore, iPads and tablets are very multimedia-centric, which means folks are looking for good, solid and even coverage across their entire campus, and not just in certain specific areas, Orr pointed out. “While netbooks and laptops have wired Ethernet built into the them, the new smart devices can only access the Internet via mobile connections,” he added. “You either have 3G or Wi-Fi.”
As a result, the demand for wireless gear is surging. A recent report by research firm Dell’Oro Group estimates that the enterprise wireless local access network (WLAN) technology market will grow from $2.2 billion in 2010 to $3.4 billion in 2014.
It’s the C-Suite executives who are pushing the iPad deployments in the enterprise, Orr observed. It’s one of the reasons why iPad is finding easier traction inside the enterprise and will continue to gain momentum: So much so, Aruba recently upgraded its software platform to address the needs put on the network by iPads and other smart devices. With nearly 48 million iPads likely to be sold next year, Orr is licking his proverbial chops.
So what about Juniper with Trapeze? “That will have no major impact on our business,” he added. Instead, he hopes to battle it out with Cisco Systems (s CSCO) and Hewlett-Packard (s hpq), his long-standing and larger rivals in the Wireless LAN business.
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