There were 3,100 attendees at the Atmosphere show in Las Vegas, most of which appeared in attendance at the keynote.  Artificial Intelligence and Cloud were the main topics.  Specifically new for the show:  cloud-managed SD-WAN, NetInsight, ArubaEdge Partner program, Cape Networks acquisition.  Cloud-managed SD-WAN – June/July ’18 availability (dynamic path selection, VPC direct to AWS or Azure).  NetInsight is a data-collecting and cloud-analysis AI platform that finds anomalies and allows improvements to wireless LAN operation.  Cape Networks acquisition to allow user-experience simulation for cloud-services connection quality measurement. 

Keerti Melkote, President of Aruba, discussed financials: FY17 was up 15% Y/Y, reaching $2.5B, split 49% to wired and 51% to wireless.  (650 note: for C17, we measure WLAN + non Data Center Switch + Enhanced NAC product revenues at $2,260M).

A key message of the presentation was that as enterprises embrace cloud-services applications like dropbox, Salesforce and Office 365, this means enterprises become more focused on edge access than ever.  Citing statistics like that 80% of advanced attacks  use valid credentials, 8 weeks average gestation period of typical attacks, and 84% of those who’ve deployed IoT have been breached, the company said that securing the edge is more important than ever and discussed the Aruba 360 Secure Fabric. 

​Aruba had customers on stage to endorse various products, including Accenture, Ohio State University, and CBRE.  Other customers mentioned on slides included Lufthansa Technik, Purdue University, Rajasthan, Disney, Time Warner, University of Minnesota, University of New Hampshire, University at Buffalo, Northwestern University, University of Washington, Bucks, Virginia Tech, University of Iowa, Illinois, and Lenovo.  

cWe attended the upbeat Alcatel-Lucent Enterprise (ALE) Connex18 conference, where the company said its strategy is focused on three pillars: verticals, cloud and services.  In its networks business, most significantly, the company announced: its Omnivista Cirrus cloud-managed network services offering, the WLAN indoor Location Based Services system and its plans for its Network On Demand offering.  Finally, the company has retained the use of the Alcatel-Lucent Enterprise brand name for the next few decades, shutting down speculation of a rebranding.

Verticals.  Company has organized its development and selling efforts around five vertical markets: transportation, government, healthcare, education and hospitality.  Last year, the company achieved over 100% growth in its transportation vertical, benefiting from Internet of Things (IoT) trends.  Our view is the transportation vertical and, more generally, industrial, has the opportunity to grow faster than other verticals due to the growing number of IoT use cases emerging.

Cirrus.  The company will soon offer a cloud-managed network services capability to customers that use its WLAN and switch products.  In this respect, ALE is taking on Cisco's Meraki and Aerohive, among others.  Customers can choose from its free offering or its premium offering, depending on what features are needed.  We expect that the company will be aggressive about moving customers to this service.  Pricing was not announced, though we expect the company will set prices generally at a modest discount to those of Meraki, both on product and services.

WLAN & Location Based Services (LBS).  The update focused mainly on the in-house developed Stellar WLAN product line.  Its capabilities have improved over the past year, its management capabilities have improved and will soon include cloud based management (called Cirrus), and the devices are being offered using new business models (including NOD).  The wireless product line is being specialized to support the new verticals discussed earlier.  Generally, Stellar is moving up market.  The Stellar WLAN product line is much broader than it was last year and has increased capabilities, including far greater scalability - Stellar will support 4,000 APs per campus will soon be possible.  ALE exepects Stellar WLAN to support 802.11ax by 4Q18.

The company made a big deal about Location Based Services.  Today, Bluetooth (specifically BLE) is the wireless technology being used.  BLE is incorporated into high end APs and is available using USB ports on the rest of the WLAN Access Points, or BLE beacons are available, too.  The company will offer WiFi LBS later in '18.  Examples of capabilities enabled by LBS include geopositioning and wayfinding, geofencing notifications, people tracking/flow, analytics (geofencing based).  For instance, for healthcare, the company demonstrated a 'Way Finder' capability that runs on patient smartphones that uses WiFi and Bluetooth capabilities from its WLAN APs to allow patients to navigate themselves through the healthcare facility.  Another example is for the transportation industry, where the company's ruggedized switches are finding a home, the Outdoor ruggedized APs are matched well.  

Network On Demand (NOD).  The company has signed up about 40 customers to use its NOD offering, which allows customers to use ALE switches and wireless products while paying a monthly fee instead of purchasing the equipment up front.  NOD was introduced in 4Q17 and is currently available for in-house developed products like OmniSwitch and Stellar WLAN.  NOD may be offered for third party devices, such as those from HPE Aruba, but are currently not available.  We understand that the network architecture is designed by ALE.  The company gave a few examples of customer types, mainly surrounding the idea that a quick decision had to be made on upgrading the network but there was a lengthy approval process for capital spending but a short one for operational spending, or that there was insufficient budget for the capital spending.