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.
Yesterday, Comcast announced its ActiveCore SDN platform. We are attending Comcast’s analyst day and learned quite a bit on day one, but wanted to focus this blog on Routing.
To date, there has been an argument of SD-WAN and it ability to replace expensive telco MPLS solutions. If a customer continues using MPLS, it is likely they will keep their old router or buy a new router. But what happens when a startup uses ActiveCore without a legacy infrastructure or builds a new branch(greenfield)? In many cases, the CPE box provided by Comcast and 1 Gbps bandwidth is more than enough, especially for a mobile Cloud based workforce(many new companies fall into this category).
We continue to believe MPLS will live on and have a very long tail, but are seeing capable platforms threaten traditional vendors and the branch/access router market. It will be interesting to see what other SPs around the world do for SD-WAN as well as how traditional vendors and startups address this changing dynamic in businesses of a mobile workforce that uses Cloud platforms and a VPN tunnel is enough to connect back to headquarters without MPLS and/or without the need for a traditional router.
SD-WAN vendor Riverbed announced plans to acquire Wireless LAN vendor Xirrus today. Riverbed emphasizes its product line and portfolio strategy in the Software Defined Wide Area Network (SD-WAN) market. Xirrus has emphasized its product portfolio as being a cloud-enabled Wireless LAN (WLAN) market vendor. Two main themes come to mind with this acquisition:
As background, it is quite interesting to see the journey both Riverbed and Xirrus have followed over the years that makes this deal work. Both today are active participants in the cloud and software defined markets. Both Riverbed and Xirrus have participated successfully in their respective marketplaces to have undergone transformations as their markets have evolved.
Our view is that SD-WAN is more than WAN optimization. It is more than just security and services. And it is more than branch routers. SD-WAN is a full branch play. Every vendor will approach SD-WAN differently depending on their strengths. With the Xirrus acquisition, Riverbed just differentiated from its SD-WAN competitors by doubling down on enterprise relationships. We are excited about the SD-WAN opportunity. Many vendors are repositioning their product lines to address SD-WAN, and Riverbed is both strengthening and differentiating its product line to more fully address enterprise needs by adding LAN and WLAN capabilities to its portfolio.
WLAN industry consolidation has been a major theme in the past several years. Most recently, we've seen:
Consider that the early consolidation deals for WLAN companies were mainly to allow Ethernet Campus switch companies to sell WLAN/Campus Switch products to their customers. HPE's May 2015 acquisition of Aruba was a good example of this kind of acquisition. And the acquisition was done in large part to respond to Cisco's acquisition of Meraki a couple years before the HPE/Aruba deal. And, in a corporate M&A twist-of-fate, in mid 2016, switch vendor Brocade announced plans to acquire WLAN vendor Ruckus. But, before it could complete the deal, semiconductor vendor Broadcom announced its own plans to acquire Brocade and spin off all Brocade assets but its Fibre Channel assets, putting in motion the Arris for Ruckus and Brocade ICX switch products deal. So, the first several deals were switch/WLAN related, and like we said, more recently, WLAN acquisitions are related to broader themes than just campus switch consolidation of WLAN, including broadband equipment vendor Arris for Ruckus and SD-WAN company Riverbed for Xirrus.
This leaves very few pureplay Enterprise-class WLAN vendors in the marketplace these days, Aerohive being the largest among the pureplays. Interesting indeed.