The purchase fills a gaping hole in Juniper’s enterprise networking portfolio. Juniper had been evaluating WLAN players to acquire for the past two years, according to David Yen, the company’s executive vice president and general manager for fabric and switching technologies, but the industry has been expecting Juniper to enter the WLAN market for even longer than that.
“We believe the deal makes abundant sense given Juniper’s current lack of a wireless LAN strategy and the growing value of wireless LAN products at the edge of the network,” wrote Jason Ader of investment firm William Blair & Co., in a bulletin on the purchase. “Trapeze’s well-regarded WLAN products will complement Juniper’s growing enterprise switching presence and position it better against the competition. According to Gartner, more than 60 per cent of end users purchased their WLAN solutions from the same vendors as their wired LANs, meaning that Juniper has likely been leaving a lot of opportunity on the table.”
In acquiring Trapeze, Juniper enters another market led by rival Cisco. Trapeze, however, is a distant competitor — its share of the US$1.6 billion enterprise market in 2009 was 2.2 per cent, according to Dell’Oro Group, trailing Cisco, Aruba Networks, Motorola Inc., Hewlett-Packard Co., Meru Networks and Alcatel-Lucent.
In a research note to investors, financial analyst Paul Mansky of Toronto’s Canaccord Genuity noted publicly-traded Aruba and Meru were also rumoured to be on Juniper’s shopping list. Brocade Communications Systems Inc. “has aspirations” to add WLAN products to its lineup, he added. It now OEM’s equipment from Motorola.
While some think Juniper is late getting into wireless, Andre Kindness, a senior research analyst for enterprise networking at Forrester Research, believes the timing is right. Only two years ago the manufacturer added switches to its lineup, he argued. Adding wireless too soon risked overwhelming sales and technical staff.
In addition, the surge of sales in smart phones and, more recently tablets shows that 2011 will be the year network managers shift their attention from the data centre to the edge of the network as more employees bring their own mobile devices to work or organizations supply them. According to a recent Forrester survey 60 per cent of organizations now support personal devices, he said. It wasn’t nearly that many a year ago.
Juniper, citing Dell’Oro data, says the enterprise WLAN market is expected to grow from US$2.2 billion in 2010 to US$3.4 billion in 2014.
Trapeze was one of a pack of start-ups that pioneered the concept of the “wireless LAN switch,” linking with so-called thin access points to centrally control and secure WLANs, and allow clients to roam seamlessly. Juniper singled out its Smart Mobile WLAN architecture for centralized and distributed networking and “intelligent switching,” which is designed to allows organizations to deliver voice for hundreds of users and scale WLANs across the enterprise without compromising security or manageability.
Trapeze owns the largest number of patents in WLANs — 17 — with 49 more pending, Yen says. He says this, as well as Trapeze supplying Juniper with WLAN equipment for several years, led to Juniper’s decision to pick Trapeze over its competitors and peers.
“They are well regarded in the industry,” Yen says. “Their architecture is the best for scale and reliability. And they are complementary to Juniper’s strategy.”
Now that the industry is much more mobile, “it was time for us to include wireless,” Yen says.
Trapeze has more than 6,000 customers, including OEM relationships with 3Com, Enterasys and Nortel.
Belden acquired privately held Trapeze in 2008 for US$133 million in cash to add a controller-based WLAN product line to its existing copper and fiber-optic cabling, cable management and connectivity products. Belden attempted to position itself as a supplier of unified wired and wireless products buts sources say Belden has done little to capitalize on the acquisition.
Juniper will inherit 127 employees from Trapeze. The acquisition is expected to close before the end of the year.