Dell will broaden its wireless networking capabilities by reselling Aerohive Networks' cloud-based WiFi products, including 802.11ac wireless access points and cloud management platform.
Aerohive announced the reseller agreement April 27, saying that its wireless networking portfolio dovetails with Dell's efforts in developing cloud-managed IT offerings. As business becomes increasingly mobile, data center IT providers like Dell also are looking to add to their wireless networking expertise.
The reseller deal comes almost two months after Hewlett-Packard announced it was buying Aerohive rival Aruba Networks for $2.7 billion, a move that HP said will enable it to offer better converged wired and wireless networking solutions. It also put into question what some of Aruba's partners—such as Dell, which competes with HP in areas like networking, servers and PCs—would do.
The Aerohive agreement is at least one answer to that question.
"Our customers want a simpler, more scalable, and cost-effective wireless network solution," Tom Burns, vice president and general manager of Dell's Networking and Enterprise Infrastructure business. "As IT moves to the cloud, we think the combination of Dell's ability to connect to customers combined with Aerohive's cloud WiFi solutions will deliver a next-generation solution to our customers."
However, that doesn't mean Dell's relationship with Aruba will end. In a letter last month signed by both Burns and Aruba CEO Dominic Orr after the announcement of HP's planned acquisition, both executives said the "partnership remains strong. ... Today we announce our renewed commitment to the partnership and the provision of quality products and outstanding support."
Orr will run HP's networking businesses after the deal closes.
Soon after the HP-Aruba deal was announced, Aerohive officials talked about what it would mean for their company, both in terms of partners and customers. In a post on the company blog last month, Abby Strong, director of product marketing at Aerohive, wrote that Aruba partners had some decisions to make.
"Aruba had a relatively strong channel partner line up, but many of them already offer switches as part of their portfolios," Strong wrote. "Aruba Channel partners may not be happy having to compete against the huge HP channel in products and services, as well as meeting the more stringent HP partnership requirements. Past acquisitions like this have introduced us to some of our best channel partners :-)."
Aerohive officials last month also launched a program called "Get Me Off This Island". It is designed to lure away Aruba customers that might be uneasy with HP's planned takeover of the vendor. As part of the sales promotion, Aerohive will offer Aruba customers discounts of up to 25 percent on purchases of Aerohive networking gear. To be eligible for the program, which will last through the end of the year, businesses must have 25 or more Aruba access points installed at the time they order the Aerohive products. In addition, they must submit a decommissioning statement confirming that their Aruba access points are no longer being used, according to Aerohive.
In a statement released after the HP-Aruba deal was announced, Aerohive CEO David Flynn warned Aruba customers about how the acquisition could impact them.
"Merging two companies is complicated, and inevitably slows down product development, breaks partnerships and creates headaches for customers," Flynn said. Shane Buckley, CEO of Aruba rival Xirrus, had a similar message when rumors of a potential HP-Aruba deal first emerged, saying the "acquisition will likely have an impact on both vendors' WiFi product portfolios, which may cause disruptions to existing customers."
Revenues in the wireless LAN market last year hit $4.9 billion, a 6 percent increase over 2013, according to analysts at Infonetics Research. The growth was not a strong as in previous years, but in a report earlier this month, the Infonetics analysts said renewed spending by K-12 customers and the introduction of 802.11ac Wave 2 access points will help fuel revenue increases in 2015. Access point shipments in 2014 grew 22 percent over the previous year.
The top five vendors in the WLAN market last year were Aruba, Cisco Systems, HP, Ruckus Networks and Zebra, according to Infonetics. Aerohive in 2014 generated $137.3 million in revenue, a 28.1 percent increase over the previous year.
Under the agreement with Dell, the giant tech vendor will resell Aerohive's 802.11ac access points and its HiveManager NG cloud platform, which the company said enables organizations to centrally manage, provision, scale and monitor their mobile networks. Through the platform, customers can deploy and configure an enterprise-class network in fewer than 15 minutes.
Editor's note: This story has been updated to include contents of the joint Dell-Aruba letter.