Cisco Deal Jolts WLAN Users

Cisco Systems Inc.s acquisition of Airespace Inc. should bring Cisco up to speed in the wireless LAN management market. But the deal could create headaches for Airespaces resale partners, as well as customers who say they have deliberately avoided Cisco.

Cisco will pay $450 million for the privately held company, according to officials at Cisco, in San Jose, Calif. The deal is expected to close by the end of April. Airespace, also of San Jose, will join Ciscos Data Center, Switching and Wireless Technology Group, led by Senior Vice President Luca Cafiero.

Ciscos WLAN switch presence has until now been limited to its SWAN (Structured Wireless Aware Network) strategy, which includes “thick,” feature-rich access points. SWAN has been competing in the enterprise against the centrally controlled “thin AP” strategy of Airespace and other startups such as Aruba Wireless Networks Inc. and Trapeze Networks Inc.

/zimages/2/28571.gifClick hereto read an interview with Airespace CEO Brett Galloway from July 2004.

Airespaces Control System software is widely considered more comprehensive and easier to use than Ciscos Wireless LAN Solution Engine, something Cisco officials now readily acknowledge.

“If you look at [Airespace] expertise in both control and management, thats what we didnt have,” said Bill Rossi, vice president and general manager of the Wireless Networking Business Unit at Cisco. “Our management software was designed for the vertical market. Ultimately, we plan to merge into one cohesive product line.”

In the near term, Cisco will continue to offer both the SWAN and Airespace product lines, but the undetermined integration plans worry some Airespace customers.

“Cisco is notoriously unresponsive to clients, and their support costs are substantially higher for an inferior level of support,” said Boris Shubin, a network administrator at Dunkin Donuts Inc.s Mid-Atlantic Distribution Center, in Westampton, N.J., which operates an Airespace-based WLAN and is looking to replace its wired Cisco infrastructure. “The tendency to ignore support seems to propagate to any company Cisco acquires.”

The acquisition may also be a thorn in the side of Ciscos networking competitors, especially Nortel Networks Ltd., Alcatel S.A. and NEC Corp., all of which resell Airespace equipment.

As for these existing OEM agreements, the future is uncertain. “Were going to have to figure that out,” said Airespace CEO Brett Galloway, who said he plans to stay on with Cisco.

None of Airespaces OEMs have detailed plans in light of the acquisition news, although they are trying to reassure customers.

“Despite the pending acquisition of Airespace, Nortel is growing its wireless local-area networking business as part of its broader mobility portfolio without distraction or interruption,” said Malcolm Collins, president of Nortels Enterprise Networks division, in Toronto.

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