Back during the 20th century, there was this quaint notion
that you shouldn't take your work home with you.
These days, people not only carry their work home with them,
they take it pretty much everywhere they go.
This is particularly true of professionals who tote around
Wi-Fi-enabled devices that let them log into company networks and
conduct business wherever and whenever they want.
The explosion of these devices -- laptops, smartphones,
tablets and the like -- has created a dramatic shift in the use
of Wi-Fi in business networks. This in turn has pressured
businesses to expand and upgrade their networks to support more
users and devices.
One company that helps businesses meet this need isAruba
Aruba provides network access solutions that enable secure
access to data, voice and video applications for enterprises,
mobile business professionals, remote workers, guests and service
providers across wireless and wired networks.
The company has focused much of its recent attention on
growing its business in wireless local area network (WLAN) and
Bring Your Own Device (BYOD) solutions.
As the name suggests, BYOD lets employees bring their own
Wi-Fi-enabled devices to the workplace and enjoy the same levels
of access as they would with a wired unit.
Aruba's focus in this area is a direct response to a growing
trend on the part of businesses and other enterprises to give
employees greater flexibility in accessing networks.
"WLAN has moved higher in priority for CIOs. Our checks show
that the BYOD trend is gaining momentum, and a reliable WLAN is
becoming a staple of IT infrastructures," Stifel Nicolaus analyst
Sanjiv Wadhwani said in a January note.
JPMorgan analyst Rod Hall, who started coverage on Aruba in
December, says there's been a "dramatic shift" in Wi-Fi use in
enterprise networks amid a surge in the number of wireless
devices and Wi-Fi users connecting to enterprise networks.
Unlike in prior years, Hall says, "employees are demanding the
flexibility of bringing their own Wi-Fi-enabled devices to the
workplace and expecting the same levels of access, security and
Aruba looks to meet those needs with a variety of products
that are designed for ease of use.
Its Mobility Controllers provide context-aware networking
across both wireless and wired LANs. Contextual data such as user
identity, device type, applications and location are used to
enforce security and quality-of-service policies.
The company's Aruba Instant is a controllerless WLAN solution
that delivers enterprise-grade security, resiliency and scale to
distributed networks. There are no physical or virtual
controllers with Aruba Instant and no ongoing service fees,
license fees or management appliances.
Aruba's ClearPass Access Management System automates
differentiated user and device access, policy management and
provisioning of devices for secure network access and posture
assessment. Each user has access privileges based on who he is
and what device he uses.
Such products have helped move Aruba into new areas of growth,
"Aruba is solidly positioned in the growing WLAN market as
both BYOD and wireless trends accelerate in the enterprise," Hall
noted in a December report. "New products such as ClearPass and
Aruba Instant open up new revenue opportunities to penetrate
deeper within existing customers and effectively expand Aruba's
total addressable market and customer base."
The enterprise WLAN market already includes a number of large
and small companies. It continues to draw even more players as
the technology evolves.
Aruba's main rivals includeCisco (
) and Motorola Solutions. The company also competes against
smaller, privately held firms, such as Aerohive Networks,
Enterasys and Xirrus.
Cisco is the dominant player in the enterprise WLAN market
with a 55% share at the end of the 2012 third quarter, Hall says.
Aruba's share has ranged from 12% to 14% the past few
Hall reckons Aruba can make share gains if it continues to
roll out innovative products.
In addition, he says, "international channel expansion should
help Aruba continue growing overall share, given the company
derived 62.6% of its fiscal year 2012 revenue from the U.S."
The U.S. accounted for 64% of Aruba's revenue during its
fiscal first quarter, which ended Oct. 31. Asia-Pacific/Japan
pitched in 17%, while Europe/Middle East/Africa accounted for
15%. The rest was split between other regions.
Overall revenue came in at $144.5 million during the quarter.
That was up 21% from the prior year and above Wall Street
estimates. It was the lowest revenue gain since the 2010 first
quarter, when the top line rose 10%. Revenue growth has
decelerated five straight quarters.
On a more positive note, Aruba's Q1 earnings rose 29% to 18
cents a share, topping views by a penny. That marked the highest
EPS gain in five quarters.
"The proliferation of mobile devices, BYOD and new
applications continue to drive demand for our solutions and make
mobility a clear priority for CIOs around the world," Aruba Chief
Executive Dominic Orr said in a statement. "We are well
positioned to capitalize on these trends and expand our market
Analysts polled by Thomson Reuters expect Aruba's full-year
earnings to rise 25% in fiscal 2013 and 24% in fiscal 2014. The
company's stock trades near 22.