HP buys Wi-Fi gear maker Aruba Networks for $3 billion

An Aruba AP inside the Moda Center

An Aruba AP inside the Moda Center

The rumors from last week were confirmed Monday, as computing giant Hewlett-Packard (aka “HP”) announced it was acquiring Wi-Fi gear vendor Aruba Networks for $3 billion. After cash and debt are accounted for, the actual value of the transaction is $2.7 billion, but what’s $300 million between friends?

Though the headline of the HP release pegs the reason behind the deal as the desire to “create an industry leader in enterprise mobility,” the acquisition will likely cause a lot of business activity in our corner of the world, namely wireless network deployments for large public venues, like stadiums. Over the past year, Aruba has been making a name for itself with high-profile Wi-Fi deployments in venues like the San Francisco 49ers’ new Levi’s Stadium, Texas A&M University’s Kyle Field, and the Dallas Mavericks’ American Airlines Center, among others. Perhaps the most interesting question from a business perspective is whether being part of HP will help or hurt Aruba when it comes to making stadium deals, and whether or not using HP core networking gear will become a required (or preferred) part of prospective stadium Wi-Fi deals.

On a business-wide view, the second $3 billion acquisition this year in the DAS/Wi-Fi space (following CommScope’s $3 billion purchase of DAS and networking supplier TE Connectivity) is perhaps a signal that consolidation is upon us in the greater Wi-Fi and local networking marketplace. Though we didn’t know exactly how and when such deals would shake out, on one hand it’s not that much of a surprise to us since we have always believed that the stadium networking market is really just a precursor to what will eventually happen in other large public venues as well as in large public places like cities and towns: Wi-Fi, which already carries more wireless data than cellular, will continue to expand and appear in more places, generating new business ideas like Wi-Fi phones and Wi-Fi first wireless plans.

The appearance of IBM as a strong entrant in the stadium wireless space can also be looked at as another signal that bigger players are entering the market, which usually means that smaller players — like the Arubas of the world — get snapped up, like a star player being traded mid-year to a team seeking a championship. Cisco, which is no stranger to acquisitions, has been quiet of late, and we are noticing that telecom gear giant Ericsson is making more moves toward Wi-Fi, especially in the arena of small cells and the idea of bringing LTE to Wi-Fi frequencies. Sounds like the Wi-Fi market is moving up from the $10 tables into the green- and black-chip territory.

Who’s next in the Wi-Fi world as an acquisition target? The easy picks are players like Ruckus Wireless and Aerohive Networks, given their ability to conduct their own IPOs. But we’re also guessing there may be some digesting of other smaller concerns in the Wi-Fi DAS food chain as the bigger players seek to add skills, customers and technology via purchases. Stay tuned for what should be an exciting year in the enterprise and stadium Wi-Fi business arena.

Ericsson Study Shows Mobile Will Rule Internet

People always say that it’s a small world, and with the Internet it seems smaller as everyone appears to be connected in one manner or another. Now Ericsson has taken the time to quantify how well connected everybody is in a recent report.

The company has just released its second annual “ Traffic and Market Report-On the Pulse of the Networked Society” that shows how connected the world is now and makes some predictions as to where it is headed.

There is way too much information to provide any sort of thumbnail here but I will mention a few interesting factoids, at least ones that are interesting to me. Not too surprising is the growth of mobile subscriptions which will grow to 9 billion in 2017. How many people will there be at that time I wonder?

Anyway a few other interesting facts is that 50% of the world’s population will have access to 4G and 85% access to 3G by 2017, with 3 billion smartphone users in that year as well. Mobile data traffic is just booming and double from Q1 2011 to Q1 2012, with primarily video driving the growth. The report estimates that mobile data traffic will grow by 15 times between 2011 and 2017.

The overall conclusion of the report is that mobile is the wave of the future and that it s being driven by users that want anywhere, anytime connectivity to video, music and the Internet. This is great news for developer of mobile apps that are targeting sports fans. I suspect that in many ways sports fans are at the foprefront of this move and expect to see a growth in the number and quality of apps as opportunities in this space appear to be growing at a very good rate.