Enterprise Wi-Fi vendor Aruba Networks is to acquire Meridian Apps to extend its reach in providing indoor wireless access in large venues ‘ an increasingly hot market for operators and their suppliers to take steps towards carrier Wi-Fi.
The news came after Aruba announced disappointing quarterly results, which suggested it was suffering intensified competition from Cisco in its core enterprise WLan space, and has been slower than rivals to expand into the public access, carrier sector. By contrast, corporate and operator Wi-Fi was a strong point in Cisco’s own quarterly report.
Aruba, second to Cisco in the enterprise WLan segment, did not announce what it will pay for privately held Meridian, but said the deal would bring a Wi-Fi based wayfinding solution for smartphones and tablets to its systems. This will enrich the contextual and location information it can harness to personalize and improve services to Wi-Fi users.
Meridian’s enterprise software platform is targeted at public venues and helps attendees navigate around these locations. Venue owners and their partners can use the software to create branded mobile apps, supporting functionality like turn-by-turn directions, context aware advertising and detailed analytics about users’ movements and preferences.
“GPS-based wayfinding solutions are extraordinarily popular, but they don’t work well indoors,” said Aruba CTO Keerti Melkote. “We intend to address that gap by creating ‘indoor GPS’ using Aruba’s Wi-Fi infrastructure and Meridian’s wayfinding platform. The addition of Meridian will enable enterprises to tap into a wealth of network driven information so that they can better engage their customers with more personalized services.”
Last week, Aruba saw its share price fall by the steepest amount in five years on downbeat forecasts which came in below Wall Street expectations. Its shares fell by 30% in the biggest intraday trading drop since February 2008 for the company, and its stock has declined by 15% in the year so far.
In its fiscal third quarter, it swung to a loss, dragged down by higher costs and taxes, despite a rise in revenue. On the earnings call, CEO Dominic Orr said he was ‘disappointed’ with the results, and blamed the global economy and rising competition despite the growth in the mobile enterprise space. For the quarter ended April 30, the firm reported a loss of $20.2m, or 18 cents a share, compared with a year-earlier profit of $6m, or five cents a share. The latest period included tax provisions of $17.9m, compared to a tax benefit of $3.1m a year before. Excluding items, Aruba posted earnings of 11 cents, down from 16 cents. Revenue grew 12% year-on-year to $147.1m
On a conference call, executives explained they had slashed their forecasts because of a ‘heightened level of competition’ and analysts said a key factor has been Cisco bundling or cutting prices, making it hard for smaller rivals.