Aruba cites security interest as part of Azalea buy

Global wireless networking giant says it now has
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Thursday, May 20, 2010

SUNNYVALE, Calif.—Aruba Networks, a manufacturer of distributed enterprise network products, is talking up its video surveillance capabilities following the announcement last week that it intends to acquire Azalea Networks, a wireless mesh manufacturer, and is looking to go head-to-head with physical security wireless players like Firetide, Motorola and Fluidmesh.

“We already did indoor carpeted space, like offices,” said Michael Tennefoss, head of strategic marketing at Aruba, “and we did indoor uncarpeted space like warehouses. And then we have short-haul solutions for extending surveillance at schools, say, or for other campus environments. But we didn’t have a long-haul outdoor solution, and because our customers are global 2,000 companies, their networking needs don’t stop at the edge of the parking lot. It could be a refinery, a substation, what have you, and in almost every case, real-time communications like voice and video have a role to play, and the only way to reach them is with mesh.”

Should the deal go through, Aruba will pay roughly $27 million in stock and $13.5 million in cash for Azalea, which has raised more than $14 million in funding since its founding five years ago.

Aruba is already the global number two provider of wireless LAN, said Tennefoss, which shows the company has the resources to take Azalea, which has so far seen its greatest success in China and Europe, and use its technology to penetrate the North American market. “We have the resources to put behind it,” said Tennefoss, “between our integrators and sales force.”

Aruba did $199 million in revenue in 2009, an increase of more than $20 million over 2008. The company has $120 million in cash on hand and is growing at more than a 30 percent rate year-over-year. Aruba is cash-flow positive and is profitable if you back out amortization of past acquisitions. Further, it carries no debt. All of this can make Aruba an aggressive player in wireless video surveillance.

“We’re absolutely coming into the same markets” as Firetide, Motorola and Fluidmesh, Tennefoss said, “and we’re coming in with a solution that’s substantially technically superior.”

Asked what makes Azalea superior, Tennefoss cited mesh technology that is “peer-to-peer,” so that any mesh device can talk with any other mesh device without having to go through a gateway; a “best-path algorithm” that is “very different from other solutions”; the use of multiple radios in each node that can operate at different frequencies; and packet aggregation and error recovery that sends video in bursts and reconstructs those packets should there be damage along the way. Security Systems News has not evaluated those claims with any technical testing.

Other features of Azalea’s mesh technology include the ability to operate support point-to-point, point-to-multi-point, and mesh architecture; the ability to delivery data wirelessly to vehicles traveling as fast as 60 mph; and jumps from mesh node to mesh node with very little loss of bandwidth.

“The attraction for Aruba,” said Tennefoss, “is that Azalea has focused on real-time high performance like broadcast-quality video over mesh, as opposed to those that focused on metro-mesh—providing internet access, email and that kind of thing. That market has not panned out, so [other mesh providers have] all re-purposed as delivering video and enterprise networking, but it doesn’t work that way. You get jitters, huge delays when you go from point to point. They weren’t designed from the ground up to handle it.” Tennefoss mentioned Tropos Networks as a competitor that loses bandwidth at a far greater rate than Azalea’s technology. He was not necessarily speaking specifically of other players in the video surveillance market.