Aruba Networks: Enabling the Next Generation Workplace
Date: Sunday , December 09, 2007
Across ‘U.S. Air Force’ bases around the world, every time a fighter jet takes off on a sortie or comes back battered from a relief operation, Aruba’s wireless access points whirl into action, connecting to the plane, recording the exact time of the liftoff and touchdown, and registering the type and make of the plane and its ‘user’.
Keerti Melkote, co-founder and head of products and partnerships for Aruba Networks says it was a long fight before Wi-Fi access points were accepted for use by the U.S. Air Force. For one, for security reasons the military did not immediately embrace Wi-Fi because prior to Aruba no supplier was able to provide data encryption end-to-end from the client all the way to the data center. Thirdly, all parties were following what Melkote calls “a port-centric approach” in which each base station acted like a separate point of connection and creating a management nightmare and security risk.
Melkote tackled the problem using a different tack - he took a user-centric approach that dispensed with ports and instead granted each user a separate identity with which the Wi-Fi network could authenticating him or her. Melkote was convinced that marrying identity-based security with the mobility afforded by an enterprise class wireless broadband platform would change the networking business forever.
Those efforts, combined with marketing targeted at key defense events, created a buzz and addressed the government’s security concerns. A few months later Aruba
Trek to maturity
The company was listed on NASDAQ under the ticker ARUN—that’s to emphasize our Indianness, says Melkote—on March 28, 2007. It was a momentous occasion for Melkote, who co-founded the company with Pankaj Manglik during the ‘nuclear deep-freeze’ that followed post 9/11. Money wasn’t flowing, skepticism was at its peak, and acquisition by a big company seemed to be the only avenue to success.
A year into Aruba’s existence, the market started picking up and the company was on target. An acquisition offer was on the table, and the co-founders were half-tempted to sell-out. “Our VCs believed our opportunity was much bigger than the numbers on the table,” recalls Melkote. There would be several more offers in the sunsequent four years, but each time they were declined . Melkote learned the virtue of patience during an earlier stint with Shasta Networks. Shasta had an acquisition offer from Nortel and the powers-that-be in the company believed that the umbrella of a bigger company would give it more stability. They sold, nipping an immense opportunity in the process - had they held on a little longer the price tag would have been much higher.
Melkote admits to tumultuous times in his five years at Aruba. “As a first time entrepreneur, you are jittery, you tend to over-react.” How would the market react, what would our competitors do to kill my business—thoughts such as these constantly nagged at him. He persevered because ‘the world moves slower than a tensed mind apprehends.’
Three factors contributed to Aruba’s listing on the NASDAQ this past March:
1. The market turned and connectivity was shifting from wired to wireless;
2. The company had grown and it was time for it to be professionally managed if it was to continue to
3. Differentiated technology and the user-centric approach was attracting lots of new customers.
Cream of the Crop
Melkote is one of the few founders to have led a company through to an IPO. As a result one would expect his vision for the company too to have changed. “Not quite,” he says. “The vision was always to grow and make user-centric networks the way of connecting users to enterprise resources. What is changing are the milestones—like acquiring 1000 customers or registering $100,000,000 in revenue.”
The first such milestone for Aruba was the signing in of its first customer, Warner Brothers. Al Foitag was at the helm of Warner Bros. studios then, and he wanted to enable wireless access across Warner’s studios so that producers could log-on from anywhere and not just designated locations. The ability to provide seamless guest access helped Aruba win the Warner Bros. contract. In fact, pitching the ability to provide guest access has won the company many additional converts.
Heathrow Airport’s wireless infrastructure contract is a case in point. The authorities wanted to enable mobile check-ins, and provide Internet access in the airport lounge and in duty free-stores in the new Terminal 5 facility – most of these services will be used by guests and travelers.
Employee access comes first in high tech companies. Honchos at these companies are looking for mobility, as techies often work throughout a facility , including gardens and open spaces, and not just in one location. Aruba’s technology helps bridge the connectivity and security gap.
Many high tech companies, including Microsoft, Yahoo, Amazon, Google, SAP and eBay, are Aruba customers. Melkote has consciously attacked what he calls the “cream of the crop” companies in every vertical, and once they come under the Aruba fold smaller firms typically follow.
Fewer feet on the street
Aruba acquires customers through channel partners, with a direct sales executives supporting the channel. “We don’t have the size to merit direct sales persons at every street corner,” says Melkote. “At the same time, if we don’t support our partners, we’re bound to fail.” Selling an Aruba product ‘requires an entrepreneurial bent,” and partners need to be trained on both products and how to overcome objections.
Aruba’s limited direct sales force shoulders the responsibility of evangelizing to its partners. It can take up to 12 months to teach a partner the ins and outs of Aruna’s business and make them competitive. Partners make money selling the gear as a reseller, and of course deliver value-added services such as installation and support.
International partners must often be more self-reliant than ones in the U.S. because there are more direct sales executives in the U.S. Melkote spends a lot of his time traveling across the world, liaising with partners.
In India, Melkote, together with Alok Kothari, Head of Aruba India, have kick started the process of selecting partners. “The Indian enterprise market has matured,” says Kothari, adding that BPOs spanning the country form a considerable part of the company’s prospective clientele. He further says that Aruba’s India center is poised for growth through increases in the India R&D team.
Eye on the future
Five years hence, as wireless technology advances, Wi-Fi enabled smart-phones rather than laptops will constitute the key form of network access. As a result, Aruba is developing fixed mobile convergence (FMC) solutions. “The FMC story holds well for India, more so since phones have far outnumbered PCs and are likely to be the enablers of future enterprise businesses,” says Kothari.
In addition to tackling FMC, engineers at Aruba are busy making the technology media agnostic, meaning that it will run on any medium be it Wi-Fi, wired, WAN, or FMC.
Melkote is clear about challenges he wishes to address in the near future:
1. Building multipurpose networks of the type being deployed at Heathrow’s Terminal 5;
2. Location based connectivity is important for hospitality centers like Las Vegas and Dubai;
3. Streaming video surveillance for educational institutions, both for security and educational purposes;
4. Voice optimization, background noise suppression, and battery-life extension for mobile applications in markets like Japan.
Melkote has his R&D plan clearly marked out, he basks in the knowledge that Aruba is growing fast, on a solid financial footing, and geared up with enough unique technology to take on any competitor regardless of size. “Finally we have arrived,” he says, “…now it’s time to get back to work!”
ARUBA: Where Network follows the User
Aruba plays at the intersection of mobility and security. What Aruba sells is a family of software models that run on perpetual mobility controllers and traffic is spread to these controllers by a family of wired and wireless enterprise access points. The fundamental factor key to Aruba’s success is its ability to develop a user centric networking, which effectively allows in any enterprise, the ‘network to follow the user’.
Aruba was among the tens of companies that inundated the market from 2002 to 2004 with centralized wireless LAN management platforms. For several months, Aruba and a fellow Silicon Valley company Airespace vied for a leadership position in the wireless LAN switching startup space. Wireless LAN hardware market leader Cisco Systems bought Airespace in January 2005 as a way to enter the business. This made Aruba the leading startup in the space. And shortly after Cisco acquired Airespace, Aruba won a major contract to replace a massive wireless network on Microsoft’s campus in Redmond, WA.
The Dell’Oro Group recently published the third quarter wireless local area network (WLAN) market share figures. Cisco finished at 63.4 percent, a slight increase from the 62 percent it held during the previous quarter. Aruba Networks finished a distant second at 8 percent.
The market that Aruba plays in is huge. There are two segments of the market it focuses on. The first one is the wireless LAN market, which is forecasted to be about $3 billion worth by 2010. Second is the network security equipment and software market, which consists of firewall, VPN and intrusion, prevention and protection. When you combine these two markets, the market opportunity is about $8.3 billion as forecasted by IDC and Informatics. Melkote believes the market size is somewhat understated as there are three key areas of incremental growth—Mobile VOIP, Location based services, and Enterprise fixed mobile convergence.
“When we come knocking at the doors of the customers with our mobility solutions, there is a point raised by rational IT folks: If Cisco’s WLAN solutions are good enough then we will probably go with them. The reality is that our architectural solution and differentiation in magnitude is different and better than Cisco. This enables us to go into Cisco accounts and win us broad-based projects from each of these big customers,” says Melkote.
Aruba began shipping its WLAN products—Aruba Mobile Edge Architecture [AMEA] products—in 2003. Enterprise wireless networking has grown appreciably due to the desire for mobile computing. WLAN or VPN (Virtual Private Networks) have been the solution enabling open access on wired network ports. This type of networks, extends the fixed network over the air. Aruba believes its AMEA product takes WLANs to another level by providing additional security features, allowing secure roaming over the entire network, increased performance, and easy scalability and integration. Essentially, Aruba believes it’s built a better enterprise WLAN product. Today the company has over 3000 customers including US Airforce, Google, SAP, Saudi Ramco, and a number of major universities.
Founder, Products and Partnerships, Aruba Networks
Keerti Melkote, co-founder Aruba Networks, chose the name ‘Aruba’ with care, one of the criterions being the name should begin with ‘A’—the leading letter in the English alphabet. As a leader, his concept of team management is exercised with equal care. Melkote, an avid cricket enthusiast, draws comparisons with the game of cricket and says, “It is good to have a superstar in your team at work. However, he or she alone cannot make the team win. To generate consistent positive results the team has to play together. Hence, the team is the star and not the CEO alone.”
Melkote is responsible for Aruba’s product roadmap and forging technology partnerships. He understands that growth is a challenge while aiming at the future. On his future vision for Aruba he muses, “More than communicating to the employees about the vision of the company, what is important is to keep the team completely aligned in the same direction. It is this quality that I admire in Microsoft. They have been able to build a culture, which keeps the team constantly aligned to the vision. This is very evident in each employee you come across in the centers spread over different geographies.”
Prior to founding Aruba Networks, Melkote held senior management positions at Tahoe Networks, a cellular/3G data networking systems company which is now part of Nokia, and Shasta Networks, a broadband IP subscriber management systems company now part of Nortel. Melkote was at Cisco Systems during the LAN switching era in the mid-’90s, where he was responsible for the definition and launch of Cisco’s high-end enterprise LAN switching systems. Before Cisco, Melkote was responsible for deploying high performance LAN and ATM backbone infrastructure at Intel. He holds an MSEE from Purdue University with an emphasis on distributed systems and TCP/IP networking. Melkote has 15 years of technology and marketing experience in both enterprise and service provider networking.