Juniper Networks Looking to Acquire Aruba or Meru?Juniper Networks Looking to Acquire Aruba or Meru?

The rumor mill is buzzing that Juniper Networks has its sights on an expansion in the wireless LAN market. FT.com carried a story Monday that Juniper's new CEO Kevin Johnson, is looking to acquire either Aruba Networks or Meru Networks to round out their product line in the wireless area and better compete with industry-leader Cisco. Mr. Johnson, who had previously headed Microsoft's platforms and services division, replaced Scott Kriens as CEO last month. Kriens maintains the position of chairman.

The rumor mill is buzzing that Juniper Networks has its sights on an expansion in the wireless LAN market. FT.com carried a story Monday that Juniper's new CEO Kevin Johnson, is looking to acquire either Aruba Networks or Meru Networks to round out their product line in the wireless area and better compete with industry-leader Cisco. Mr. Johnson, who had previously headed Microsoft's platforms and services division, replaced Scott Kriens as CEO last month. Kriens maintains the position of chairman.Given the ongoing turmoil in the WLAN infrastructure market, such a move is not unlikely. Belden acquired WLAN switch maker Trapeze networks in June, and HP picked up Colubris Networks in August (not to mention Motorola's acquisition of AirDefense), so the bigger infrastructure players are clearly looking to round out their wireless product lines.

The big question is whether Juniper would go after the privately held Meru, or Aruba, which went public in March 2007. Aruba's stock opened at $14 and went up to $15 by the next day; this morning it was trading around $5.50. Analysts are targeting an acquisition price around $8, so the second buyers would be getting a lot better deal than the first.

Aruba and Meru take radically different approaches to WLAN technology. Aruba follows the more traditional cellular approach like Cisco and Trapeze, where access points covering different parts of the service area are assigned to different WLAN channels. Aruba also boasts a heavy emphasis on security, with an integrated firewall and deep packet inspection capability. Meru pioneered a unique overlay approach that assigns all the access points to the same channel and uses a proprietary scheduling system, which they claim is far more efficient at supporting voice applications.

While Aruba's results are public, analysts must guess at Meru's market share, though most reports put them somewhere behind Aruba, with both trailing Cisco by a significant margin. That type of basic product architecture is something that you can't change overnight, so whether Juniper chooses Meru or Aruba will tell us something about their willingness to take chances on non-standard technology approaches.

If there is substance to this rumor, we'll probably hear the outcome within a couple of weeks.