Aruba To Partners: BYOD Opportunity Is Yours To Seize9:52 AM EST Mon. Nov. 26, 2012
Aruba Networks has been a staple company in wireless LAN since at least its 2007 IPO, but it's taken the vendor years to convince partners it was truly serious about the channel. A history of channel conflict and treating solution providers, as one partner put it, as an "option" for closing deals made for tough sledding in the program on several fronts.
But no longer. As Aruba targets $1 billion on the back of an expanded purview beyond its wireless LAN stronghold -- it's about halfway there now, having reported $517 million in revenue for its fiscal 2012, a climb from $178 million as recently as four years earlier -- it's earned the respect of national channel partners who see it as a compelling alternative to Cisco and as having enabled the channel behind the explosive BYOD trend.
Aruba observers interviewed by CRN over a three-month period said it's also hitting that stride at just the right time, having shored up the No. 2 spot behind Cisco in the wireless LAN market years ago and advancing in areas adjacently important to wireless, such as distributed networking, cloud management and mobile security.
With wireless once again a hot topic thanks to recent events such as Ruckus' IPO and Cisco's $1.2 billion acquisition of Meraki, analysts and solution providers alike agree that Aruba stands to make some of the segment's biggest gains in the coming years -- if its channel story stays consistent and it continues to outgun smaller players attempting to chomp at its market share.
"This is a market for the brave, and Aruba has put almost all of their wood behind the BYOD arrow," said Zeus Kerravala, founder and principal at ZK Research. "What I like to think Aruba does is address the post-MDM [mobile device management] problem, in that once you put MDM in and on-board a bunch of devices, then what do you do with unpredictable traffic patterns, location information and other significant challenges."
Aruba's made great use of tuck-in acquisitions such as Amigopod and Avenda, Kerravala said -- technology from which it turned into products such as the Aruba ClearPass access management and mobile device security system.
"That really is the right type of solution for the industry today," Kerravala said. "That's very granular access control -- good security -- so that says a lot about why Aruba has been winning deals. You can build out the wireless network with them for pure connectivity but you also get the security and management."
"Aruba grew up as wireless LAN, but if you look at IT organizations over the last few years, there's not a flush of new resources being put into IT," said Ben Gibson, Aruba's chief marketing officer, in a recent interview with CRN. "There's increasing demand for IT to broaden its specialties. People focused on network management also now have to be up on network architectures and how to mobilize, and also what the security framework is when you have people going from one laptop to two or three different devices. That all changed in the span of just a few years."
Aruba's channel story seems finally to be aligning with its product story. Andy Welsh, director of partner alliances for Accuvant, a Denver-based integrator and top Aruba partner, said Aruba has made channel partnership a priority for its global sales force and that its channel leaders are pushing through more and better programs that provide partners more resources and more profitable returns.
Feedback during Aruba's most recent partner advisory council meeting, held earlier in November, was uniformly positive, Welsh said.
"They've really changed to a channel-centric model instead of this sense of 'channel by convenience,' " Welsh told CRN. "We've always enjoyed the relationship and been a strong partner, but coming out of this last meeting that sense is much greater than from the last two or three."
"Aruba's appeal is that their products just work," said Joe Ambrosole, president of NetConnect, a Staten Island, N.Y.-based solution provider. "It goes in easy, it's price-competitive and it beats any other vendor in that space. They are a good company and they've come up big on the support."
NEXT: Aruba's Three-Year Channel Reboot
In August, Bob Bruce departed as Aruba's channel chief and was succeeded by Jim Harold as vice president of channel sales.
Partners agreed that Bruce, who became Aruba's channel chief in December 2009 after a three-decade channel career spent in bigger roles at Cisco, Juniper and 3Com, brought a lot of added visibility to Aruba's channel even if he didn't always seem to have the buy-in from Aruba's executive team.
Several pointed to a seminal fall 2010 update of Aruba's then-three-year-old PartnerEdge program that boosted deal registration and provided better rewards for higher-tiered Aruba partners. Bruce left the Aruba channel in better shape than he found it, they said, and now Harold, also a practiced channel hand with experience leading channel organizations at Enterasys, NetApp and Blue Coat Systems among others, has hit the ground running.
During the Aruba partner advisory council meeting, Harold told partners that Aruba had further changed a lot of its sales rep compensation to encourage not only partnering, but also deeper solution provider involvement at all ends of the Aruba deal-making spectrum.
"In the past it had really been more of a position of theirs to take deals direct, and if the channel had a hand in something at the end, great," Accuvant's Welsh said. "That culture has changed. The compensation promotes services, as well as shows Aruba willing to pay their reps more for taking deals with partners and shifting away from smaller transactions. They want to push more of the midmarket to resellers and they're also saying they're going to take some commission away from reps if they deal directly. They want their reps focused more upstream and want to let the partners do their part is what I'm hearing."
At the same time, Aruba is directing more channel resources to services-centric deals and awarding more points of margin to managed services-focused partners that can build infrastructure and package solutions with wireless LAN, security and MDM in mind.
"We look at Aruba as a top strategic partner," said James Marsh, senior vice president at Carousel Industries, an Exeter, R.I.-based solution provider. "That's a bright future over there. What we hear is that they're trying to come up with programs that will benefit larger partners and support folks better in bigger deals, so we're encouraged by that."
Added Welsh: "Jim's been doing this a long time. He gets the game, and he knows what motivates and demotivates partners. I think he's got the ear of Lou Serlenga [Aruba vice president, North America sales], and that they are looking at this as a team trying to double business, not just grow it by 10 [percent] or 15 percent."
Aruba's Harold said the big difference between Aruba's program and other wireless programs -- especially those from smaller competitors -- is that Aruba is pushing partners to build a professional services consultancy on top of BYOD integration, which is itself built upon the resale of wireless and security products.
"The professional services potential here is huge," Harold told CRN. "We're big on that as the growth engine of new opportunities and also of profit. Partners are taking BYOD and these other challenges and responding to them as practice areas. That's really taken off for Aruba in a short period."
"It's a special breed of partner: one that has to contend with a much broader, bigger, denser environment to deploy wireless effectively," Aruba's Gibson said. "And if wireless is first, security is second. It's not so much about just guarding what comes into the network. It's bi-directional now, and it's having a contextual way of having visibility and control and freedom. Partners can't just sell the point product anymore. This is a much more connect-the-dots kind of consultancy and we've seen partners build whole practices around BYOD."
NEXT: Aruba Measures Up In Tech
Aruba's technology purview has expanded, both organically and via a string of acquisitions -- AirWave in 2008, Azalea and Amigopod in 2010, Avenda in 2011 -- to include products and platforms such as ClearPass, which offers MDM and a range of additional features most MDM vendors don't provide, all on a single appliance.
Aruba's Harold said the recently introduced partner specialization for ClearPass has taken off in the channel, in part due to partners that now have an Aruba product inroad into competitive wireless LAN deployments.
"The nice thing is that they're seeing opportunities to manage both Aruba and non-Aruba environments with this," he explained.
Other recent, successful launches included Instant, which offers virtualized Aruba Mobility Controller functions on 802.11n access points; Instant Enterprise, which moves controller functions to the access points themselves and includes features such as voice and video optimization; and Activate, which boosts the ability to manage large-scale, distributed Wi-Fi environments.
Products such as Instant Enterprise would have been a surprise for the Aruba of even a few years ago, Aruba partners said.
"What's come into the wireless space is almost this holy war of controller vs. controller-less," Accuvant's Welsh said. "Aruba was always historically inclined toward the controller as the way to go, and they dismissed the other guys as ankle-biters. But they saw the success some of those guys were having in K-12 and other spaces, and I think they responded with the Instant platform and other things they've done."
It's made Aruba a more versatile vendor, Welsh said.
"Controller-less technology does have some viability -- some wings to fly on. So I think Aruba's made a statement that I can do both, and do both with stronger security measures than the other guys," he said. "They're not just targeting wireless LAN enterprise. Now it's a much bigger story and much more attractive in more of the market."
On top of those product launches, Aruba's MOVE, or Mobile Virtual Enterprise architecture, has been a successful framework for delivering cloud and mobility solutions using various Aruba products and leveraging concepts such as context-aware networking. It's also built a strong network of strategic vendor allies, including the more than 80 partners in its ArubaEdge Partner Program and the much smaller number of ArubaEdge Solution Partners that submit to in-depth interoperability testing with Aruba wares.
Taken all together, Aruba has a formidable strategy for addressing the explosion of corporate mobile devices and the BYOD challenge faced by most businesses. ZK Research's Kerravala said 82 percent of companies that would logically represent Aruba customers have some kind of BYOD plan, according to the research firm's most recent estimates.
"That's a very big TAM [total addressable market] to go after for Aruba, especially when you look at the overall competitive landscape," he said. "Cisco doesn't sell a whole lot of wireless outside its base, Motorola tends to only win inside [former] Symbol accounts, and then you have a bunch of little guys with interesting solutions that a lot of mainstream enterprises don't want to take a chance on. Aruba has a viable game here, with good timing, and they're continuing to close the gaps they had in product."
The product strength has added oomph to Aruba's earnings. For Aruba's fiscal first quarter, reported Nov. 15, it posted revenue of $144.5 million -- a 21 percent increase over the year-earlier quarter -- though with a GAAP loss of $800,000, wider than the $500,000 it had in the first quarter of the previous year. Orr and other executives highlighted key Aruba product launches as well as its 14th straight quarter of record revenue and strengthening presence in key vertical markets.
The result is that more Wall Street tech stock analysts have taken note.
"We believe the company sits between the 802.11n product cycle of '09-'11 and the Bring Your Own Device-driven 802.11ac upgrade cycle starting late '13," wrote Ehud Gelblum, managing director for Morgan Stanley, in a mid-November research note. "However, we believe that Aruba's products are best in class and we expect Aruba to increase its position of strength in core enterprise accounts. The new breed of vendors pursuing SMBs, K-12s and service providers is unlikely to constitute a threat to Aruba in the enterprise."
That kind of increased visibility will only help its channel progress, partners agreed.
"Six or seven years ago, they had to work on their brand," said NetConnect's Ambrosole. "But I don't have to sell the company anymore. People know who they are and they have that presence."
Aruba's position is that the profit behind the BYOD opportunity is there for partners willing to seize it, Aruba's Gibson said.
"The Apple Genius Bar can't be the answer for every BYOD thing," he said. "So it's about how do you enable that. BYOD begs for a great professional serves offering -- a truly consultative offering."
PUBLISHED NOV. 26, 2012