Cloud and wireless networking startup Aerohive this week launched a program through which customers can get two Aerohive access points for the price of one if they're replacing Meraki systems.
It's the first formal promotion announced by a wireless LAN competitor since Cisco said it would pay $1.2 billion to acquire Meraki, an Aerohive rival in the SMB segment. According to Aerohive executives, both solution providers and customers are nervous about whether the acquisition will disrupt Meraki's business, and how Cisco's plan to lead with Meraki's cloud-managed networking products in the midmarket will affect its current customers.
"A lot of folks who were looking at Meraki were primarily looking at it because it wasn't Cisco," Dean Hickman-Smith, Aerohive's senior vice president of sales, told CRN. "A number of people are already reconsidering their decision, so there's a great opportunity to displace the Meraki product for us. In addition, a number of partners who had signed up as Meraki partners who were also in the anything-but-Cisco community have also sensed that from a margin and control perspective, they're going to lose out as the Cisco-fication of that channel happens."
A recent flurry of activity in the wireless LAN market, including the Meraki acquisition and also Ruckus Wireless' recent IPO, has helped raise Aerohive's profile that much more.
Founded in 2006, the company sells 100 percent through the channel, and as of last quarter it had more than 5,000 customers. It's won raves for its "cooperative control architecture" and controller-less approach to wireless LAN, as well as the cloud management aspects of its solution it picked up through acquiring Pareto Networks in 2011.
Aerohive said in October it will hit an annualized sales run-rate of $100 million by the end of 2012, and it also recently took in a $22.5 million round of mezzanine equity financing. The company has continued to expand its industry partnerships, too, including Wednesday's announcement that it will collaborate with WAN provider iPass on managed network services opportunities.
Aerohive has also been building its channel ranks and expanding its executive team. Hickman-Smith was a recent hire, having joined the company in October from the same role at email security vendor Proofpoint. Aerohive also confirmed to CRN that Kurt Mills, most recently vice president of worldwide sales for Websense, has joined the company as vice president of channels. It's a newly-created position at Aerohive, and Rob Pollock, Aerohive's director of channel sales, now reports to Mills.
"He has the expertise of more than 15 years and he brings the ability to scale this thing to the next level," Hickman-Smith said of Mills. "We've got to make sure we continue to grow this channel, provide the programs needed and track the right metrics on the customer support side. Kurt will be spearheading our 2013-2014 channels strategy."
Aerohive is confident it can be immediately appealing to concerned Meraki customers and channel partners.
"Maybe you've invested 10 percent already in your Meraki deployment, so we've neutralized that impact by this two-for-one promotion," said Stephen Philip, vice president of corporate and product marketing. "It's not too late to look at alternatives."
"I think what you'll see is a similar situation to what happened with [Cisco acquiring] IronPort. Cisco's channel machine will ultimately take over, and partners will need to look at how to protect their longer-term business strategy," Hickman-Smith added. "Already a number of Meraki partners have communicated with us."
Rumors persist that Cisco looked at a number of different wireless and cloud management companies before closing on Meraki. Aerohive declined comment on whether it was a potential target, but referred CRN to a November blog post by Aerohive CEO David Flynn.
Wrote Flynn: "While we can't speak for Cisco, we can say that buying Aerohive would have given them a strong cloud management solution for the mid-market, but at the same time it would have been massively disruptive to Cisco's existing wireless business because our controller-less architecture, enterprise class feature set and private cloud management solutions compete directly with Cisco's existing products and would have led to major positioning problems. The Meraki decision is a logical one because it gives them cloud, without forcing them to confront the positioning challenge that an enterprise class controller-less solution would create when sold alongside their legacy controller-based solutions."
PUBLISHED DEC. 5, 2012