Fortinet Dives Deep Into Enterprise Secure Wireless Market With Meru Networks Acquisition

Fortinet is blasting into the enterprise secure wireless market with its revelation Wednesday of its intent to acquire Meru Networks, a move that pits the vendor against Cisco and other major networking players looking to make strides in the security space.

Meru Networks is a $90.9 million company based in Sunnyvale, Calif., that competes against companies such as Ruckus Wireless and Aerohive with its intelligent 802.11ac Wi-Fi solutions. Terms of the acquisition agreement are $1.63 per share in cash, or around $44 million.

While Fortinet has experienced some challenges to penetrating the market, the acquisition will launch the network security vendor full force into the enterprise wireless space with a new enterprise install base and wireless technology, Joe Sykora, vice president of Americas sales, said in an interview with CRN.

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"Right now, we've dominated the enterprise on the security side and we've had some things we've needed to penetrate that enterprise wireless market," Sykora said. "[The Meru acquisition] will give us the technology and tools we and our partners need to succeed in this market."

Sykora said that capability is key for Fortinet partners, who are looking to add layers of security to enterprise clients, particularly around BYOD. To that end, Fortinet also announced the launch of a new FortiGuard Mobile Security subscription service in tandem with the acquisition.

"It's just a great time to add this for our partners," Sykora said. "It will complete that solution set that they've been asking for."

The acquisition is the latest example of consolidation in the wireless market, most notably after HP's March acquisition of Aruba Networks.

Meru investors began pushing the vendor for a sale last May, saying it couldn't compete against its competitors with its "hopelessly subscale" solution.

By expanding its penetration into the enterprise wireless market, Fortinet is setting itself up for even stiffer competition against Cisco and other networking heavyweights making market strides in security. However, Sykora said, he believes the Meru acquisition will position Fortinet well to win over established competitors in the enterprise secure wireless market.

"The solution is unique -- we're doing secure wireless. We're not just doing wireless as an extension of the network. The wireless security layer is not present in the market today," Sykora said. "Is it a competitive market? Yes. ... I'm sure we'll be going head to head with everybody. ... [The Meru acquisition] will give us a jump-start in some of those deals we haven't been able to get over the hump," he continued.

Fortinet partners agreed with Sykora, saying the acquisition and move into enterprise secure wireless was a "natural extension" for the vendor.

"I certainly don't have a crystal ball, but if they do as good in the wireless [space] as they've done in the core networking and firewall space, then I'm optimistic," said Jeremy MacBean, director of business development at Brampton, Ontario-based IT Weapons, a Fortinet partner.

MacBean said the acquisition of a wireless company is a "natural" and "really smart move" for Fortinet because it extends the reputation the vendor has built up in its core networking and firewall businesses.

"From a solution provider perspective, I think it's great," MacBean said. "For them now to bolt on wireless solution stuff is going to be really nice for us in the channel to be able to bundle and deliver solutions."

Investors were also positive on the move, with Meru stock jumping close to 16 percent, to $1.60 a share, and Fortinet rising 2 percent, to $39.57, when the news broke.