Aruba Networks gains amid Cisco's pain
Aruba Networks delivered a strong fiscal first quarter as it landed more deployments for 802.11ac Wi-Fi networks in the enterprise at Cisco's expense.
The wireless local area networking provider reported a first quarter loss of $800,000, or a penny a share, on revenue of $160.9 million, up 11 percent from a year ago. On a non-GAAP basis, Aruba reported first quarter earnings of 16 cents a share.
Wall Street was looking for earnings of 14 cents a share in the first quarter on revenue of $157.6 million.
For the second quarter, Aruba projected revenue between $165 million and $169 million with non-GAAP earnings of 16 cents a share to 17 cents a share. Wall Street was looking for warnings of 16 cents a share on revenue of $166 million.
Aruba's results highlight how smaller more focused rivals are nibbling at Cisco, a networking juggernaut that stumbled in its most recent quarter. Analysts say Cisco lost share to Aruba in the quarter and Juniper for edge routers.
When asked about Aruba's quarter and Cisco, CEO Dominic Orr didn't hold back:
We basically still focus on the four areas that we are strong we highlighted, which is 11ac, ClearPass, Aruba Instant, complemented now by cloud-based management and public-facing enterprise with Meridian. So as regarding to 11ac, we did see a good win rate. And that is partially, I think, due to our largest competitors' inconsistent architectural elements that are not compatible to build out a true 11ac solution when customers really need to get it up and running and to facilitate either to transition to the new all-wireless office, or nearly all-wireless office, the rightsizing the edge of unified communications in mobile devices.
Orr also said that he was confident in Aruba's pipeline and ability to close future deals. He also noted that Cisco is frequently resorting to "solution-level pricing," or bundles with other gear.
In a nutshell, Aruba is banking that enterprises will scramble to deploy 802.11ac networks in 2014 as new devices it the market enabled with the Wi-Fi standard.
"Over the Christmas period and next January at CES in Las Vegas, there will be a flood of AC-enabled mobile devices hitting the market. So we believe -- we typically see no more than a 45-, 60-day lag time just in the BYOD environment before this flood of consumer devices starts hitting some of the enterprises," said Orr.