HP Buys Colubris - Maybe the Consolidation Really is Beginning

HP Procurve just announced that they are buying Colubris Networks, a company that's been around since the early days (2000) of enterprise-class WLANs. Colubris specializes in public-access applications, most notably in the hospitality industry, as well as the non-carpeted areas of the enterprise, but has a broad base of installations across many industries. They also have a contemporary, direct-forwarding architecture and a very visible profile in WLANs overall. HP is, well, HP, and let's face it, many forget that HP is also a major supplier of WLANs. They've not had the visibility that they deserve, and this move is at least partially designed to correct that. It's not clear how well the two product lines will mesh, or how a combined product line will be derived, but HP is capable, I'm sure, of putting together a winning product offering and they are regardless now a contender for membership in the top tier of WLAN companies.

Note that this move gives HP instant access to .11n, which they do not have in the current Procurve product line, as well as a valuable base of customers and channel partners. They also get a marketing team, led by industry veteran Tom Racca, with a focus on selling WLANs. And they will ultimately have a broader unified wired/wireless product line, which is going to be increasingly important in closing the big deals. It can be argued that the two firms really didn't overlap much in their respective market strategies, so, while I'll argue this is indication of a consolidation of the WLAN industry, it's still a pretty complementary deal with good benefits for both parties.

There are still too many players in the enterprise-class WLAN space, a remarkable number indeed considering the age of the industry overall, and with equity prices still low this is a good time for a consolidation to accelerate. Who's next? Even the smaller players have value, because they have customer bases and channels, and wireless LANs will continue to grow in importance. So I'd expect a few more deals over the next few months - if a consolidation is beginning, it's important to position oneself as soon as possible for membership in the big three or four firms that typically emerge from tech consolidations as the leaders. And, as it seems likely that Cisco will be one of these no matter what, time is most certainly of the essence here.

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