Aruba Networks wants to turn your business into a wireless paradise. The company offers network access equipment and software for mobile enterprise networks. Its Mobile Virtual Enterprise (MOVE) architecture unifies access between wired and wireless network infrastructures for employees both at and away from the office. Products include controllers, access points, and concentrators, as well as operating system and management software. Aruba also provides professional and support services. It targets the corporate, education, and government sectors. Aruba outsources most manufacturing to partners such as Flextronics and Sercomm. The US is the company's largest market. Aruba agreed to be bought by Hewlett-Packard in March 2015.
Change in Company Type
After 13 years as an independent company, Aruba agreed to be bought by Hewlett-Packard for about $3 billion. The deal was announced in March 2015 and was expected to close by the end of the year. Aruba's wireless products should complement and extend HP's networking product line as more wireless connections are sought for more locations from places like hotels to parts of cities or entire cities.
Aruba saw strong year-over-year growth in all its geographic segments. The US accounts for about 65% of sales, with the Asia-Pacific and EMEA regions each contributing 15%.
Sales and Marketing
The company sells its products directly, as well as through distributors, resellers, and OEMs. More than 90% of sales come from these channel partners, including ScanSource (more than 20% of sales), Synnex Corp. (13%), and Alcatel-Lucent.
The company's marketing activities include lead generation, telesales, advertising, website operations, and direct marketing, as well as public relations and trade show activities.
Aruba has enjoyed four years of unprecedented revenue growth while also posting three straight years of net losses. Revenues climbed 22% from $600 million in 2013 to a record-setting $729 million in 2014. Its net losses have primarily stemmed from high operating expenses each year.
The historic revenue growth for 2014 was driven by a 25% surge in sales in each region of the US and EMEA. Aruba was also helped by the expansion of its customer base coupled with incremental purchases from existing customers as a result of ongoing strength in the enterprise mobility market.
Aruba's cash flow in operating activities followed an upward trend from 2010 till 2013; however, in 2014 cash provided by operating activities decreased by $41 million compared to 2013 which was primarily due to a decrease of $51 million from changes in operating assets and liabilities throughout the year.
After posting three straight years of net losses, Aruba's strategy is centered around cutting costs and streamlining its operations. During 2014 it intends to restructure by realigning its workforce to better reflect its business operations and reduce its workforce by about 4%, or about 70 positions. It also plans to relocate approximately 4% of its current workforce from facilities in Sunnyvale, California, to facilities in Portland, Oregon; Bangalore, India; and Cork, Ireland.
Mergers and Acquisitions
Aruba often utilizes strategic acquisitions to achieve revenue growth and enhance its mobile infrastructure. In 2013 it obtained Meridian Apps, a privately held mobile software company providing software for visitor engagement through targeted location-based messaging, for nearly $17 million.