WLAN Switch… or Just “Switch”?

According to In-Stat, the enterprise WLAN equipment market is at an interesting crossroads. While Symbol and a variety of start-up vendors have pioneered an overlay “WLAN switch” architecture for centralized management of so-called “thin APs,” they are now being increasingly challenged in the market by large Ethernet switch vendors, such as Cisco, Extreme and Foundry, who have their own enterprise AP product lines and are now integrating WLAN switch functionality directly into their wired switching products. Sales of enterprise WLAN equipment have “historically” (that is over the last five or six years since it first gained significant traction) been much smaller in unit shipment size than the retailer/consumer WLAN equipment market. However, shipments to enterprise and SMB customers are growing strongly and look to continue to do so over the next five years. Drivers for this expected growth include: virtually all new business notebook PCs shipping with embedded WLAN NICs, greater acceptance of WLAN by corporate IT staffs as security issues are resolved, increasing insistence by employees on benefiting from the same wireless connectivity at work that many of them now do at home, and increasingly mobile workforces. WLAN switching technology was first introduced by Symbol in 2001, but did not start to gain market traction until 2003, when a number of start-ups (Legra, AirPath, Airespace, Chantry, Meru and Aruba) joined Symbol in introducing WLAN switch systems. Although shipments were negligible in 2003, the market showed strong growth in 2004. The shift from individually-managed, stand-alone “smart APs” to centrally-managed thin APs has been a result of customers trying to address the following problems with the traditional deployment model: RF site mapping and the increase in complexity of AP deployments as the number of APs deployed rises, individually managing more than 15 to 20 APs is an onerous demand on the IT staff, and dispersed AP management intelligence negatively impacts security, roaming and QoS. Despite gaining traction in 2004, the overlay WLAN switch vendors (whose systems are deployed over a customer’s existing wired LAN infrastructure) also faced consolidation pressures and, going forward, face an increasing challenge from LAN switch vendors who are integrating WLAN management functionality directly into their wired Ethernet switches. Legra and AirPath both went out of business in 2004 and Airespace was acquired by Cisco while Siemens acquired Chantry. Cisco’s purchase of Airespace, for $450 M, is an important validation of the WLAN switch market, but also signals the increasing trend toward wired/wireless switch integration. Other Ethernet switch vendors (who all have their own enterprise AP product lines) are following suit, either partnering with WLAN switch start-ups or introducing homegrown WLAN switch products. Merchant market silicon switch vendors seek to help wired switch vendors attack the WLAN switch market; Broadcom introduced the StrataXGS-III in January 2005, which integrates WLAN switch functionality purchased from Legra. In-Stat expects Broadcom’s competitor, Marvell, to likewise introduce such a product in the near future.