Cisco's entry likely to drive wireless LAN market

Cisco Systems' acquisition of wireless LAN (local area network) vendor Aironet Wireless Communications, announced earlier this month, may change the face of the market by putting enterprises' and home users' data on the air.

Comments made on Tuesday by a Cisco official indicated that the vendor will leverage its wealth of network technology to make wireless LANs more robust, an advancement that will be critical as mainstream companies adopt them.

Earlier this month, Cisco announced it intends to buy Aironet for approximately $US799 million. Aironet has been a pioneer in the wireless LAN market and is already shipping equipment that can provide 11M-bits-per-second (bps) throughput.

Industry observers said the boost in throughput, made widely available by the recent approval of an IEEE standard, is helping wireless LANs to evolve from tools for specialised applications into a viable solution for enterprises in general. Other factors include the increasing mobility of workers and the prospect of IP (Internet Protocol) phones that can use a LAN infrastructure for voice calls.

Large enterprises increasingly are looking to wireless LANs -- often as adjuncts to wired LANs -- to enable their employees to use Internet and corporate resources while in meetings or at a corporate site away from their offices, analysts said.

"I don't ever think you'll see wireless LAN taking over for wired, but you'll be able to fill in a lot of gaps in your connectivity just by using wireless LANs," said Patrick Paczowski, an analyst at Current Analysis, in Sterling, Virginia. "You can hook people up who otherwise would have to work separately," he added.

Cisco, the dominant LAN switch supplier to large enterprises, is likely to hit the ground running and help to drive the mainstream market for wireless, analysts said.

"Cisco has certainly been one of the key movers and shakers for networking, so their acquisition of Aironet will bring a lot of credibility to the wireless LAN market," said Kneko Burney, an analyst at Cahners In-Stat Group, in Scottsdale, Arizona.

Cisco also intends to use its resources to enrich the technology.

Larry Birenbaum, vice president of Cisco's desktop switching business unit, said today that vendors need to address security, network management and quality-of-service guarantees in order to make wireless fit the bill in homes and enterprises.

The company is examining ways to bring Cisco's policy-based networking system to bear on wireless LANs, in which users share the bandwidth of the nearest access point and may send critical information into the open air.

Birenbaum said that although encryption capability is built into the IEEE 802.11 standard, full security demands a secure way of distributing encryption keys.

Cisco also believes wireless LANs can help enterprises take advantage of the convergence of voice and data, letting employees roam around a facility and make calls on the same phone from any desk, Birenbaum said. That would require a way to prioritise voice traffic above other types to prevent packet delays that can ruin calls, he added.

"We look forward to extending those capabilities to the wireless domain, and that's where quality of service will come into play," Birenbaum said.

Observers said a critical challenge for Cisco will be piercing the small business and home markets, where rivals -- most significantly, 3Com Corp. -- are expected to make strong plays.

According to Birenbaum, Cisco has built strong channels to address these markets and may use a new channel to reach home users: their broadband service providers.

For example, DSL (digital subscriber line) modems with built-in small wireless hubs, which Birenbaum expects to see on the market soon, could be sold or leased to end-users in conjunction with a service-provider contract, he said.

Although Aironet will become part of Cisco's desktop switching unit, Birenbaum said the company expects a broad set of applications for the technology.

"Wireless has had tremendous success in business, and it will also have an undeniable role in the consumer and home markets," Birenbaum said.

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