1/18/2005 -- Cisco Systems Inc. last week notched its second acquisition of the last 30 days, picking up privately held Airespace Inc., a San Jose, Calif.-based provider of WLAN technology solutions.

Airespace specializes in developing secure and cost-effective WLAN products for enterprise and commercial customers. The company designs and markets WLAN controllers, access points, WLAN management and location software, and security capabilities, including IDS features. Cisco officials say that Airespace's product portfolio will help enhance the company’s own WLAN product offerings.

The Airespace acquisition is among Cisco’s priciest in recent memory. After all, the networking giant typically ponied up tens of millions of dollars for the acquisitions it made in 2004. In this case, however, Cisco has agreed to pay approximately $450 million in stock and assumed options for Airespace.

Cisco officials say it’s worth it, however. "As part of our global systems approach to networking, we continually look for complementary technology that offers new value to our customers. Airespace is a strong technological and cultural fit with an outstanding team," said Luca Cafiero, a senior vice president with Cisco’s Switching and Wireless Technology Group, in a statement. "Cisco and Airespace are both committed to helping our customers take advantage of the productivity benefits of seamless mobility and computing by accelerating the adoption of intelligent, adaptive WLAN infrastructure."

Cisco’s move coincides with the increasing business criticality of WLAN solutions, which analysts say are poised to explode in 2005. Analysts with market research specialist In-Stat/MDR, for example, say that WLANs are becoming more pervasive and more integral to the day-to-day operations of business customers. Even though they’re still viewed as overlays to conventional (wired) LANs, many organizations plan to expose their WLANs to a larger percentage of their employees.

In this respect, Cisco says that Airenet’s proven team of WLAN experts will help it to accelerate the time to market for new WLAN products. Airespace's products feature capabilities like wireless IDS, a broad standards-based WLAN security portfolio, and reduced operational complexity.

In the near term, Cisco has pledged to support both the existing Cisco Structured Wireless-Aware Network framework (SWAN) and Airespace product lines.

Analysts are generally positive on the move. Writing in a Forrester Research Quick Take bulletin, for example, analyst Ellen Daley suggested that the acquisition could be good for potentially risk-averse adopters, thanks to Cisco’s stability and market presence. More to the point, she argues, Cisco has fired a shot across the bows of several competitors, including WLAN switching startups like Aruba Wireless Networks and Trapeze Networks, along with Nortel Networks and Alcatel, both of which are Airespace OEM partners. -Stephen Swoyer