I do wonder, though, why Cisco has not yet picked off Aruba, especially since Aruba has opted to not drop its prices. It would make sense for Cisco to acquire Aruba's best-of-class WiFi assets while also capitalizing on Aruba's strong margins. At that point, Cisco wouldn't need to sacrifice its own margins with aggressive discounting. With Aruba's stock trading at such depressed levels this is a situation that bears watching.
I'm not advising diving in head first in Aruba. But I believe there is considerable amount of value to be had -- despite the competitive pressures. In the meantime, though, there is urgency for Aruba's management to differentiate the business. And I think a focus on security and/or a combination of security and software will add tremendous long-term value while the WLAN market recovers.
At the time of publication, the author held no position in any of the stocks mentioned.