Meru Networks

» see merunetworks.com as it lived, on the wayback machine

~ the obit ~

Normal enterprise wifi works like a cellular network. You scatter access points around a building, you give neighboring ones different channels so they do not shout over each other, and when a laptop walks down a corridor it notices the signal fading, finds the next access point and reassociates. Meru Networks sold the opposite. Every access point on one channel, presenting what looked to the client like a single enormous radio, and the decision about which one actually talked to your laptop made by the infrastructure instead of by the laptop. They called it Virtual Cell. The client never roamed because, as far as it could tell, there was nowhere to roam to.

Meru's own annual report made the case in the dry language these filings use: the conventional micro-cell design creates "a complex optimization problem" of covering a building without letting same-channel access points overlap, and Virtual Cell "takes a fundamentally different approach by pooling all access points together on the same channel". The claimed payoff was fewer access points and a faster deployment. Meru was incorporated in Delaware in January 2002 and began commercial shipments in December 2003, so almost two years went into the argument before anyone could buy it.

The customers it found had hard buildings and moving people. Healthcare and education were the markets it targeted first, which is to say wards and lecture halls. By the end of 2010 it had about 4,400 customers across 55 countries and 292 employees, and 88 percent of its revenue came through resellers and distributors rather than from its own salespeople.

~ the rap sheet ~

~ the ipo ~

Meru went public on Nasdaq under MERU on 31 March 2010, priced at $15.00 a share, the top of its $13 to $15 range. Revenue that year rose 22.3 percent to $85.0 million from $69.5 million in 2009, which looks healthy until you read the sentence the filing is required to include: "We have incurred significant losses since our inception." There is no profitable year to point at anywhere in its history.

Selling a clever architecture into an enterprise market breaks this way. Cisco and Aruba never had to win the technical argument, because they already had the resellers and the people in the room when a campus decided to buy. Meru had an unusual answer to a question most buyers were not asking in the first place.

~ the day it died ~

Fortinet signed a merger agreement with Meru on 27 May 2015, with a Delaware vehicle named Malbrouck Acquisition Corp. to do the buying. The cash tender offer opened on 9 June at $1.63 a share and ran until the end of 7 July. 14,835,691 shares came in, about 60.18 percent of those outstanding, with another 102,563 promised by guaranteed delivery. On 8 July 2015 Malbrouck merged into Meru under section 251(h) of Delaware law, Meru survived as a wholly owned Fortinet subsidiary, and Nasdaq filed to delist the stock the same day.

$15.00 in March 2010 to $1.63 in July 2015 is a fall of about 89 percent, and the total consideration came to somewhere between $41.8 million on Fortinet's own pro forma numbers and the $44 million the trade press reported. Either way it is less than the company raised at its own listing.

~ what happened to the gear ~

Fortinet had its own access points, the FortiAP line, and that is where Meru customers were eventually pointed. Nothing on Fortinet's site today sells anything called Meru. What is left is a trail of end-of-support records, most of them now kept by third-party lifecycle trackers rather than by Fortinet: the AP332i going out of support in October 2020 and the virtual controller in August 2022. The last of those dates to fall was the AP1020, in July 2023. Meru had been gone eight years by then.

My own working years cover this whole period, which makes for an odd kind of distance. The era is right, the category is right, and I still never touched a Meru box, because nobody who uses enterprise wifi chooses the vendor. Somebody in a facilities meeting does, once, for a building you happen to work in, and you spend five years connecting to an SSID without ever learning whose radios are in the ceiling.

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