Hewlett Packard Enterprise's Aruba Leverages High-End Wi-Fi Infrastructure To Enter The Asset Tracking Market

| About: Hewlett Packard (HPE)
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Summary

Aruba is entering the asset tracking industry, one of the first multinational companies in an industry dominated by smaller start-ups companies.

Aruba's solution leverages its installed base of high-end Wi-Fi networks, reducing or eliminating the need for new infrastructure for asset tracking.

This offering complements their Meridian software for smartphone-based indoor location apps.

Aruba, a Hewlett Packard Enterprise (NYSE:HPE) company, announced today their new solution for indoor asset tracking. This solution enables small tags to be attached to assets, which are then tracked as they move around a site. Aruba is marketing their solution most strongly in the retail and healthcare industries, in which asset tracking brings particularly a strong return on investment.

Most asset tracking solutions on the market are produced by small companies. These solutions involve installing "locators" around a site, which track the locations of "tags" that are attached to physical assets such as equipment, carts and other movable items. The cost and effort of such systems are often dominated by the infrastructure that must be installed and configured.

Aruba's unique proposition is that their asset tracking can use already deployed Wi-Fi access points. Aruba is one of the top high-end Wi-Fi network providers, along with Cisco (NASDAQ:CSCO), Extreme Networks (NASDAQ:EXTR) and Ruckus Wireless (NYSE:RKUS). The ability of Aruba's asset tracking solution to leverage their existing Wi-Fi networks means that many enterprise sites will not need to install new infrastructure for asset tracking.

Interestingly, while their Wi-Fi networks are used for asset tracking, the asset tracking does not use Wi-Fi. Rather, most of their Wi-Fi access points have been delivered in recent years with Bluetooth Low Energy (known as BLE) capabilities, which can be enabled by software update. Wi-Fi is still used for Aruba's smartphone-based indoor location applications.

One of the challenges faced by existing indoor location systems that attempt to leverage Wi-Fi infrastructure is that Wi-Fi access points tend to be installed 80-100 feet apart, which is sufficient for Wi-Fi access but does not give enough overlap to support good indoor location positioning. But when I asked Aruba about this, they said that in recent years their enterprise customers have installed Wi-Fi access points more densely, generally 50ft apart, in order to support voice and video services on mobile devices. In addition to supporting voice and video, this density provides better location positioning.

Aruba's asset tracking solution delivers what they call "several second latency and several meter accuracy." This means that doctors looking for an emergency medical device or store owners looking for repair equipment can have the assets localized to within a few meters, with locations updated every few seconds. While this is not as accurate or instantaneous as other technologies, such as Ultra-Wideband, Aruba believes that it will be sufficient for many industries, especially as the Aruba solution reduces the infrastructure requirements significantly. For those customers that want higher performance, Aruba is partnering with other vendors whose technologies can be integrated with Aruba's solution.

The indoor location industry has over 200 vendors, many of which are focusing on asset tracking. But the industry has grown slower than many have expected, with many trials and limited deployments not crossing the chasm into full commercial deployments. I believe that Aruba's entry into the industry will propel it forward, with the power of HPE's size and the benefit of Aruba's strong install base. This will strengthen the entire industry, pushing forward solutions from smaller companies as well.

Interestingly, Aruba's announcement is the latest in a recent series of announcements from major companies in the indoor location market. Google (NASDAQ:GOOG) (NASDAQ:GOOGL) announced two weeks ago a new technology for camera-based localization of smartphones, and Apple (NASDAQ:AAPL) announced today new indoor localization for Apple Maps.

Keep an eye on Aruba's indoor asset tracking to move forward the asset tracking industry, differentiate Aruba from the other high-end network makers, and complement Aruba's smartphone-based indoor location solution.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.