The consolidation of the wireless industry is hurting channel partners' wallets as they struggle to find differentiation in the market and stay afloat with lower margins coming through the door, says Shane Buckley, CEO of the wireless networking vendor Xirrus.

With competitors Meru Networks and Aruba Networks taking the higher ground by being purchased by Fortinet and Hewlett-Packard, respectively, Buckley said wireless consolidation is a disadvantage to solution providers who must now work with larger vendors who don't specialize or focus on Wi-Fi.

Buckley, who previously held top executive roles at networking companies Netgear, 3Com and Rohati, is seeing new interest from Aruba, Meru and Aerohive Networks – who has a partnership with Dell –partners who are fearful of being left by the wayside.

How big a margin hit are Aruba and Meru channel partners going to take?

Partners are going to make a third to a quarter of what they use to make before.

Typical HP distributors, not unlike Cisco distributors, earn low single-digits margins on their products. We've typically seen Aruba valued-added distributors earn margins in the mid-teens.

HP customers tell us they made low-teens margin on HP switches and other HP products, while typically Aruba resellers made mid-twenties margins on Aruba products.

You've got some very loyal Meru partners who are now competing with a large security-based (small and midsize enterprise) channel in the US. Margins are going to be a big concern and challenge for channel partners, that's what they tell us.

Why would a Meru or Aruba partner see such a drop in margins?

Vendors in some cases struggle to provide appropriate margins to channels because when they get to a certain critical mass if they haven't managed their channel appropriately – which a lot of big vendors don't because it's like anyone can sign up, anyone can sell us -- then everyone competes against each other and the margins go through the floor.

Aruba built a very good channel, high margin for distribution and for the reseller channel and they were a very tough competitor for us as a company as well. After the acquisition announcement, that's totally changed. Now they're all ears because HP is obviously a low margin distribution, low margin reseller business -- a $120 billion company. HP Enterprise will be $60 billion while the Aruba piece will be only $800 million so that's a drop in the ocean, so it's not likely they're going to preserve all that channel margin.

That's what typically happens in bigger companies. If history is any judge, that concern is probably realistic for Meru and Aruba channel partners.