I've been saying it for months and months: It's been crystal clear to me that Cisco did not have an internal WLAN switch strategy, and has its biggest problems in dealing with issues that switches can solve, which is policy-based VLAN assignment for WLAN users across network segments. News.com reports that a deal may be in the work for Cisco to buy Airespace, which is the leading marketshare vendor among the startup switch makers with seven percent of the market. I've thought Airespace was a 100-percent Cisco target, and am just surprised its taken this long to hear about a deal firming up.
Cisco's intelligence is in the access point, which means that hand-offs are coordinated at the AP level, making VLAN roaming and other related issues pushed out to the edge or handled by Ethernet switches, which doesn't work very well for mobile users. Airespace handles the logical part of this in the switch: the AP is a radio with some intelligence, but it's not the smartest part of the network.
Cisco has obviated some of its shortcomings in this area--and, of course, it has massive strengths in other areas--by turning WLSE, its centralized management tool, into as much of a switch-like controller for signal strength and other factors as it can.
Update: Om Malik has more commentary on this issue, noting that Airespace may rack up (pun intended) a large deal to upgrade Microsoft's network, and that Juniper might also be interested in acquiring Airespace. It's like the late 1990s, except with actual customers and revenue.