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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
 Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    July 31,
    2009o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number:
    001-33347
 Aruba Networks, Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

02-0579097(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)  1344 Crossman Ave.
    Sunnyvale, California
    94089-1113(408) 227-4500 (Address, including zip
    code, and telephone number,
    including area code, of registrants principal executive
    offices)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Exchange on Which RegisteredCommon Stock, par value $0.0001 per share

The NASDAQ Stock Market LLC
    (NASDAQ Global Market)   Securities
    registered pursuant to 12(g) of the Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


4Item 1A.


Risk Factors


14Item 1B.


Unresolved Staff Comments


28Item 2.


Properties


28Item 3.


Legal Proceedings


28Item 4.


Submission of Matters to a Vote of Security
    Holders


28PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


29Item 6.


Selected Consolidated Financial Data


31Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


32Item 8.


Consolidated Financial Statements and
    Supplementary Data


51Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


83Item 9A.


Controls and Procedures


83Item 9B.


Other Information


83PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


83Item 11.


Executive Compensation


83Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


84Item 13.


Certain Relationships and Related Transactions
    and Director Independence


84Item 14.


Principal Accountant Fees and Services


84PART IVItem 15.


Exhibits and Financial Statement Schedule


84Signatures


85Index to Exhibits


86EX-10.7EX-10.10EX-10.12EX-10.15EX-10.17EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1   2




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PART I  In addition to historical information, this report contains
    forward-looking statements within the meaning of
    Section 27A of the Securities Act of 1933 and
    Section 21E of the Securities Exchange Act of 1934. These
    statements include, among other things, statements concerning
    our expectations:
  
    that revenues from our indirect channels will continue to
    constitute a significant majority of our future revenues;
    that competition will intensify in the future as other
    companies introduce new products in the same markets we
    serve or intend to enter;
    that we will continue to realize increased operating
    efficiencies by growing our offshore operations and establishing
    additional offshore capabilities for certain general and
    administrative functions;
    that international revenues will increase in absolute dollars
    compared to fiscal 2009 and remain consistent as a percentage of
    total revenues in future periods;
    that, as our customer base grows over time, the proportion of
    our revenues represented by support revenues will increase;
    that we will strategically hire employees throughout the
    company;
    that we will continue to invest significantly in our research
    and development efforts;
    that research and development expenses for fiscal 2010 will
    increase on an absolute dollar basis and remain consistent or
    decrease as a percentage of revenue compared with fiscal
    2009;
    that we will continue to incur operating losses in the future
    as a result of the expenses associated with the continued
    development and expansion of our business, including
    expenditures to hire additional personnel relating to sales and
    marketing and technology development;
    that we will continue to invest strategically in our sales
    and marketing efforts;
    that sales and marketing expenses for fiscal 2010 will
    continue to be our most significant operating expense and will
    increase on an absolute dollar basis and decrease as a
    percentage of revenue compared with fiscal 2009;
    that we will incur significant additional legal costs related
    to defending ourselves against claims made by outside
    parties;
    that general and administrative expenses for fiscal 2010 will
    increase on an absolute dollar basis and remain consistent or
    decrease as a percentage of revenue compared with fiscal
    2009;
    that ratable product and related professional services and
    support revenues will decrease in absolute dollars and as a
    percentage of total revenues in future periods;
    that, as we expand internationally, we plan to continue to
    hire additional technical support personnel to support our
    growing international customer base; and
    regarding the sufficiency of our existing cash, cash
    equivalents, short-term investments and cash generated from
    operations,  as well as other statements regarding our future operations,
    financial condition and prospects and business strategies. These
    forward-looking statements are subject to certain risks and
    uncertainties that could cause our actual results to differ
    materially from those reflected in the forward-looking
    statements. Factors that could cause or contribute to such
    differences include, but are not limited to, those discussed in
    this report, and in particular, the risks discussed under the
    heading Risk Factors in Part I, Item 1A of
    this report and those discussed in other documents we file with
    the Securities and Exchange Commission. We undertake no
    obligation to revise or publicly release the results of any
    revision to these forward-looking statements. Given these risks
    and uncertainties, readers are cautioned not to place undue
    reliance on such forward-looking statements.
 3




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ITEM 1.
    BUSINESS  Overview
    Alcatel-Lucent, year-over-year
       4




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Industry
    Background
   5




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
    Enabling both security and mobility  Radio
    waves cannot be confined within a buildings walls,
    challenging traditional wired network physical security models
    that depend on an impenetrable perimeter. To enable mobility,
    network access privileges and permissions must be clearly
    defined on a per-user basis to enable secure access and the
    reliable delivery of data, voice, video, and other applications
    to mobile users. Unauthorized wireless devices that could
    potentially circumvent network security must be detected and
    prevented.
    Delivering applications in a mobile
    environment  Many applications that are intended
    to be delivered over a fixed network may perform
    sub-optimally
    in a mobile environment without additional processing. This is
    especially true for mission-critical data and latency-sensitive
    voice and video applications. Enabling a network to recognize
    and adapt to an application  so-called
    application awareness  allows data, voice
    and video to be delivered more reliably, enhancing the
    performance and utility of the application.
    System integration  Enterprise-class mobility
    solutions require more than just wireless access. Security,
    application, network, and radio frequency (RF)
    management services are also necessary, potentially increasing
    the complexity of a system as it grows in size and scope. To be
    effective, a mobility solution must minimize deployment and
    integration complexity, and support massive scalability, without
    requiring expensive upgrades to existing networking
    infrastructure.
    Management  Network management is the heart of
    any secure mobility solution because it so profoundly affects
    ease-of-use
    and on-going operating costs associated with
    set-up,
    diagnostics, maintenance, and upgrades. Centralized management
    allows even the largest enterprise to be supported with minimal
    IT overhead, while support for multiple vendors allows legacy
    infrastructure to coexist with the newest technologies like
    high-speed 802.11n Wi-Fi.
    Support for emerging mobile applications 
    Secure mobility solutions need to be future-proof, ready to
    support emerging applications such as enterprise fixed mobile
    convergence (eFMC)
    cellular-to-Wi-Fi
    applications and location-based services such as asset tracking
    and inventory management.       6




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in-the-office
    
    Adaptive Wireless  Our adaptive 802.11a/b/g/n
    wireless LANs enhance productivity and collaboration by
    delivering high performance wireless data, voice, and video
    connections even in dense deployments and noisy RF environments.
    Our solutions scale for campus applications yet remain
    cost-effective for branch deployments. They can be used both
    indoors and outdoors, and support secure enterprise mesh for
    completely wireless networking.
    Identity-Based Security  Our solutions enable
    IT departments to deliver authentication, encryption, and access
    control services to all users using a single integrated,
    low-power appliance. Additional services, such as VPNs or access
    control firewalls, are not required, reducing IT overhead and
    expenses.
    Application Awareness  Our user-centric
    network is application-aware, and the network dynamically
    adjusts to improve the performance of data, voice, and video
    applications delivered in a mobile enterprise environment. IT
    managers can use our architecture to implement policies that
    prioritize and optimize services based on the specific user
    and/or the
    application being delivered.
    Vendor-Agnostic Network Management  Our
    AirWave Wireless Management Suite is a multi-vendor network
    management platform that provides business-critical insights
    into the operation of wireless networks made by some 25 vendors.
    Whether managing a single vendor network, or a multi-vendor
    legacy system in transition to 802.11n, the AirWave platform
    extends the life of existing infrastructure investments and
    lowers IT overhead associated with managing a dynamic network.
    Easy To Deploy, Easy To Use  We have designed
    our architecture as a non-disruptive overlay to existing
    enterprise networks, allowing quick deployment by leveraging
    existing infrastructure. Additionally, we have integrated all of
    the disparate elements of enterprise mobility 
    security, application, network and RF management
    services  into a single architecture, making it easy
    and less expensive for IT departments to deploy our solution
    together with existing networks and security infrastructure.
    Cost-Effective Scalability  We believe our
    architecture provides industry leading scalability through its
    ability to support up to 100,000 concurrent users from a single
    centralized point of control. In addition, our integrated
    solution reduces the amount and type of equipment required to
    enable mobility within a given location. As a result, our
    architecture enhances management efficiency and reduces
    equipment and personnel costs, allowing enterprise IT managers
    to scale enterprise mobility solutions in a cost-effective
    manner.
    Flexible Platform Supports Emerging
    Applications  Our mobility solution architecture
    combines the flexibility of modular software with
    high-performance, programmable hardware. This combination
    enables us to rapidly introduce new applications, such as
    enterprise fixed mobile convergence and location-based services
    to track users and assets.
    Remote Networking  Our Virtual Branch
    Networking solutions extend the benefits of centralized
    management and secure networking to branch offices, teleworkers,
    and road warriors. Simple to deploy, use and
    maintain  and with the option to use 3G cellular
    broadband connections  these remote networking
    solutions extend the enterprise network virtually anywhere .
    Network Rightsizing  Our Network Rightsizing
    initiative is designed to provide our customers with
    opportunities to realize cost savings and reduce their carbon
    footprint by balancing their wired and wireless LAN
    infrastructure to meet actual user demand. Rightsizing is a
    three-step process that involves assessing wired Ethernet LAN
    utilization, consolidating edge switches to meet actual usage,
    and expanding the wireless LAN to meet growing demand. We
    believe that cost savings can result from, among other things,
    fewer switch service contracts, lower electricity consumption,
    and reduced air conditioning loading. Our returns on investment
    calculators help predict the monetary and carbon savings
    opportunities based on company size and network configuration. 7




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Our
    Strategy
    
    Drive adoption across the enterprise  Many
    enterprises initially deploy our solutions at corporate
    headquarters or main campus locations. Our objective is to
    penetrate remote locations and gain adoption by mobile users
    across corporate, government or educational campuses, as well as
    in branch and home offices. We intend to do so by emphasizing
    the productivity enhancements and cost-efficiency of our
    approach. By rightsizing networking infrastructure 
    using wired networks only where absolutely necessary and 802.11n
    wireless LANs everywhere else. Using our
    cost-effective Virtual Branch Networking for remote sites, users
    can enhance mobility, obtain a uniform network experience, and
    lower both operating and capital expenditures.
    Maintain and extend our software offerings  We
    believe that the integrated encryption, authentication, and
    network access technology embedded in the ArubaOS operating
    system are key competitive differentiators. We intend to
    continue enhancing the ArubaOS operating system and our
    centralized mobility management architecture to maintain our
    position as a technology innovator. We also intend to extend the
    functionality and performance of the ArubaOS operating system
    with additional software modules such as
    video-over-IP
    and location-based services. Finally, we intend to continue
    enhancing the capabilities of our multi-vendor AirWave Wireless
    Management Suite to both support additional competitive products
    and enhance the underlying features of this market-leading
    platform.
    Utilize channel partners to expand our global market
    penetration  We intend to increase our market
    penetration and extend our geographic reach through the
    expansion of our network of channel partners. We plan to expand
    our growing channel footprint and will tailor training and
    support programs to help drive this expansion.
    Realize increased operating efficiencies We
    currently outsource our hardware manufacturing to overseas
    contract manufacturers such as Flextronics, and have established
    offshore research and development and customer support
    capabilities. We plan to continue to realize increased operating
    efficiencies by growing these offshore operations, and by
    establishing additional offshore capabilities for certain
    general and administrative functions.
    Expand our base of technology
    partners We will continue expanding our
    network of technology companies that enhance and complement our
    unified mobility solutions with security solutions, management
    tools, connectivity devices, and mobility applications.  Products
    ArubaOS
   8




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Additional
    Software Modules for ArubaOS
    
    Policy enforcement firewall  delivers user and
    group policy enforcement. Policies can be centrally defined and
    enforced on a per-user or per-group basis, following users as
    they move throughout the enterprise network.
    Wireless intrusion protection  identifies and
    protects against malicious attacks on wireless networks, as well
    as vulnerabilities caused by unauthorized access points and
    client devices.
    Remote Access Point  extends the enterprise
    network to roaming users, telecommuters, home/branch offices,
    construction trailers, and disaster recovery sites that have a
    wired or 3G backhaul Internet connection. Used in conjunction
    with any of our access points, this software allows seamless
    connectivity for remote users.
    External services interface  delivers a set of
    control and management interfaces to seamlessly integrate
    third-party network devices, incremental software modules, and
    services into user-centric networks.
    Secure Enterprise Mesh  allows our access
    points to connect wirelessly to other access points to provide
    LAN-to-LAN
    bridging, outdoor coverage without wires, or wireless offices
    and workspaces.
    xSec  provides wired and wireless Federal
    Information Processing Standard (FIPS)
    140-2
    validated encryption technology designed for high-security
    networks.
    Voice Services  delivers standards-based voice
    over Wi-Fi plus voice control and management innovations enabled
    by our application-aware architecture. Voice Services Module
    supports large-scale voice deployments and provides a foundation
    for fixed mobile convergence.  Aruba
    Multi-Service Mobility Controllers
      Wireless
    Access Points and Wired Access Concentrators
     9




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Virtual
    Branching Networking Solutions
    plug-and-play
  Management
    Analytics and Threat Prevention
    AirWave
    Wireless Management Suite
    side-by-side,
  best-in-class tm tm
 10




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Customers
    United States

EMEA

Asia Pacific and OtherCalifornia State University

BAA

NTT Data CorporationBoston Medical Center

Norwegian Ministry of Foreign Affairs

Samsung Medical CenterHess Corporation

Saudi Aramco

New South Wales DETMicrosoft

NCC Construction Sweden

Santos-Brasil SANavy Exchange Service Command

KPMG Netherlands

Export-Import Bank of ThailandUnited States Air Force

King Khalid University Hospital

University of Tokyo     Sales and
    Marketing
    
    Our sales force  We have a sales force in
    each of the following regions: the Americas, Europe, Middle East
    and Africa (EMEA), Asia Pacific (APAC)
    and throughout the rest of the world. Each sales force is
    responsible for managing all direct as well as channel business
    within its designated geographic territory.
    VARs, VADs and OEMs . Our VARs, VADs and OEMs
    market and sell our products to a broad array of organizations.
    Some of these VARs also purchase our solutions and offer them to
    their end customers as a managed service.        Customer
    Service, Support and Training
  when-and-if on-site
  Research
    and Development
   11




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Manufacturing
            Competition
     12




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Intellectual
    Property
          Corporate
    Information
  94089-1113, (408) 227-4500. www.arubanetworks.com
  Employees
    Website
    Posting of SEC Filings
  Form 10-K, Form 10-Q, Form 8-K Form 10-K 1-800-SEC-0330. www.sec.gov.
 13




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ITEM 1A.
    RISK
    FACTORS  Risks
    Related to Our Business and Industry
  Our
    business, operating results and growth rates may be adversely
    affected by unfavorable economic and market
    conditions.
    We
    compete in new and rapidly evolving markets and have a limited
    operating history, which makes it difficult to predict our
    future operating results
      Our
    operating results may fluctuate significantly, which makes our
    future results difficult to predict and could cause our
    operating results to differ from expectations.
     14




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
    the impact of unfavorable worldwide economic and market
    conditions, including the restricted credit environment
    impacting the credit of our channel partners and end user
    customers;
    our ability to develop and maintain our relationship with our
    VARs, VADs, OEMs and other partners;
    fluctuations in demand, sales cycles and prices for our products
    and services;
    reductions in customers budgets for information technology
    purchases and delays in their purchasing cycles;
    the sale of our products in the timeframes we anticipate,
    including the number and size of orders in each quarter;
    our ability to develop, introduce and ship in a timely manner,
    new products and product enhancements that meet customer
    requirements;
    our dependence on several large vertical markets, including the
    government, healthcare and education vertical markets;
    the timing of product releases or upgrades by us or by our
    competitors;
    any significant changes in the competitive dynamics of our
    markets, including new entrants, or further consolidation;
    our ability to control costs, including our operating expenses,
    and the costs of the components we purchase;
    product mix and average selling prices, as well as increased
    discounting of products by us and our competitors;
    the proportion of our products that are sold through direct
    versus indirect channels;
    our ability to maintain volume manufacturing pricing from
    Flextronics and our component suppliers;
    our contract manufacturers and component suppliers ability to
    meet our product demand forecasts;
    growth in our headcount and other related costs incurred in our
    customer support organization;
    the timing of revenue recognition in any given quarter as a
    result of revenue recognition rules;
    the regulatory environment for the certification and sale of our
    products; and
    seasonal demand for our products, some of which may not be
    currently evident due to our revenue growth for the fiscal year
    ended July 31, 2009.    We
    have a history of losses and may not achieve profitability in
    the future.
   15




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Our
    sales cycles can be long and unpredictable, and our sales
    efforts require considerable time and expense. As a result, our
    sales are difficult to predict and may vary substantially from
    quarter to quarter, which may cause our operating results to
    fluctuate significantly.
    The
    market in which we compete is highly competitive, and
    competitive pressures from existing and new companies may have a
    material adverse effect on our business, revenues, growth rates
    and market share.
    
    comprehensiveness of the solution;
    performance of software and hardware products;
    ability to deploy easily into existing networks;
    interoperability with other devices;
    scalability of solution;
    ability to provide secure mobile access to the network;
    speed of mobile connectivity offering;
    return on investment;
    ability to allow centralized management of products; and
    ability to obtain regulatory and other industry certifications.     16




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We
    sell a majority of our products through VADs, VARs, and OEMs. If
    these channel partners on which we rely do not perform their
    services adequately or efficiently, or if they exit the industry
    or have financial difficulties, there could be a material
    adverse effect on our revenues and our cash flow.
       17




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We
    depend upon the development of new products and enhancements to
    our existing products. If we fail to predict and respond to
    emerging technological trends and our customers changing
    needs, we may not be able to remain competitive.
         18




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As a
    result of the fact that we outsource the manufacturing of our
    products to Flextronics, we do not have the ability to ensure
    quality control over the manufacturing process. Furthermore, if
    there are significant changes in the financial or business
    condition of Flextronics, our ability to supply quality products
    to our customers may be disrupted.
        Flextronics
    purchases some components, subassemblies and products from a
    single supplier or a limited number of suppliers, and with
    respect to some of these suppliers, we have entered into license
    agreements that allow us to use their components in our
    products. The loss of any of these suppliers or the termination
    of any of these license agreements may cause us to incur
    additional
    set-up
    costs, result in delays in manufacturing and delivering our
    products, or cause us to carry excess or obsolete
    inventory.
     19




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Our
    international sales and operations subject us to additional
    risks that may adversely affect our operating
    results.
    
    the difficulty of managing and staffing international offices
    and the increased travel, infrastructure and legal compliance
    costs associated with multiple international locations;
    difficulties in enforcing contracts and collecting accounts
    receivable, and longer payment cycles, especially in emerging
    markets;
    the need to localize our products for international customers;
    tariffs and trade barriers, export regulations and other
    regulatory or contractual limitations on our ability to sell or
    develop our products in certain foreign markets;
    increased exposure to foreign currency exchange rate risk;
    reduced protection for intellectual property rights in some
    countries; and
    increased cost of terminating international employees in some
    countries.    If we
    are unable to protect our intellectual property rights, our
    competitive position could be harmed or we could be required to
    incur significant expenses to enforce our rights.
  and/or
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We are
    currently subject to a lawsuit involving intellectual property
    claims brought by Symbol Technologies, Inc. and Wireless Valley
    Communications, Inc., both Motorola subsidiaries, which could
    cause us to incur significant additional costs or prevent us
    from selling our products which could adversely affect our
    results of operations and financial condition.
    Claims
    by others that we infringe their proprietary technology could
    harm our business.
    We may
    engage in future acquisitions that could disrupt our business,
    cause dilution to our stockholders and harm our business,
    operating results and financial condition.
   21




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day-to-day
  Impairment
    of our goodwill or other assets would negatively affect our
    results of operations.
    If we
    lose members of our senior management or are unable to recruit
    and retain key employees on a cost-effective basis, we may not
    be able to successfully grow our business.
    If we
    fail to manage future growth effectively, our business would be
    harmed.
     22




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Our
    ability to sell our products is highly dependent on the quality
    of our support and services offerings, and our failure to offer
    high quality support and services would have a material adverse
    effect on our sales and results of operations.
    Enterprises
    are increasingly concerned with the security of their data, and
    to the extent they elect to encrypt data between the end user
    and the server, our products will become less
    effective.
    Our
    products are highly technical and may contain undetected
    hardware errors or software bugs, which could cause harm to our
    reputation and adversely affect our business.
  and/or
  Our
    use of open source software could impose limitations on our
    ability to commercialize our products.
   23




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We
    rely on the availability of third-party licenses.
    Enterprises
    may have slow WAN connections between some of their locations
    that may cause our products to become less
    effective.
  dial-up.
  New
    safety regulations or changes in existing safety regulations
    related to our products may result in unanticipated costs or
    liabilities, which could have a material adverse effect on our
    business, results of operations and future sales, and could
    place additional burdens on the operations of our
    business.
        Compliance
    with environmental matters and worker health and safety laws
    could be costly, and noncompliance with these laws could have a
    material adverse effect on our results of operations, expenses
    and financial condition.
  and/or
   24




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and/or and/or and/or
  We are
    subject to governmental export and import controls that could
    subject us to liability or impair our ability to compete in
    international markets.
    Our
    business is subject to the risks of earthquakes, fire, floods
    and other natural catastrophic events, and to interruption by
    manmade problems such as computer viruses or
    terrorism.
    Risks
    Related to Ownership of our Common Stock
  Our
    stock price may be volatile.
    
    variations in our operating results;
    announcements of technological innovations, new products or
    product enhancements, strategic alliances or significant
    agreements by us or by our competitors; 25




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
    the gain or loss of significant customers;
    recruitment or departure of key personnel;
    the impact of unfavorable worldwide economic and market
    conditions, including the restricted credit environment
    impacting credit of our channel partners and end user customers
    and indications that these conditions have spread to other
    countries;
    falling short of guidance on our financial results;
    changes in estimates of our operating results or changes in
    recommendations by any securities analysts who follow our common
    stock;
    significant sales, or announcement of significant sales, of our
    common stock by us or our stockholders; and
    adoption or modification of regulations, policies, procedures or
    programs applicable to our business.    If
    securities or industry analysts do not publish research or
    reports about our business, or if they issue an adverse or
    misleading opinion regarding our stock, our stock price and
    trading volume could decline.
    Insiders
    have substantial control over us and will be able to influence
    corporate matters.
    We may
    choose to raise additional capital. Such capital may not be
    available, or may be available on unfavorable terms, which would
    adversely affect our ability to operate our
    business.
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Provisions
    in our charter documents, Delaware law, employment arrangements
    with certain of our executive officers, and our OEM supply
    agreement with Alcatel-Lucent could discourage a takeover that
    stockholders may consider favorable.
    
    our board of directors has the right to elect directors to fill
    a vacancy created by the expansion of the board of directors or
    the resignation, death or removal of a director, which prevents
    stockholders from being able to fill vacancies on our board of
    directors;
    our stockholders may not act by written consent or call special
    stockholders meetings; as a result, a holder, or holders,
    controlling a majority of our capital stock would not be able to
    take certain actions other than at annual stockholders
    meetings or special stockholders meetings called by the
    board of directors, the chairman of the board, the chief
    executive officer or the president;
    our certificate of incorporation prohibits cumulative voting in
    the election of directors, which limits the ability of minority
    stockholders to elect director candidates;
    stockholders must provide advance notice and additional
    disclosures in order to nominate individuals for election to the
    board of directors or to propose matters that can be acted upon
    at a stockholders meeting, which may discourage or deter a
    potential acquiror from conducting a solicitation of proxies to
    elect the acquirors own slate of directors or otherwise
    attempting to obtain control of our company; and
    our board of directors may issue, without stockholder approval,
    shares of undesignated preferred stock; the ability to issue
    undesignated preferred stock makes it possible for our board of
    directors to issue preferred stock with voting or other rights
    or preferences that could impede the success of any attempt to
    acquire us.        We
    have incurred and will continue to incur significant increased
    costs as a result of operating as a public company, and our
    management will be required to devote substantial time to new
    compliance initiatives.
   27




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##### Table of Contents



Form 10-K
  ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES      ITEM 3.
    LEGAL
    PROCEEDINGS        ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   28




---



##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER REPURCHASES OF EQUITY SECURITIES  intra-day
  High


LowFiscal 2008First Quarter

$
21.05


$
15.67Second Quarter

$
18.70


$
9.03Third Quarter

$
10.96


$
4.69Fourth Quarter

$
7.00


$
4.29Fiscal 2009First Quarter

$
6.55


$
2.73Second Quarter

$
3.15


$
1.95Third Quarter

$
4.71


$
2.60Fourth Quarter

$
9.11


$
4.39      29




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##### Table of Contents



COMPARISON
    OF 28 MONTH CUMULATIVE TOTAL RETURN*
    Among Aruba Networks Inc, The NASDAQ Composite Index
    And The NASDAQ Computer Index
  
  Dividend
    Policy
    Repurchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers
   30




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##### Table of Contents



ITEM 6.
    SELECTED
    CONSOLIDATED FINANCIAL DATA  Form 10-K. Form 10-K.
  Years Ended July 31,2009


2008


2007


2006


2005(1)(In thousands)Consolidated Statements of Operations Data:Revenues:Product

$
161,927


$
148,550


$
107,939


$
43,171


$
Professional services and support


35,946



26,244



12,847



2,985



Ratable product and related professional services and support


1,386



3,466



6,713



26,347



12,043Total revenues


199,259



178,260



127,499



72,503



12,043Cost of revenues(2):Product


59,917



48,126



36,035



16,904



Professional services and support


7,437



7,761



4,863



2,409



Ratable product and related professional services and support


483



1,228



2,470



10,572



9,077Total cost of revenues


67,837



57,115



43,368



29,885



9,077Gross profit


131,422



121,145



84,131



42,618



2,966Operating expenses:Research and development(2)


40,293



37,393



25,654



14,130



9,353Sales and marketing(2)


90,241



86,008



60,115



33,765



22,369General and administrative(2)


23,198



17,740



14,600



5,963



3,576In-process research and development










632







Acquisition related severance expense






197











Restructuring expenses


1,447















Total operating expenses


155,179



141,338



101,001



53,858



35,298Operating loss


(23,757
)


(20,193
)


(16,870
)


(11,240
)


(32,332
)Other income (expense), net


1,132



4,036



(7,137
)


(529
)


(147
)Loss before provision for income taxes and cumulative effect of
    change in accounting principle


(22,625
)


(16,157
)


(24,007
)


(11,769
)


(32,479
)Provision for income taxes


788



967



375



306



156Loss before cumulative effect of change in accounting principle


(23,413
)


(17,124
)


(24,382
)


(12,075
)


(32,635
)Cumulative effect of change in accounting principle














66



Net loss

$
(23,413
)

$
(17,124
)

$
(24,382
)

$
(12,009
)

$
(32,635
)Net loss per common share; basic and diluted

$
(0.28
)

$
(0.22
)

$
(0.70
)

$
(1.07
)

$
(4.66
)  31




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##### Table of Contents



(1)
    
    Prior to the second quarter of fiscal 2006, we had not
    established VSOE of fair value and accordingly we recognized
    revenue on the transactions entire arrangements fees over
    the support period.(2)
    
    Includes stock-based compensation as follows:  Years Ended July 31,2009


2008


2007(3)


2006


2005(In thousands)Cost of revenues

$
1,018


$
704


$
327


$
34


$
23Research and development


7,577



6,200



2,925



259



179Sales and marketing


10,520



8,953



4,362



749



678General and administrative

$
5,464


$
3,421


$
5,103


$
213


$
194   (3)
    
    Beginning on August 1, 2006, we adopted SFAS 123R
    which requires the measurement and recognition of compensation
    expense based on estimated fair values for all share-based
    payment awards made to employees and directors.  As of July 31,2009


2008


2007


2006


2005(In thousands)Consolidated Balance Sheet Data:Cash and cash equivalents

$
41,298


$
37,602


$
42,570


$
9,263


$
4,293Short-term investments


81,839



64,130



62,430







899Working capital (deficit)


115,639



103,097



109,496



(10,472
)


(884
)Total assets


203,054



188,801



152,133



38,017



30,337Equipment loans payable














613



1,867Deposit for Series D redeemable convertible preferred stock














19,329



Redeemable convertible preferred stock














58,009



58,009Common stock and additional
    paid-in-capital


279,035



249,139



213,553



6,077



4,831Total stockholders equity (deficit)

$
137,585


$
130,875


$
112,487


$
(73,000
)

$
(62,459
)   ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS    Overview
   32




---



##### Table of Contents



year-over-year year-over-year
           33




---



##### Table of Contents



Revenues,
    Cost of Revenues and Operating Expenses
  Revenues
       34




---



##### Table of Contents



Cost
    of Revenues
      Gross
    Margin
    
    the proportion of our products that are sold through direct
    versus indirect channels;
    new product introductions and enhancements both by us and by our
    competitors;
    product mix and average selling prices;
    pressure to discount our products in response to our
    competitors discounting practices;
    demand for our products and services;
    our ability to attain volume manufacturing pricing from
    Flextronics and our component suppliers;
    losses associated with excess and obsolete inventory;
    growth in our headcount and other related costs incurred in our
    customer support organization; and
    amortization expense from our purchased intangible assets.    Operating
    Expenses
       35




---



##### Table of Contents



Stock-Based
    Compensation
    Other
    Income (Expense), net
  non-U.S. dollar
  Critical
    Accounting Policies
   36




---



##### Table of Contents



Revenue
    Recognition and Sales Returns
    No. 97-2, Software Revenue Recognition (SOP 97-2)
  and/or SOP 97-2
      point-of-sale
   37




---



##### Table of Contents



Stock-Based
    Compensation
    Goodwill
    and Intangibles
  Goodwill and Other
    Intangible Assets
    
    significant underperformance relative to estimated results;
    significant changes in the manner of our use of the acquired
    assets or the strategy for our overall business; and
    significant negative industry or economic trends.      Inventory
    Valuation
  first-in,
 38




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##### Table of Contents



Allowances
    for Doubtful Accounts
    Income
    Taxes
  Accounting for Income Taxes
  Accounting for Uncertainty
    in Income Taxes
    Recent
    Accounting Pronouncements
   39




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##### Table of Contents



Results
    of Operations
    Years Ended July 31,2009


2008


2007Revenues:Product


81.3
%


83.3
%


84.6
%Professional services and support


18.0
%


14.7
%


10.1
%Ratable product and related professional services and support


0.7
%


2.0
%


5.3
%Total revenues


100.0
%


100.0
%


100.0
%Cost of revenues:Product


30.1
%


27.0
%


28.3
%Professional services and support


3.7
%


4.4
%


3.8
%Ratable product and related professional services and support


0.2
%


0.6
%


1.9
%Gross margin


66.0
%


68.0
%


66.0
%Operating expenses:Research and development


20.3
%


21.0
%


20.1
%Sales and marketing


45.3
%


48.2
%


47.1
%General and administrative


11.6
%


10.0
%


11.5
%In-process research and development










0.5
%Acquisition related expenses






0.1
%


Restructuring expenses


0.7
%






Operating margin


(11.9
)%


(11.3
)%


(13.2
)%Other income (expense), net


0.5
%


2.2
%


(5.6
)%Loss before income taxes


(11.4
)%


(9.1
)%


(18.8
)%Provision for income taxes


0.4
%


0.5
%


0.3
%Net loss


(11.8
)%


(9.6
)%


(19.1
)%  40




---



##### Table of Contents



Revenues
  Years Ended July 31,2009


2008


2007(In thousands)Total revenues

$
199,259


$
178,260


$
127,499Type of revenues:Product


161,927



148,550



107,939Professional services and support


35,946



26,244



12,847Ratable product and related professional services and support


1,386



3,466



6,713Total revenues

$
199,259


$
178,260


$
127,499Revenues by geography:United States


129,991



118,647



84,878Europe, the Middle East and Africa


34,178



31,149



20,710Asia Pacific


27,023



20,231



13,301Rest of World (including Japan)


8,067



8,233



8,610Total revenues

$
199,259


$
178,260


$
127,499                41




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##### Table of Contents



Cost
    of Revenues and Gross Margin
  Years Ended July 31,2009


2008


2007(In thousands)Total revenues

$
199,259


$
178,260


$
127,499Cost of product


59,917



48,126



36,035Cost of professional services and support


7,437



7,761



4,863Cost of ratable product and related professional services and
    support


483



1,228



2,470Total cost of revenues


67,837



57,115



43,368Gross profit

$
131,422


$
121,145


$
84,131Gross margin


66.0
%


68.0
%


66.0
%                42




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##### Table of Contents



Research
    and Development Expenses
  Years Ended July 31,2009

2008

2007(In thousands)Research and development expenses

$
40,293


$
37,393


$
25,654Percent of total revenues


20.3
%


21.0
%


20.1
%       Sales
    and Marketing Expenses
  Years Ended July 31,2009

2008

2007(In thousands)Sales and marketing expenses

$
90,241


$
86,008


$
60,115Percent of total revenues


45.3
%


48.2
%


47.1
%   stock-based
    General
    and Administrative Expenses
  Years Ended July 31,2009

2008

2007(In thousands)General and administrative expenses

$
23,198


$
17,740


$
14,600Percent of total revenues


11.6
%


10.0
%


11.5
%  43




---



##### Table of Contents



In-Process
    Research and Development Expense
  and/or
  Acquisition
    Related Severance Expenses
    Restructuring
    Expenses
    44




---



##### Table of Contents



Other
    Income (Expense), net
    Years Ended July 31,2009


2008


2007(In thousands)Interest income

$
1,837


$
4,083


$
2,221Interest expense










(88
)Other income (expense), net


(705
)


(47
)


(9,270
)Total other income (expense), net

$
1,132


$
4,036


$
(7,137
)   yield-to-maturity
        Provision
    for Income Taxes
     45




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##### Table of Contents



Quarterly
    Fluctuations in Operating Results
    For the Three Months Ended2009

July 31,


April 30,


January 31,


October 31,(In thousands, except per share data)RevenuesProduct

$
43,366


$
35,822


$
38,871


$
43,868Professional services and support


9,675



9,666



8,468



8,137Ratable product and related professional services and support


285



318



342



441Total revenues


53,326



45,806



47,681



52,446Cost of revenuesProduct


15,939



14,005



13,368



16,605Professional services and support


1,852



1,814



1,838



1,933Ratable product and related professional services and support


98



110



120



155Total cost of revenues


17,889



15,929



15,326



18,693Gross profit


35,437



29,877



32,355



33,753Operating expensesResearch and development


9,886



9,734



10,250



10,423Sales and marketing


23,722



20,251



21,607



24,661General and administrative


6,044



5,854



6,015



5,285Restructuring expenses










1,447



Total operating expenses


39,652



35,839



39,319



40,369Operating loss


(4,215
)


(5,962
)


(6,964
)


(6,616
)Other income (expense), net


(2
)


414



388



332Loss before provision for income taxes


(4,217
)


(5,548
)


(6,576
)


(6,284
)Provision for income taxes


281



213



201



93Net loss

$
(4,498
)

$
(5,761
)

$
(6,777
)

$
(6,377
)Net loss per common share, basic and diluted

$
(0.05
)

$
(0.07
)

$
(0.08
)

$
(0.08
)   46




---



##### Table of Contents



For the Three Months Ended2008

July 31,


April 30,


January 31,


October 31,(In thousands, except per share data)RevenuesProduct

$
40,444


$
35,478


$
34,170


$
38,458Professional services and support


7,136



6,287



5,548



7,273Ratable product and related professional services and support


699



841



927



999Total revenues


48,279



42,606



40,645



46,730Cost of revenuesProduct


14,049



11,236



10,984



11,857Professional services and support


1,908



1,650



1,386



2,817Ratable product and related professional services and support


242



294



330



362Total cost of revenues


16,199



13,180



12,700



15,036Gross profit


32,080



29,426



27,945



31,694Operating expensesResearch and development


10,245



9,762



9,086



8,300Sales and marketing


24,252



21,230



18,826



21,700General and administrative


4,416



4,730



4,403



4,191Acquisition related severance expenses






197







Total operating expenses


38,913



35,919



32,315



34,191Operating loss


(6,833
)


(6,493
)


(4,370
)


(2,497
)Other income, net


304



530



1,120



2,082Loss before provision for income taxes


(6,529
)


(5,963
)


(3,250
)


(415
)Provision for income taxes


255



260



228



224Net loss

$
(6,784
)

$
(6,223
)

$
(3,478
)

$
(639
)Net loss per common share, basic and diluted

$
(0.08
)

$
(0.08
)

$
(0.04
)

$
(0.01
)   period-to-period
  Liquidity
    and Capital Resources
  As of July 31,2009


2008(In thousands)Working capital

$
115,639


$
103,097Cash and cash equivalents

$
41,298


$
37,602Short-term investments

$
81,839


$
64,130   Years Ended July 31,2009


2008


2007(In thousands)Cash provided by (used in) operating activities

$
20,585


$
8,295


$
(4,208
)Cash used in investing activities


(21,747
)


(21,738
)


(70,490
)Cash provided by financing activities


4,858



8,470



107,920  47




---



##### Table of Contents



Cash
    Flows from Operating Activities
        Cash
    Flows from Investing Activities
      Cash
    Flows from Financing Activities
     48




---



##### Table of Contents



Other
    Uses of Cash
    Contractual
    Obligations
    MoreLess Than


1  3


3  5


ThanTotal


1 Year


Years


Years


5 Years(In thousands)Operating leases

$
16,696


$
3,971


$
4,288


$
4,094


$
4,343Non-cancellable inventory purchase commitments(1)


14,885



14,885











Total contractual obligations

$
31,581


$
18,856


$
4,288


$
4,094


$
4,343     (1)
    
    We outsource the production of our hardware to third-party
    manufacturing suppliers. We enter into various inventory related
    purchase agreements with these suppliers. Generally, under these
    agreements, 40% of the orders are cancelable by giving notice
    60 days prior to the expected shipment date, and 20% of
    orders are cancelable by giving notice 30 days prior to the
    expected shipment date. Orders are not cancelable within
    30 days prior to the expected shipment date.    Off-Balance
    Sheet Arrangements
   49




---



##### Table of Contents



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Foreign
    Currency Risk
    Interest
    Rate Sensitivity
  available-for-sale
 50




---



##### Table of Contents



ITEM 8.
    CONSOLIDATED
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA  Index to
    Consolidated Financial Statements
  PageReport on Managements Assessment of
    Internal Control Over Financial Reporting


52Report of Independent Registered Public
    Accounting Firm


53Consolidated Balance Sheets


54Consolidated Statements of Operations


55Consolidated Statements of Redeemable Convertible
    Preferred Stock and Stockholders Equity (Deficit)


56Consolidated Statements of Cash Flows


57Notes to Consolidated Financial Statements


58  51




---



##### Table of Contents



REPORT ON
    MANAGEMENTS ASSESSMENT OF
    INTERNAL CONTROL OVER FINANCIAL REPORTING  Rules 13a-15(f)
  
    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of our Company;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of the Company are being made
    only in accordance with authorizations of management and
    directors of our Company; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of our
    Companys assets that could have a material effect on the
    financial statements.        /s/  Dominic
    P. Orr

/s/  Steffan
    TomlinsonDominic P. Orr
    President, Chief Executive Officer and Chairman of the Board

Steffan Tomlinson
    Chief Financial Officer  52




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     Internal Control  Integrated Framework
        
    53




---



##### Table of Contents



ARUBA
    NETWORKS, INC.CONSOLIDATED BALANCE SHEETS
  July 31,


July 31,2009


2008(In thousands, except per share data)ASSETSCurrent assetsCash and cash equivalents

$
41,298


$
37,602Short-term investments


81,839



64,130Accounts receivable, net


33,466



32,679Inventory


8,450



11,644Deferred costs


5,152



4,317Prepaids and other


2,350



3,196Total current assets


172,555



153,568Property and equipment, net


7,426



7,181Goodwill


7,656



7,656Intangible assets, net


14,091



19,027Deferred costs


9



239Other assets


1,317



1,130Total assets

$
203,054


$
188,801LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
930


$
5,844Accrued liabilities


20,722



16,908Income taxes payable


610



576Deferred revenue


34,654



27,143Total current liabilities


56,916



50,471Deferred revenue


8,524



7,338Other long-term liabilities


29



117Total liabilities


65,469



57,926Commitments and contingencies (Note 13)Stockholders equityPreferred stock: $0.0001 par value; 10,000 shares
    authorized at July 31, 2009 and 2008, no shares issued and
    outstanding at July 31, 2009 and 2008






Common stock: $0.0001 par value; 350,000 shares
    authorized at July 31, 2009 and 2008; 86,744 and
    82,836 shares issued and outstanding at July 31, 2009
    and 2008


9



8Additional paid-in capital


279,026



249,131Accumulated other comprehensive income (loss)


182



(45
)Accumulated deficit


(141,632
)


(118,219
)Total stockholders equity


137,585



130,875Total liabilities and stockholders equity

$
203,054


$
188,801    54




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Years Ended July 31,2009


2008


2007(In thousands, except per share data)RevenuesProduct

$
161,927


$
148,550


$
107,939Professional services and support


35,946



26,244



12,847Ratable product and related professional services and support


1,386



3,466



6,713Total revenues


199,259



178,260



127,499Cost of revenuesProduct


59,917



48,126



36,035Professional services and support


7,437



7,761



4,863Ratable product and related professional services and support


483



1,228



2,470Total cost of revenues


67,837



57,115



43,368Gross profit


131,422



121,145



84,131Operating expensesResearch and development


40,293



37,393



25,654Sales and marketing


90,241



86,008



60,115General and administrative


23,198



17,740



14,600In-process research and development










632Acquisition related severance expenses






197



Restructuring expenses


1,447







Total operating expenses


155,179



141,338



101,001Operating loss


(23,757
)


(20,193
)


(16,870
)Other income (expense), netInterest income


1,837



4,083



2,221Interest expense










(88
)Other income (expense), net


(705
)


(47
)


(9,270
)Total other income (expense), net


1,132



4,036



(7,137
)Loss before provision for income taxes


(22,625
)


(16,157
)


(24,007
)Provision for income taxes


788



967



375Net loss

$
(23,413
)

$
(17,124
)

$
(24,382
)Net loss per common share, basic and diluted

$
(0.28
)

$
(0.22
)

$
(0.70
)Shares used in computing basic and diluted net loss per common
    share


84,612



79,467



34,808Stock-based compensation expense included in above:Cost of revenues

$
1,018


$
704


$
327Research and development


7,577



6,200



2,925Sales and marketing


10,520



8,953



4,362General and administrative

$
5,464


$
3,421


$
5,103    55




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE
    PREFERRED STOCK AND
 STOCKHOLDERS
    EQUITY (DEFICIT)
  Reedemable















AccumulatedConvertible









Additional


Deferred


OtherPreferred Stock



Common Stock


Paid-in


Stock-Based


Comprehensive


AccumulatedShares


Amount



Shares


Amount


Capital


Compensation


Income (Loss)


Deficit


Total(In thousands)Balance at July 31, 2006


45,108


$
58,009




15,257


$
2


$
6,075


$
(2,364
)

$



$
(76,713
)

$
(73,000
)Comprehensive loss:Unrealized gain on short-term investments



























29







29Net loss































(24,382
)


(24,382
)Total comprehensive loss



































(24,353
)Issuance of Series D redeemable convertible preferred
    stock, net of issuance costs of $127


4,573



29,829




























Conversion of redeemable convertible preferred stock into common
    stock upon completion of initial public offering


(49,681
)


(87,838
)



49,681



5



87,833















87,838Proceeds from initial public offering of common stock, net of
    issuance costs of $2,307











9,200



1



91,808















91,809Fair value of shares issued to employees











44







245















245Fair value of shares issued to non-employees











50







534















534Fair value of stock options issued to non-employees



















577















577Fair value of of shares issued to charitable foundation











100







1,415















1,415Exercise of common stock options











2,339







4,112















4,112Exercise of warrants











114























Repurchase of common stock











(176
)






(70
)














(70
)Reclassification of liability relating to preferred stock
    warrants upon conversion of such warrants to common stock
    warrants in connection with initial public offering



















9,933















9,933Issuance of common stock under stock issuance agreement with
    customer











318







3,500















3,500Reclassification of unamortized stock-based compensation upon
    adoption of SFAS 123R



















(2,364
)


2,364











Stock-based compensation expense relatedto stock options issued to employees



















9,947















9,947Balance at July 31, 2007











76,927



8



213,545







29



(101,095
)


112,487Comprehensive loss:Unrealized loss on short-term investments



























(74
)






(74
)Net loss































(17,124
)


(17,124
)Total comprehensive loss



































(17,198
)Fair value of shares issued to non-employees











68







408















408Fair value of stock options issued to non-employees



















(279
)














(279
)Exercise of common stock options











3,280







6,330















6,330Shares purchased under employee stock purchase plan











781







4,827















4,827Exercise of warrants











519























Change in carrying value of preferred stock warrants



















(715
)














(715
)Repurchase of common stock











(66
)






(46
)














(46
)Stock-based compensation expense related to stock options and
    awards issued to employees











215







19,149















19,149Common stock issued in purchase acquisition











1,519







8,002















8,002Repurchase of common stock under stock repurchase program











(407
)






(2,142
)














(2,142
)Excess tax benefit associated with stock based compensation



















52















52Balance at July 31, 2008











82,836



8



249,131







(45
)


(118,219
)


130,875Comprehensive loss:Unrealized gain on short-term investments



























227







227Net loss































(23,413
)


(23,413
)Total comprehensive loss



































(23,186
)Fair value of shares issued to non-employees











69







392















392Fair value of stock options issued to non-employees



















37















37Exercise of common stock options











1,436







1,943















1,943Shares purchased under employee stock purchase plan











1,114







3,827















3,827Repurchase of common stock











(18
)






449















449Stock-based compensation expense related to stock options and
    awards issued to employees











1,498



1



24,150















24,151Repurchase of common stock under stock repurchase program











(191
)






(991
)














(991
)Excess tax benefit associated with stock based compensation



















88















88Balance at July 31, 2009





$





86,744


$
9


$
279,026


$



$
182


$
(141,632
)

$
137,585    56




---



##### Table of Contents





ARUBA
    NETWORKS, INC.
  CONSOLIDATED STATEMENTS OF CASH
    FLOWS
  Years Ended July 31,2009


2008


2007(In thousands)Cash flows from operating activitiesNet loss

$
(23,413
)

$
(17,124
)

$
(24,382
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:Depreciation and amortization


9,686



5,640



2,008Provision for doubtful accounts


138



283



199Write downs for excess and obsolete inventory


3,397



1,209



1,110Compensation related to stock options and share awards


24,579



19,278



11,302Net realized gains on short-term investments


(7
)


(22
)


Stock issued to charitable foundation










1,415Non-cash interest expense










44Accretion of purchase discounts on short-term investments


(271
)


(1,381
)


(261
)Change in carrying value of preferred stock warrants






(715
)


8,992Loss/ (gain) on disposal of fixed assets


(15
)


51



5In-process research and development










632Excess tax benefit associated with stock-based compensation


(88
)


(52
)


Changes in operating assets and liabilities, net of acquisitions:Accounts receivable


(924
)


(8,352
)


(10,550
)Inventory


(766
)


(5,092
)


(3,955
)Prepaids and other


847



(660
)


(774
)Deferred costs


(606
)


(617
)


1,381Other assets


(50
)


(773
)


(99
)Accounts payable


(4,926
)


3,394



(2,184
)Deferred revenue


8,698



10,957



3,322Other current and noncurrent liabilities


4,184



1,924



7,522Income taxes payable


122



347



65Net cash provided by (used in) operating activities


20,585



8,295



(4,208
)Cash flows from investing activitiesPurchases of short-term investments


(101,088
)


(119,856
)


(67,897
)Proceeds from sales and maturities of short-term investments


83,746



119,556



5,744Purchases of property and equipment


(4,405
)


(5,408
)


(3,737
)Cash paid in purchase acquisitions, net of cash acquired






(16,030
)


(4,600
)Net cash used in investing activities


(21,747
)


(21,738
)


(70,490
)Cash flows from financing activitiesRepayments on equipment loan obligations










(654
)Cash received under stock issuance agreement










2,130Proceeds from issuance of redeemable convertible preferred
    stock, net










10,597Proceeds from initial public offering, net










91,809Proceeds from issuance of common stock


5,761



10,560



4,038Repurchase of common stock under stock repurchase program


(991
)


(2,142
)


Excess tax benefit associated with stock-based compensation


88



52



Net cash provided by financing activities


4,858



8,470



107,920Effect of exchange rate changes on cash and cash equivalents






5



85Net increase (decrease) in cash and cash equivalents


3,696



(4,968
)


33,307Cash and cash equivalents, beginning of period


37,602



42,570



9,263Cash and cash equivalents, end of period

$
41,298


$
37,602


$
42,570Supplemental disclosure of cash flow informationIncome taxes paid

$
673


$
652


$
294Interest paid










37Supplemental disclosure of non-cash investing and
    financing activitiesReclassification of warrant liability to equity upon initial
    public offering










9,933Reclassification of non-current liability to equity upon initial
    public offering










3,500Common stock issued in purchase acquisition

$



$
7,852


$
    57




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    The
    Company and its Significant Accounting Policies  The
    Company
    Significant
    Accounting Policies
  Basis of
    Presentation
    Principles
    of Consolidation
    Use of
    Estimates
    Foreign
    Currency Accounting
   58




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Risks and
    Uncertainties
    Fair
    Value of Financial Instruments
    Cash and
    Cash Equivalents
    Short-Term
    Investments
  available-for-sale.
  FAS 115-2, Recognition and Presentation of
    Other-Than-Temporary
    Impairments FAS 115-2 ) FAS 115-2, other-than-temporary other-than-temporarily
 59




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Concentrations
    of Credit Risk
      Provision
    for Doubtful Accounts
      Inventory
  first-in,
  Deferred
    Costs
  SOP 97-2
  Property
    and Equipment, net
   60




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Impairment
    of Long-lived Assets
    Goodwill
    Revenue
    Recognition and Sales Returns
    No. 97-2, Software Revenue Recognition, (SOP 97-2),
  and/or SOP 97-2
 61




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        point-of-sale
        Research
    and Development Expenses
   62




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock-Based
    Compensation
    Advertising
    Income
    Taxes
  Accounting for Income Taxes
  Accounting for Uncertainty
    in Income Taxes
  Comprehensive
    Income (Loss)
  available-for-sale
 63




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Recent
    Accounting Pronouncements
  Subsequent Events
  (i) FSP 157-4, Determining Fair Value When the Volume and Level of Activity
    for the Asset or Liability have Significantly Decreased and
    Identifying Transactions That Are Not Orderly (FSP 157-4), (ii) SFAS 115-2 SFAS 124-2, Recognition and Presentation of
    Other-Than-Temporary
    Impairments (FSP 115-2 FSP 124-2) , (iii) SFAS 107-1 28-1, Interim Disclosures about Fair Value of Financial
    Instruments 28-1), FSP 157-4 FSP 115-2 FSP 124-2 other-than-temporarily other-than-temporarily 28-1
  EITF 03-6-1, Determining Whether Instruments Granted in Share-Based
    Payment Transactions Are Participating Securities EITF 03-6-1 EITF 03-6-1 EITF 03-6-1. EITF 03-6-1
  SFAS No. 142-3, Determination of the Useful Life of Intangible Assets FAS 142-3). FAS 142-3 Goodwill and Other Intangible Assets Business Combinations, FAS 142-3
  Non-controlling Interests in Consolidated Financial Statement
 64




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Business Combinations
  2.
    Restructuring
    Charges      Accrual as of








Accrual as ofJuly 31,


Restructuring


Cash


July 31,2008


Charges


Paid


2009(In thousands)Severance and professional fees

$



$
1,138


$
(1,138
)

$
Facility exit costs






309



(115
)


194Total

$



$
1,447


$
(1,253
)

$
194   3.
    Intangible
    Assets    As of July 31, 2009Estimated

Gross


Accumulated


NetUseful Lives

Value


Amortization


Value(In thousands)Intangible Assets, netExisting Technology

4 years

$
9,283


$
(3,593
)

$
5,690Patents/Core Technology

4 years


3,046



(1,178
)


1,868Customer Contracts

6 to 7 years


5,083



(1,185
)


3,898Support Agreements

5 to 6 years


2,717



(741
)


1,976Tradenames/Trademarks

5 years


600



(164
)


436Non-Compete Agreements

2 years


712



(489
)


223Total



$
21,441


$
(7,350
)

$
14,091   65




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  As of July 31, 2008Estimated

Gross


Accumulated


NetUseful Lives

Value


Amortization


Value(In thousands)Intangible Assets, netExisting Technology

4 years

$
9,283


$
(1,272
)

$
8,011Patents/Core Technology

4 years


3,046



(417
)


2,629Customer Contracts

6 to 7 years


5,083



(349
)


4,734Support Agreements

5 to 6 years


2,717



(199
)


2,518Tradenames/Trademarks

5 years


600



(44
)


556Non-Compete Agreements

2 years


712



(133
)


579Total



$
21,441


$
(2,414
)

$
19,027       Amount(In thousands)Years ending July 31,2010

$
4,8042011


4,5552012


2,9172013


1,259Thereafter


556Total

$
14,091   4.
    Net Loss
    Per Common Share    Years Ended July 31,2009


2008


2007(In thousands, except per share data)Net loss

$
(23,413
)

$
(17,124
)

$
(24,382
)Weighted-average common shares outstanding net of
    weighted-average common shares subject to repurchase


84,612



79,467



34,808Basic and diluted net loss per common share

$
(0.28
)

$
(0.22
)

$
(0.70
)    66




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    July 31,2009

2008

2007(In thousands)Options to purchase common stock


21,542



19,518



21,918Common stock subject to repurchase


156



430



1,047Restricted stock awards


2,859



3,365



271Warrants to purchase common stock










556   5.
    Short-Term
    Investments    Gross


GrossCost


Unrealized


Unrealized


FairBasis


Gains


Losses


Value(In thousands)Balance at July 31, 2009Corporate bonds and notes

$
10,667


$
41


$



$
10,708U.S. government agency securities


63,720



144



(6
)


63,858U.S. treasury bills


995



1







996Commercial paper


6,275



3



(1
)


6,277Total short-term investments

$
81,657


$
189


$
(7
)

$
81,839   Gross


GrossCost


Unrealized


Unrealized


FairBasis


Gains


Losses


Value(In thousands)Balance at July 31, 2008Corporate bonds and notes

$
11,930


$
5


$
(23
)

$
11,912U.S. government agency securities


44,724



19



(47
)


44,696Commercial paper


7,521



1







7,522Total short-term investments

$
64,175


$
25


$
(70
)

$
64,130     July 31, 2009Cost


FairBasis


Value(In thousands)One year or less

$
55,634


$
55,781One to two years


26,023



26,058Total short-term investments

$
81,657


$
81,839   FAS 115-2.
 67




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Less than 12 MonthsFair


UnrealizedValue


Loss(In thousands)July 31, 2009Commercial paper

$
6,277


$
(1
)U.S. government agencies


63,858



(6
)Total

$
70,135


$
(7
)   Fair
    Value of Financial Instruments
          Total


Level 1


Level 2(In thousands)Corporate bonds and notes

$
10,708


$



$
10,708U.S. government agency securities


63,858







63,858U.S. treasury bills


996







996Commercial paper


6,277







6,277Money market funds


17,394



17,394



Total cash equivalents and short-term investments


99,233


$
17,394


$
81,839Cash deposits with third-party financial institutions


23,904Total cash, cash equivalents and short-term investments

$
123,137  68




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   6.
    Balance
    Sheet Components    July 31,


July 31,2009


2008(In thousands)Accounts Receivable, netTrade accounts receivable

$
33,856


$
33,237Less: Allowance for doubtful accounts


(390
)


(558
)Total

$
33,466


$
32,679   July 31,


July 31,2009


2008(In thousands)InventoryRaw materials

$
486


$
283Finished goods


7,964



11,361Total

$
8,450


$
11,644   July 31,


July 31,2009


2008(In thousands)Accrued LiabilitiesCompensation and benefits

$
6,777


$
8,768Inventory


5,145



1,033Other


8,800



7,107Total

$
20,722


$
16,908   7.
    Property
    and Equipment, Net    Estimated


July 31,


July 31,Useful Lives


2009


2008(In thousands)Property and Equipment, netComputer equipment


2 years


$
7,220


$
6,197Computer software


2- 5 years



4,175



3,582Machinery and equipment


2 years



7,160



5,032Furniture and fixtures


5 years



1,765



863Leasehold improvements


2-5 years



637



551Total property and equipment, gross






20,957



16,225Less: Accumulated depreciation and amortization






(13,531
)


(9,044
)Total property and equipment, net





$
7,426


$
7,181    69




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   8.
    Deferred
    Revenue    July 31,


July 31,2009


2008(In thousands)Deferred RevenueProduct

$
10,911


$
9,351Professional services and support


23,006



16,399Ratable product and related services and support


737



1,393Total deferred revenue, current


34,654



27,143Professional services and support, long-term


8,487



6,563Ratable product and related services and support, long-term


37



775Total deferred revenue, long-term


8,524



7,338Total deferred revenue

$
43,178


$
34,481       9.
    Income
    Taxes    Years Ended July 31,2009


2008


2007(In thousands)Domestic

$
(24,762
)

$
(17,804
)

$
(24,144
)International


2,137



1,647



137Loss before provision for income taxes

$
(22,625
)

$
(16,157
)

$
(24,007
)     Years Ended July 31,2009


2008


2007(In thousands)CurrentFederal

$
15


$



$
State


260



281



25Foreign


513



686



350Total provision for income taxes

$
788


$
967


$
375  70




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    As of July 31,2009


2008(In thousands)Deferred tax assetsNet operating loss carryforwards

$
18,863


$
20,914Research and development credits


9,988



6,986Accruals and reserves


28,215



20,911Total deferred tax assets


57,066



48,811Valuation allowance


(54,879
)


(45,337
)Net deferred tax assets


2,187



3,474Deferred tax liabilitiesDepreciation and amortization


(2,187
)


(3,474
)Total deferred tax liabilities


(2,187
)


(3,474
)Net deferred tax asset (liability)

$



$
         Years Ended July 31,2009


2008


2007Federal income tax expense (benefit)


(34.0
)%


(34.0
)%


(34.0
)%State income tax (benefit), net of federal benefit



%


(3.7
)%


(3.9
)%Foreign taxes


(1.2
)%


0.6
%


1.3
%Stock compensation and warrant expense


10.6
%


7.7
%


18.7
%Non-deductible expenses


(5.3
)%


1.5
%


0.7
%Research and developments credits


(8.6
)%


(15.0
)%


(9.6
)%Change in valuation allowance


41.9
%


48.9
%


28.4
%Total provision for income taxes


3.4
%


6.0
%


1.6
%    71




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Amount(In thousands)Balance at August 1, 2007

$
1,903Additions for tax positions related to current year


1,763Reductions for tax positions related to prior year


Settlements


Balance at July 31, 2008


3,666Additions for tax positions related to current year


1,458Reductions for tax positions related to prior year


Settlements


Balance at July 31, 2009

$
5,124       10.
    Capital
    Stock     72




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Non-Vested Shares

SharesNon-vested as of July 31, 2007


1,046,599Early exercise of options


131,748Vested


(682,131
)Forfeited


(66,646
)Non-vested as of July 31, 2008


429,570Early exercise of options


13,333Vested


(268,188
)Forfeited


(18,333
)Non-vested as of July 31, 2009


156,382   Stock
    Repurchase Program
    11.
    Stock
    Option and Other Benefit Plans  2002
    Stock Plan
      2007
    Equity Incentive Plan
   73




---



##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      
    all shares of the Companys common stock reserved under the
    2002 Plan which have been reserved but not issued or subject to
    outstanding grants, up to a maximum of
    7,000,000 shares; and
    any shares of the Companys common stock issued under the
    2002 Plan that are returned to the 2002 Plan as a result of the
    termination of options or that are repurchased by the Company
    pursuant to the terms of the plan, up to a maximum of
    10,000,000 shares.    
    5% of the outstanding shares of the Companys common stock
    on the last day of the immediately preceding fiscal year; or
    15,000,000 shares.       74




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##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock
    Option Activity
    Options OutstandingWeighted





WeightedAverage


Weighted


AverageShares





Exercise


Average


Remaining


AggregateAvailable for


Number of


Price


Fair Value


Contractual


IntrinsicGrant


Shares


per Share


per Share


Term (Years)


Value(4)Balance at July 31, 2006


3,013,607



14,992,764


$
1.70Shares reserved for issuance


9,800,000



Issuance of share awards and units


(366,990
)


Options grantedAt fair value(1)


(10,303,200
)


10,303,200



5.98


$
2.85In excess of fair value(2)


(10,000
)


10,000



19.25



7.88Options exercised






(2,338,566
)


1.72










$
8,489,885Options repurchased


175,721







0.40Options cancelled


1,049,787



(1,049,787
)


2.90Balance at July 31, 2007


3,358,925



21,917,611



3.66







8.80Shares reserved for issuance


3,846,366



Restricted stock awards granted


(3,671,208
)


Restricted stock awards cancelled


293,255



Options granted


(2,994,860
)


2,994,860



8.35



3.71Options granted in purchase acquisition






155,409



0.72



4.63Options exercised






(3,279,536
)


1.76











39,772,972Options repurchased


66,646







0.74Options cancelled


2,270,342



(2,270,342
)


5.97Balance at July 31, 2008


3,169,466



19,518,002



4.41







7.43



44,913,703Shares reserved for issuance


4,141,807



Restricted stock awards granted


(1,626,631
)


Restricted stock awards cancelled


565,582



Options granted


(10,491,975
)


10,491,975



3.82


$
1.55Options exercised






(1,436,068
)


1.35











4,874,878Options repurchased


18,333







0.49Options cancelled


7,031,994



(7,031,994
)


7.48Balance at July 31, 2009


2,808,576



21,541,915


$
3.32







6.68


$
120,621,047Options vested and expected to vest as of July 31, 2009(3)






20,181,021


$
3.27







6.68


$
114,099,660Options exercisable as of July 31, 2009






8,391,669


$
2.69







6.67


$
52,420,315  75




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##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (1)
    
    Options granted at fair value represent options whose exercise
    price equals the estimated fair value of the common stock on the
    date of the grant.(2)
    
    Options granted in excess of fair value represent options whose
    exercise price is greater than the estimated fair value of the
    common stock on the date of the grant.(3)
    
    Options expected to vest are the result of applying the
    pre-vesting forfeiture rate assumption to total outstanding
    options.(4)
    
    The aggregate intrinsic value is calculated as the difference
    between the exercise price of the underlying stock option awards
    and the fair value of the Companys common stock on the
    date of each option exercise.      Stock
    Option Exchange Program
     76




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##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Restricted
    Stock Award Activity
    Weighted AverageGrant DateFair ValueShares


per ShareBalance at July 31, 2007


270,700



17.43Awards granted


3,671,208



6.78Awards vested


(283,703
)


12.31Awards cancelled


(293,255
)


10.92Balance at July 31, 2008


3,364,950


$
6.81Awards granted


1,626,631



4.67Awards vested


(1,566,715
)


5.86Awards cancelled


(565,582
)


6.31Balance at July 31, 2009


2,859,284


$
6.21     Options
    and Awards Granted to Non-Employees
         77




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##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Employee
    Stock Purchase Plan
      Purchase date


September 2, 2008Shares issued


490,053Weighted average purchase price per share

$
4.58Purchase date


March 2, 2009Shares issued


624,458Weighted average purchase price per share

$
2.33      78




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##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fair
    Value Disclosures
    Employee
    Stock Options
  Years Ended July 31,2009


2008


2007AssumptionsRisk-free interest rate


2.0
%


3.2
%


4.7
%Expected term (in years)


4.2



4.3



4.3Dividend yield










Volatility


66
%


51
%


53
%Weighted average fair value of options granted

$
1.55


$
3.67


$
2.86   Employee
    Stock Purchase Plan
  Years Ended July 31,2009


2008


2007AssumptionsRisk-free interest rate


0.5% to 2.3
%


1.5% to 4.2
%


4.2% to 5.0
%Expected term (in years)


0.5 to 2.0



0.5 to 2.0



0.4 to 2.0Dividend yield










Volatility


53% to 101
%


43% to 65
%


43% to 48%Weighted average fair value of stock purchase rights granted

$
1.51


$
2.43


$
4.18     Stock-based
    Expenses
   79




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##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  401(k)
    Defined Contribution Plan
    12.
    Segment
    Information    Disclosures about Segments of an
    Enterprise and Related Information,
      Years Ended July 31,2009


2008


2007(In thousands)United States

$
129,991


$
118,647


$
84,878Europe, Middle East and Africa


34,178



31,149



20,710Asia Pacific


27,023



20,231



13,301Rest of World (including Japan)


8,067



8,233



8,610Total

$
199,259


$
178,260


$
127,499   13.
    Commitments
    and Contingencies  Legal
    Matters
     80




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##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Lease
    Obligations
      OperatingLeases(In thousands)Year Ending July 31,2010

$
3,9712011


2,3212012


1,9672013


2,0172014


2,077Thereafter


4,343Total minimum payments

$
16,696   Employee
    Agreements
    Warranties
  12-15 months
   81




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##### Table of Contents



ARUBA
    NETWORKS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      WarrantyAmount(In thousands)Balance as of July 31, 2007

$
85Provision


60Obligations fulfilled during period


(20
)Balance as of July 31, 2008

$
125Provision


256Obligations fulfilled during period


(223
)Balance as of July 31, 2009

$
158   Non-Cancelable
    Purchase Commitments
    Indemnification
   82




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rule 13a-15
    Internal
    Control Over Financial Reporting
  Report on Managements Assessment of Internal
    Control Over Financial Reporting Form 10-K.
  Changes
    in Internal Control over Financial Reporting
    ITEM 9B.
    OTHER
    INFORMATION   PART III ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    ITEM 11.
    EXECUTIVE
    COMPENSATION   83




---



##### Table of Contents



ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Financial Statements
            Financial Schedules Valuation and Qualifying Accounts
  Balance at








Balance atBeginning








End ofof Year


Additions


Deductions


Year(In thousands)Fiscal year ended July 31, 2007Allowance for doubtful accounts

$
352


$
199


$
(44
)

$
507Sales returns


273



286



(265
)


294Fiscal year ended July 31, 2008Allowance for doubtful accounts


507



283



(232
)


558Sales returns


294



473



(420
)


347Fiscal year ended July 31, 2009Allowance for doubtful accounts


558



138



(306
)


390Sales returns

$
347


$
972


$
(799
)

$
520     Exhibits.
 84




---



##### Table of Contents



SIGNATURES    ARUBA NETWORKS, INC.
  
  Dominic P. Orr
 President and Chief Executive Officer
  POWER OF
    ATTORNEY
  Form 10-K
    Signature

Title

Date/s/  Dominic
    P. OrrDominic
    P. Orr

President, Chief Executive Officer, and Chairman of the Board of
    Directors
    (Principal Executive Officer)

October 6, 2009/s/  Steffan
    TomlinsonSteffan
    Tomlinson

Chief Financial Officer (Principal Accounting and Financial
    Officer)

October 6, 2009/s/  Keerti
    MelkoteKeerti
    Melkote

Co-Founder, Chief Technology Officer and Director

October 6, 2009/s/  Bernard
    GuidonBernard
    Guidon

Director

October 6, 2009/s/  Emmanuel
    HernandezEmmanuel
    Hernandez

Director

October 6, 2009/s/  Michael
    R. KoureyMichael
    R. Kourey

Director

October 6, 2009/s/  Doug
    LeoneDoug
    Leone

Director

October 6, 2009/s/  Willem
    P. RoelandtsWillem
    P. Roelandts

Director

October 6, 2009/s/  Shirish
    S. SathayeShirish
    S. Sathaye

Director

October 6, 2009/s/  Daniel
    WarmenhovenDaniel
    Warmenhoven

Director

October 6, 2009  85




---



##### Table of Contents



EXHIBIT INDEX  Exhibit



Incorporated by Reference HereinNumber

Description

Form

Date2
.1*

Agreement and Plan of Reorganization, dated as of
    January 4, 2008

Current Report on Form 8-K

January 9, 20083
.1*

Restated Certificate of Incorporation of Registrant

Current Report on Form 8-K

April 5, 20073
.2*

Amended and Restated Bylaws of Registrant

Current Report on Form 8-K

February 17, 20094
.1*

Specimen common stock certificate

Registration Statement on Form S-l, as amended (File No.
    333-139419)

March 7, 20074
.2*

Amended and Restated Investors Rights Agreement, dated
    September 6, 2005

Registration Statement on Form S-l, as amended (File No.
    333-139419)

December 15, 200610
.1*

Form of Indemnification Agreement

Registration Statement on Form S-l, as amended (File No.
    333-139419)

March 7, 200710
.2*

AirWave Wireless, Inc. 2000 Stock Plan

Registration Statement on Form S-8 (File No. 333-149945)

March 28, 200810
.3A*

2002 Stock Plan of Registrant, as amended

Registration Statement on Form S-l, as amended (File No.
    333-139419)

January 24, 200710
.3B*

Forms of Stock Option Agreements under the 2002 Stock Plan

Registration Statement on Form S-l, as amended (File No.
    333-139419)

December 15, 200710
.4A*

2007 Equity Incentive Plan of Registrant as amended

Quarterly Report on Form 10-Q for the quarterly period ended
    October 31, 2008

December 10, 200810
.4B*

Forms of Stock Option Agreements under the 2007 Equity Incentive
    Plan

Registration Statement on Form S-l, as amended (File No.
    333-139419)

January 24, 200710
.4C*

2007 Equity Incentive Plan Form of Stock Option Agreement for
    Participants Outside the U.S.

Quarterly Report on Form 10-Q for the quarterly period ended
    January 31, 2009

March 12, 200910
.4D*

Form of Restricted Stock Unit Agreement under the 2007 Equity
    Incentive Plan

Quarterly Report on Form 10-Q for the quarterly period ended
    October 31, 2008

December 10, 200810
.4E*

Forms of Restricted Stock Unit Agreement under the 2007 Equity
    Incentive Plan

Quarterly Report on Form 10-Q for the quarterly period ended
    April 30, 2008

June 6, 200810
.5A*

Employee Stock Purchase Plan, amended and restated February 13,
    2009

Quarterly Report on Form 10-Q for the quarterly period ended
    January 31, 2009

March 12, 200910
.5B*

Form of Subscription Agreement under the Employee Stock Purchase
    Plan

Registration Statement on Form S-l, as amended (File No.
    333-139419)

January 24, 200710
.6*

Executive Employment Agreement, dated April 4, 2006, between
    Registrant and Dominic P. Orr

Registration Statement on Form S-l, as amended (File No.
    333-139419)

December 15, 200610
.7

Amendment to Executive Employment Agreement, dated December
    2008, between Registrant and Dominic P. Orr 86




---



##### Table of Contents



Exhibit



Incorporated by Reference HereinNumber

Description

Form

Date10
.8*

Employment offer letter, dated April 12, 2002, between
    Registrant and Keerti Melkote

Registration Statement on Form S-l, as amended (File No.
    333-139419)

December 15, 200610
.9*

Employment offer letter, dated July 18, 2006, between
    Registrant and Sriram Ramachandran

Registration Statement on Form S-l, as amended (File No.
    333-139419)

December 15, 200610
.10

Amendment to Offer Letter, dated December 2008, between
    Registrant and Sriram Ramachandran10
.11*

Employment offer letter, dated July 14, 2005, between
    Registrant and Steffan Tomlinson

Registration Statement on Form S-l, as amended (File No.
    333-139419)

December 15, 200610
.12

Amendment to Offer Letter, dated December 2008, between
    Registrant and Steffan Tomlinson10
.13*

Offer Letter to Hitesh Sheth, dated July 16, 2009

Current Report on Form 8-K

August 17, 200910
.14*

Standard Office Lease, dated as of November 30, 2007, for 1344
    Crossman Ave., Sunnyvale, California

Current Report on Form 8-K

December 6, 200710
.15

First Amendment to Lease, dated as of August 12, 2009, for 1344
    Crossman Ave., Sunnyvale, California10
.16*

Sublease Agreement, dated September 10, 2004, for 1322 Crossman
    Ave., Sunnyvale, California

Registration Statement on Form S-l, as amended (File No.
    333-139419)

December 15, 200610
.17

Lease Agreement dated as of September 22, 2009, for 1322
    Crossman Ave., Sunnyvale, California10
.18*

Flextronics Manufacturing Services Agreement, dated January 1,
    2005

Registration Statement on Form S-l, as amended (File No.
    333-139419)

January 24, 200710
.19*

Technology License Agreement, dated October 20, 2005, between
    Registrant and Atheros Communications, Inc.

Registration Statement on Form S-l, as amended (File No.
    333-139419)

March 20, 200710
.20*

Software License Agreement, dated January 11, 2006, between
    Registrant and Broadcom Corporation

Registration Statement on Form S-l, as amended (File No.
    333-139419)

January 24, 200710
.21*

OEM Supply Agreement, dated March 18, 2005, between Registrant
    and Alcatel Internetworking, Inc.

Registration Statement on Form S-l, as amended (File No.
    333-139419)

March 26, 200710
.22*

Amendment No. 1 to OEM Supply Agreement, dated August 31, 2006,
    between Registrant and Alcatel Internetworking, Inc.

Registration Statement on Form S-l, as amended (File No.
    333-139419)

March 26, 2007 87




---



##### Table of Contents



Exhibit



Incorporated by Reference HereinNumber

Description

Form

Date10
.23*

Master Purchase Agreement, dated as of January 16, 2006, between
    Registrant and Raza Microelectronics, Inc. (RMI)

Quarterly Report on Form 10-Q for the quarterly period ended
    January 31, 2009

March 12, 200910
.24*

First Amendment to Master Purchase Agreement, dated as of
    February 26, 2007, by and between Registrant and RMI

Quarterly Report on Form 10-Q for the quarterly period ended
    January 31, 2009

March 12, 200921
.1

List of subsidiaries of Registrant23
.1

Consent of PricewaterhouseCoopers LLP, Independent Registered
    Public Accounting Firm24
.1

Power of Attorney (incorporated by reference to the signature
    page of this Annual Report on Form 10-K)31
.1

Certification of Chief Executive Officer pursuant to Exchange
    Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act31
.2

Certification of Chief Financial Officer pursuant to Exchange
    Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act32
.1

Certifications of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act     *
    
    Previously filed.
    
    Confidential treatment has been requested for portions of this
    exhibit.
    
    Indicates management compensatory plan, contract or arrangement. 88