Cable supplier Arris has added Ruckus Wireless to its portfolio, finalizing a deal which began in February in the fall-out from Broadcom’s purchase of Brocade. This is one of a rising number of M&A transactions which reflect the increasing integration of wireless and wireline networks and service providers. Indeed, Arris could benefit by pursuing the convergence strategy which Ruckus kicked off as an independent, and which promised to deliver strong results for Brocade, after it acquired the carrier WiFi specialist.
Although that deal showed Brocade expanding from its enterprise networking roots into the wireless operator space, it did not have time to bear fruit since Brocade was itself snapped up by Broadcom, an acquisition which was completed last month. The completion meant that follow-on deals, for the sale of assets which Broadcom did not regard as strategic, could be activated too, including Arris’s purchase of Ruckus and Mavenir’s of Brocade’s virtualized packet core unit (based on its takeover of Connectem).
Arris can now add WiFi and Lan switching, and some fledgling cellular elements, to its cable offerings. It is creating a new enterprise networks business unit to house Ruckus, under the leadership of the latter’s former COO, Dan Rabinovitsj. But it will be more important for Arris to use its new subsidiary to bolster its position in the cable market, before it starts eyeing new pastures.
Ruckus already has strong relationships with cablecos, particularly in the US, having supported their mounting efforts to add wireless services to their broadband and video offerings, by deploying large numbers of WiFi homespots and hotspots.
“This combination underscores our shared vision of achieving market leadership across wireless and wired networks in close partnership with our valued customers and channel partners,” Rabinovitsj said in a statement. “We’re very excited about the collaboration opportunities across our product portfolios to enable connectivity from the office to the home and to all the places in between. Joining Arris means we still do what Ruckus does best, but on a larger, global scale.”
Arris will gain 1,700 employees from Ruckus and from another Brocade unit it is buying, ICX Switch Business. Arris CEO Bruce McClelland said: “Ruckus’ unmatched expertise in wireless and wired networking perfectly complements our growth strategy of driving towards a constantly connected, mobile future. The acquisition brings diversification to our portfolio, building on our strength in networking and helping us to serve new verticals.”
Arris’s core cableco customers are moving quickly to adopt WiFi-first and cellular MVNO deals to support quad play services, and McClelland was telling investors back in 2015 that he wanted his firm to “become one of the major names in tech going forward”, adding: “I think wireless is a natural adjacency and there are certainly technologies we have that allow us to grow into that if that becomes a big segment … but when you get into the managed wireless cellular space, there’s a lot of very specialized technology there that we don’t have today so that would be something we’d probably have to go get.”
That prompted speculation, after the Brocade/Broadcom announcement, that Ruckus would fit the bill nicely, boosting Arris on the WiFi side and also bringing expertise in cellular networks, since it has been expanding its portfolio into 4G with a vision of converged WiFi/cellular leading towards 5G.
Arris already resells Ruckus kit and the two companies have a joint project with Nascar in the US, and they also partnered with Aptilo and Benu Networks in 2015 to launch a carrier WiFi solution for smaller businesses, apartment blocks and campuses.