Looks like the “dog” has a new owner. Wi-Fi OEM standout Ruckus Wireless has been acquired by Brocade, an enterprise data networking solutions giant, in a cash and stock transaction valued at $1.5 billion.
Brocade’s acquisition of Ruckus came as a surprise to some in the industry like Joe Madden, principal analyst at Mobile Experts, because Brocade comes out of the storage networking market and has little connection to the wireless market.
The much larger Brocade has 4,700 employees in 148 countries and $2 billion in annual revenue. Its products begin at the data center and move out toward the edge of the network, including storage networking, switching and routers, software-based virtualization and control, analytics and mobile networking.
Founded in 2004, Ruckus Wireless has more than 1,000 employees in 38 countries and $370 million in annual revenue. It is one of the top OEMs in enterprise wireless LANs, as well as Wi-Fi. When the deal closes, the Ruckus organization will be led by current Ruckus CEO, Selina Lo, who will report directly to Brocade CEO, Lloyd Carney.
“Ruckus has some excellent traction in the public Wi-Fi market, both with enterprises and with carriers, and they have some interesting new small cells using LTE,” Madden said. “The acquisition will help Brocade with a toe-hold in the mobile market, and the combined company will clearly try to combine the wireless networking products with storage networking to address low-latency networks in the future.”
Ruckus’ wireless networking solutions will add a high-growth and complementary product category to Brocade’s product line, according to Carney. The combined company will provide networking solutions that extend from the storage networks to customers’ data center, campus and wireless edge.
“Ruckus is an excellent strategic fit. Wireless is a critical access technology for new IP networks, a natural extension of our portfolio,” he said during the press conference announcing the acquisition. “Further, Wi-Fi technology for localized service access and cellular technology for wide-area networking are converging with network programmability and function virtualization, playing a key role in defining network architectures of the future.”
The acquisition is expected to immediately expand Brocade’s total addressable market by $5 billion, with additional expansion as the OpenG in-building cellular coverage and capacity product evolves, according to Carney. Ruckus demonstrated OpenG at this year’s Mobile World Congress in collaboration with Qualcomm. It combines coordinated shared spectrum, such as 3.5 GHz, with neutral host-capable small cells to enable in-building cellular coverage.
“The combined company would realize significant product and market synergies that are expected to accelerate Brocade’s revenue and earnings growth,” he wrote in his blog. “It also aligns very well with both companies’ mobile strategies and positions us to win in emerging opportunities like 5G services, Internet of Things and smart cities.”