The Masters Golf tournament kicks off at the end of this week and the event has done a great job of enabling viewers to watch and experience the event over mobile devices. Should this be a surprise? Of course not - as we live in a mobile centric world and the Masters is capitalizing on that trend. We want to stream TV, watch movies, play games and interact with people when we want to and the mobile device is the conduit to that. That’s one of the reasons why enterprise mobility is about as a hot as Jordan Spieth was at the end of the 2015 PGA season.
Because of this, WiFi has been one of the biggest drivers of network upgrades over the past few years. ZK Research predicts that the business WiFi market will grow at a CAGR of 14% over the next five years. Another trend that’s about as obvious as “Adam Scott is playing well going into the Masters” is that wireless is rapidly becoming the primary access network. Years ago, wired was the king and WiFi augmented it.
Now WiFi rules as we’re connecting phones, tablets, cameras and IoT devices to the WiFi network. It still needs to connect back to a rock solid network but WiFi is the lead. This is one of the reasons why vendors have either gone to market with a unified offering (Cisco, Avaya, Extreme) or are doing so through some kind of partnership. Last year HP acquired Aruba Networks (or Aruba acquired HP networking if you believe Dominic Orr) to build a unified solution.
Today, Brocade announced a definitive agreement to acquire Ruckus Wireless, one of the few remaining wireless pure-play vendors for $1.2 billion. Ruckus sells to both enterprises and service providers and has both on premises and cloud managed WiFi solutions. Ruckus is best known for strong premises based products but last year acquired Cloudpath Networks to beef up its cloud managed solution.
For Brocade, the acquisition makes sense. Since its Foundry days, the networking division at Brocade has played musical chairs with its WiFi partners over the years and has had partnerships with Motorola, Meru Networks, Aruba, Aerohive and Ruckus. Brocade sells to a very technical buyer that is willing to take the time to do product bake offs. Selling via partnership can have its challenges as Brocade may need certain features that’s its not able to get from the partner due to the road maps being different.
Now it will own the wireless infrastructure itself and Brocade can plot its own course. Also, like Ruckus, Brocade sells to both enterprises and service providers so Ruckus will help bolster its position in both segments. Frankly, Brocade having its own WiFi solution is long overdue.
I like the timing of the deal as well as the E-Rate bids for 2016 were due in on April 1so there should be a big chunk of business coming from the K-12 vertical to help Brocade recoup its $1.2 billion investment. For Brocade, the acquisition is a smart one and will enable the company to participate in mobility lead network upgrades.
Another interesting element of this acquisition is the fate of Aerohive Network, the lone remaining WiFi pure-play. There are currently three wired vendors, Juniper Networks, Alcatel Lucent Enterprise (ALE) and Dell that OEM or resell some combination of Aruba/HP, Ruckus or Aerohive. There’s obviously vendor consolidation in the works and it would make sense for one of the three to pluck off Aerohive before the music stops.
It’s possible that Dell or ALE, which has the deep pockets of its parent company, Hauxin, may choose to purchase Extreme Networks, which has an excellent wireless solution as well as a robust wired portfolio that includes both campus and data center products. However, that still leaves not enough WiFi vendors to meet the needs of all the wired solution providers. It will certainly be interesting to see how the market shakes out from here.
I’m a big believer that digital transformation must be an IT led initiative with the network playing a key role. WiFi not only provides network access but also rich contextual data that can be analyzed and used to create differentiated experiences. Because of this, WiFi should be considered the basis of competitive advantage in the digital era. Brocade’s acquisition of Ruckus lets it jump into this market with both feet now.