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Brocade's Ruckus buy betters chances in campus WLAN market

Brocade's acquisition of Ruckus Wireless would counter the stronger portfolios of Cisco and HPE for the campus WLAN.

Networking company Brocade Communications Systems Inc. has agreed to acquire Ruckus Wireless Inc. for $1.2 billion, a move that would fill a hole in the Brocade product portfolio that competes with Cisco and Hewlett Packard Enterprise.

Brocade announced this week the acquisition of Ruckus, which sells access points and management systems for Wi-Fi networks. The transaction is expected to close by the end of July. The $1.2 billion is minus cash acquired by Brocade.

Cisco and HPE have extensive wireless portfolios stemming from the acquisitions of Meraki and Aruba, respectively. Brocade's purchase of Ruckus counters the advantages the rivals had with products stretching from the data center to the campus WLAN, or wireless LAN.

Brocade's competitors have consolidated their portfolios with a "cohesive offering around policies, security, [and] single-pane-of-glass management of the wired edge and the Wi-Fi edge," said Jason Nolet, senior vice president of Brocade's switching, routing and analytics group.

"We have the same ambition," he said.

Brocade's portfolio gap

Without Ruckus, Brocade has a hole in its networking portfolio that has sent customers to other vendors for access points and other wireless technology used in the campus WLAN, said Mark Hung, an analyst at Gartner.

Brocade lacked a viable wireless offering. Not having wireless products in their portfolio is becoming a bigger and bigger hole.
Mark Hunganalyst at Gartner

"Brocade lacked a viable wireless offering," Hung said. "Not having wireless products in their portfolio is becoming a bigger and bigger hole."

Despite the acquisition, Brocade plans to continue supporting Ruckus customers with competitors' networking gear, Nolet said. Brocade also doesn't plan to change support for companies that use its products with non-Ruckus Wi-Fi technology.

"If you're a customer, and you made that investment, we're going to stand behind that investment," Nolet said.

At a minimum, Brocade will support interoperability between the different products. However, the "depth of integration" will be greater when combining Brocade with Ruckus, Nolet said.

Today, potential customers see Brocade as a provider of data center and storage networking. Without wireless technology, Brocade has had difficulty selling its switches for use in companies' campus WLAN, said Nolan Greene, an analyst at IDC.

"Acquiring a reputable player in the WLAN space can be of great benefit in furthering those campus inroads," Greene said.

Ruckus' enterprise penetration limited

Even with Ruckus, Brocade's ability to penetrate the campus WLAN and wired market is not a sure thing. Ruckus is strongest among organizations in education, hospitality or manufacturing, Gartner said in a September 2015 Magic Quadrant report. The vendor is not often seen "on the shortlist for enterprise deployments."

Ruckus gear is often used in large-scale deployments. The vendor's customers include the Los Angeles Angels of Anaheim's stadium, the Time Warner Cable Arena in Charlotte, N.C., and the Marriott Group.

Companies most likely to be affected by the acquisition are those that bought into the partnership between Ruckus and Brocade competitor Juniper Networks. "They may see fewer partner benefits down the road," Greene said.

Following the acquisition, Ruckus CEO Selina Lo will lead the wireless organization within Brocade. Lo will report directly to Brocade CEO Lloyd Carney.

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