Brocade's $1.2 billion buyout of Ruckus Wireless, announced today, could provide a formidable alternative to giants like Cisco Systems (Meraki) and Hewlett Packard Enterprise (Aruba) across a range of networking markets -- particularly in the service provider segment.
Customers will gain "networking solutions that extend from your storage networks to your data center, campus, and wireless edge," Brocade and Ruckus said. On the partner program front, the two companies are not planning any near-term changes. "Over time, we expect the combination of our two companies will bring our collective partners greater opportunities to offer a broader portfolio of both wired and wireless networking solutions," the duo said.
Take a closer look at the Brocade-Ruckus deal and it unites the No. 1 networking players in each of the following markets, the companies claim:
- storage area networking
- service provider Wi-Fi
- hospitality Wi-Fi
Also, the combined companies will be No. 2 in data center networking, No. 3 in the enterprise wireless LAN space, and No. 3 in the enterprise edge networking in the U.S. and EMEA. (However, the two companies didn't disclose the sources for those rankings.)
Still, Brocade and Ruckus will face plenty of intense competition from Cisco Systems and HP Enterprise, among other players. The Brocade-Ruckus deal is expected to close in Brocade's Q3 2016, but the deal's value could fluctuate since a portion of the transaction involves stock rather than cash.
Also, the Brocade-Ruckus deal involves mixed growth stories. For its Q1 ended January 30, 2016, Brocade's revenues were $574.3 million, down slightly from $576.2 million in Q1 2015. In stark contrast, Ruckus's Q4 2015 results rose a strong 16.6 percent to $100.1 million.
Bottom line? Ruckus potentially gives Brocade a stronger growth story -- if the combined companies can properly manage culture, R&D and partner engagements... along with heated competition from Cisco Systems and HP Enterprise.