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Brocade Buys Ruckus to Boost Next-Gen Wireless Reach

April 5th, 2016 by Mark Daly in Industry News No Comments »
Brocade Buys Ruckus to Boost Next-Gen Wireless Reach ilicomm Technology Solutions

The deal will speed up network virtualization play and wireless adoption, Brocade says.

Brocade Communications, a maker of networking gear, is buying Ruckus Wireless, a company with a fast-growing Wi-Fi product roster, for roughly $1.5 billion in cash and stock.

San Jose-based Brocade BRCD 1.63% competes with networking giant Cisco CSCO -2.10% Systems and Hewlett Packard Enterprise HPE -2.22% . It makes switches and routers that big companies use in their own data centers and server rooms as well as storage-area networking, providing fast links between data storage and servers.

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With the Ruckus brand, Brocade gets a bigger foothold (at least for the near term) in wireless connectivity because Ruckus RKUS 0.76% builds equipment enabling Wi-Fi “hotspots,” which have pretty much become ubiquitous at sites from pro sports stadiums to New York’s Times Square.

Those wireless connections require a significant networking infrastructure of the type that Ruckus (along with Extreme Networks EXTR -1.92% and Cisco) provides.

For more about Google entering the wireless carrier market, watch:

In similar deals, Cisco bought Meraki, a Wi-Fi specialist, three years ago for $1.2 billion in cash and last year. HP bought Aruba for $3 billion

Longer term, the acquisition also help Brocade speed up the deployment of its gear with service provider partners ranging from big cloud providers like Google GOOG -0.98% to telecoms—not to mention large corporations and government agencies that view themselves as service providers to their own employees, Brocade chief marketing officer Christine Heckart toldFortune. Note: Ruckus is already working with Google on a cloud-based wireless networking effort that underlies therecently launched and somewhat controversial LinkNYCwireless network in New York City.

Read more: Why Cisco and Ericsson are teaming up

As both companies were already working to virtualize their respective networking gear, the deal could help the merged entity speed up the virtualization of networks from the core data center through the network’s edge. A virtualized network combines hardware and software into a unit that can be managed and administered via software—so much so that capability and system changes can be accomplished through re-programming, not massive hardware updates.

In this transaction, Ruckus shareholders will get $6.45 in cash and 0.75 shares of Brocade common stock, according to the Brocade release.

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