Brocade-Ruckus union backed by partners

Channel partners say $1.5bn marriage speaks to need for vendors and resellers to offer a complete wired and wireless networking solution

Partners have backed Brocade's acquisition of Ruckus, saying it plays to the increasing need for them to provide a complete wired and wireless network solution to customers.

Storage vendor Brocade entered into a definitive agreement to acquire wireless networking specialist Ruckus for $1.5bn (£1bn) this week. Ruckus will continue to be led by current CEO Selina Lo, who will report directly to Brocade CEO Lloyd Carney.

This is the latest in a spate of wireless acquisitions in the past few years, including HP acquiring Aruba for $3bn last May, Meru being snapped up by Fortinet for $44m in the same month and Cisco acquiring Meraki for $1.2bn in 2012.

Jonathan Lassman, director of storage reseller Epaton, said the deal is a logical one for Brocade, which moved into the wired networking market in 2008 through its $3bn acquisition of Foundry.

"I think vendors need to have a total solutions offering and a switch reseller without a wireless offering now doesn't make total sense," Lassman said.

"So I think there will be more consolidation; there are other wireless vendors out there still who haven't been acquired, and I think they will be next. I think it is a good move for both Brocade and Ruckus."

According to recent data from IDC, NYSE-listed Ruckus holds around a seven per cent share of the global enterprise wireless LAN market. It claims to have more than 65,000 customers.

Murray Pearce, co-managing director at Ruckus distributor Infinigate, said he sees the acquisition as a positive move for Ruckus.

"We have been working with them for a long time and it's great to see that they've found someone to acquire their business," he said. "We are really interested in seeing what they will do.

"We have a strong relationship with Ruckus and usually when people get acquired they want to have strong regional representation. Infinigate is a strong regional player for Ruckus so I would hope that it translates into the opportunity to expand the relationship."

Brocade reseller IP Performance's senior research engineer, Duncan Ross, was surprised by the deal and the new direction for Brocade.

"But it could be useful for Brocade," he added. "The move does make sense as a lot of other larger vendors are acquiring the smaller wireless companies so this allows Brocade to compete with them."

NASDAQ-listed Brocade claimed deal - which is set to close in Q3 of 2016 - will mean it is the number-one player in service provider WiFi, as well as the number-three player in enterprise wireless LAN.

"We operate in adjacent segments of the larger networking market with a number of common customers for our complementary products, and have a successful track record of working together," said Lo. "We are excited for the opportunity to join the Brocade team and to jointly deliver innovative, value-added solutions to our enterprise and service provider customers."