& cplSiteName &

Arris Reels in Ruckus – Why I Like This Deal

Mari Silbey
12/1/2017
50%
50%

Arris isn't a household name, and its $800 million acquisition of Ruckus Wireless and the ICX Switch business from Broadcom -- which closed today -- hardly even registers on the M&A watch list compared to megadeals like AT&T's $85 billion proposal to buy Time Warner or Broadcom's $105 billion hostile bid to take over Qualcomm.

However, that doesn't mean the Arris Group Inc. (Nasdaq: ARRS) deal is unimportant. (See Arris Completes Acquisition of Ruckus, ICX Switch Business.)

Quite the contrary. I expect the deal to have an outsize impact on the industry, both because of where Arris has been as a company, and where the communications sector as a whole is headed.

Arris CEO Bruce McClelland talks with Ruckus Networks President Dan Rabinovitsj in an Arris video interview.
Arris CEO Bruce McClelland talks with Ruckus Networks President Dan Rabinovitsj in an Arris video interview.

The investment community has pointed out the risks of Arris entering both a new technology domain (wireless) and a new customer market (the enterprise) at the same time. (See Is Ruckus Right for Arris?)

But that doesn't take into account the fact that these specific technologies and customer markets are converging already. The current deal-making between the wireline and wireless sectors illustrates as much, as does the trend toward cloudification, which is drawing the aims of the enterprise and the aims of network operators ever closer together. On the technology side, Arris is inoculating itself against obsolescence by combining new wireless expertise from Ruckus with its own wireline technology and workforce. On the customer side, the company is bridging two industries that are already starting to develop a joint ecosystem. (Telecom Infra Project (TIP) , anyone?)

Better that Arris make that move now than wait until its competitors try to do the same.

And let's talk about that enterprise market for a moment.

It may seem odd for Arris to extend itself beyond the network operator industry when it has been so successful with that customer audience, but if you think about it, that's exactly what Arris' customers are doing. Pay-TV operators are using commercial services to offset losses in their traditional video business. And likewise, Arris is looking to balance inevitable declines in the video set-top sector -- where it still brings in the bulk of its revenue -- with enterprise networking growth.

Further, while Ruckus gives Arris a jumpstart into the enterprise market from an existing customer perspective, the technology Arris gains from the deal also lets the company make use of another inherent advantage that it wouldn't otherwise be able to leverage. Namely, with the Ruckus product portfolio in house, Arris can now try to tag along with its operator customers as they continue to build up their own enterprise relationships. What better way to stimulate growth than by entering into an industry where your existing customers can also provide a new sales channel?

To be sure, how well Arris succeeds with its new assets will depend entirely on execution, but it would be silly to underestimate the potential here.

As CEO Bruce McClelland says in an Arris video interview, "The vision is we're going to become one of the largest technology companies providing technology and services to both carriers and enterprise. We have a huge runway ahead of us in that area."

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
More Blogs from MariNation
Why Comcast would still come out a winner even if it split a deal for Fox with Disney.
An infrastructure bill without public/private partnerships? Sad!
It's not just because Amazon has a lot of cash.
Forget back to school. Let's get back to TV with a rush of fall industry updates.
Featured Video
From The Founder
Light Reading founder Steve Saunders grills Cisco's Roland Acra on how he's bringing automation to life inside the data center.
Flash Poll
Upcoming Live Events
March 20-22, 2018, Denver Marriott Tech Center
April 4, 2018, The Westin Dallas Downtown, Dallas
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
Infographics
SmartNICs aren't just about achieving scale. They also have a major impact in reducing CAPEX and OPEX requirements.
Hot Topics
The Anatomy of Automation: Q&A With Cisco's Roland Acra
Steve Saunders, Founder, Light Reading, 12/7/2017
Here's Pai in Your Eye
Alan Breznick, Cable/Video Practice Leader, Light Reading, 12/11/2017
Netflix Evaluating AI for Personalized Trailers
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 12/8/2017
You Can't Fix OTT Streaming Problems If You Can't See Them
Mike Hollyman, Head of Consulting Engineering, Nokia Deepfield, 12/8/2017
Animals with Phones
We're Gonna Need More Treats Click Here
You spent how much on this thing?!
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed