Seeking to move aggressively into the enterprise sector, Arris has set up a new division incorporating the Ruckus Wireless and ICX Switch businesses that it bought from Brocade and will pursue a wide range of businesses, institutions and public agencies.
Speaking on a conference call with reporters and analysts Thursday morning, Arris Group Inc. (Nasdaq: ARRS) executives said the new division, known as Enterprise Networks, will join Arris’s two existing units -- Customer Premises Equipment and Network & Cloud. But, unlike those two legacy divisions, Enterprise Networks will have its own dedicated product management and sales and marketing team. It will also keep the Ruckus name, being branded as Ruckus Networks, and be headed by Dan Rabinovitsj, the former COO of Ruckus Wireless. (See Arris CEO: Software Isn't Everything.)
Rabinovitsj stressed that both the wireless LAN and Ethernet switching markets represent promising opportunities for his new division, especially with the WLAN market exploding at a 11.5% compound annual growth rate.
"Our plan is to grow faster than the market, fueled by our leadership position in verticals that are growing fast, such as managed services," he said. "This trend will continue to grow as IT managers shift their attention away from managing networks to delivering applications and services."
In particular, Rabinovitsj sees great promise for deploying the latest version of WiFi technology, 802.11ax, to both enterprise and residential customers, starting next year. With a goal of "bringing broadband Internet to the next billion users," he sees 802.11ax offering multi-gigabit service around the world, including in such emerging markets as Africa, India and Southeast Asia. "WiFi is the clear technology winner for emerging markets," he said.
With Ruckus Wireless and ICX Switch finally under its belt after months of delays, Arris expects its new enterprise unit to rake in between $650 million to $700 million in revenue next year, with earnings of 23 cents to 31 cents per share. The unit is expected to add about $40 million to the company's 2017 sales.
Besides highlighting their new enterprise division, Arris executives presented a new vision of the company's "path to growth." Using their new tagline of "Redefined Connectivity," they said that path consists of three elements -- core, growth and emerging markets.
The core area covers the large, mature markets where Arris already enjoys a hefty presence and benefits from regular upgrade cycles that fuel investment in new products. These includes products like integrated CCAP devices, set-top boxes, cable modems, other CPE and residential WiFi.
Growth markets are areas where Arris expects investment to go up more rapidly. These include such markets as enterprise managed services, smart cities, DOCSIS 3.1, direct-to-consumer and multi-gigabit Ethernet.
Lastly, Arris views emerging markets as the ones with the most promise further down the line, including next-gen PON platforms, CBRS technology, IP multicast video, network virtualization, distributed access architectures, Full Duplex DOCSIS and IoT.
Bringing Ruckus home
While the call's emphasis was on enterprise services and new markets, Arris officials also discussed some potential points of synergy with the core residential side of their business. Arris CEO Bruce McClelland said the company is exploring how to put better, more extensive networking and wireless capabilities into its residential products in response to rising demand from its cable and telco customers. Although there are no new residential products linked to Ruckus yet, he said, "it's definitely something that our teams are looking at."
Arris officials noted that one potential area for collaboration between the company's units is the new 802.11ax WiFi technology. This new version of WiFi will bake in OFDMA capabilities and other notable features from cellular technology.
Separately this morning, Arris announced the introduction of two new broadband gateway devices designed for PON and fixed wireless broadband deployments. The first device, known as the NVG578, is a PON gateway that supports GPON today but can also work with next-gen XGS-PON and NG-PON2 platforms offering speeds of up to 10 Gbit/s.
The second product, called the NVG558, is a fixed wireless broadband gateway. It can support voice, video and data services through an integration of 4G LTE and 3.5GHz CBRS technologies, as well as potentially future 5G services.
Both gateways also support Arris HomeAssure, which is designed to extend WiFi coverage throughout the home and simplify the experience. The company said both products should go into customer trials in the first quarter of next year, with general availability to follow by the end of June.
— Alan Breznick, Cable/Video Practice Leader, Light Reading