Bruce McClelland, Arris’s new CEO, believes the company’s $800 million play for Brocade’s Ruckus Wireless and ICX switch business represents a critical, defining moment in the company’s history as many of its customers continue to pivot into wireless and mobile services.
“If I’m right, I think we’ll look back at this five years from now and say, ‘Gosh, that was a great move,’” McClelland said, holding that many of Arris’s service provider customers are poised to invest significantly around wireless going forward.
“It could take a variety of different forms, but I think at the end of the day they’re all going to be wireless operators,” said McClelland, whose key customers include Comcast and Charter Communications.
The acquisition, he said, will allow Arris to expand and amplify its wireless aims, as it will thrust Arris into a new addressable market and complement customer moves into wireless.
“In my mind, it’s a pretty big deal,” McClelland said of the proposed deal.
Arris has been reselling and providing support for Ruckus’s portfolio for years, and has represented one of Ruckus’s largest channel partners. McClelland believes there’s a lot more to come.
“It has not been a huge portfolio contributor, but it’s meaningful,” he said. “And it’s been an important strategic part of what our customers have been doing.”
McClelland sees cable operators and its other service provider customers taking advantage of the big fiber investments they’ve made to connect enterprise customers to wireless services and continue to feed their growing business services initiatives.
He said support for small cell infrastructures tied into a “neutral host” model that can support traffic and services for multiple mobile carriers will play a big role in that.
Building and investing in wireless systems that enhance coverage in a building for a sole operator is “complex and expensive,” McClelland said.
A neutral-host capability combined with Citizens Broadband Radio Service shared spectrum, “is going to be a big catalyst to a change in the way that cellular coverage is deployed,” he added. “And, again, if we’re right, it could be a pretty big deal.”
Time will tell how the pending acquisition will fit into Arris’s strategy around 5G, which McClelland and others see taking shape first as a point-to-point, fixed broadband access technology before shifting into mobility and other use-cases.
“Where I think we’ll focus near term is more around how we can augment capacity for mobile [versus] a broadband last mile replacement technology,” he said. “We'll want to intersect more quickly on augmenting capacity for standard LTE mobile applications."
Arris’s pending acquisition hinges on the closing of the Broadcom-Brocade merger, which could happen this May or June. Arris will still need regulatory approval, but expects that it can wrap up its deal about a month after the Broadcom and Brocade close theirs.