Arris CEO Bruce McClelland shed a few more details about how the company’s proposed $800 million acquisition of Brocade’s Ruckus Wireless and ICX switch will fit into future product roadmaps.
Speaking today at Arris’s investor day in New York, McClelland said the company is already exploring some ideas about how Ruckus’s wireless technology, typically used for enterprise and metro deployments, could fit into and extend the capabilities of Arris’s residential gateway products as well as in nodes that are deployed at the edges of the cable network.
McClelland said the node could be a great spot for cable operators to add WiFi coverage as well as 3.5 GHz wireless capabilities.
Ruckus currently uses DOCSIS technology in its access points from another party, so Arris will also look to weave its products into those portfolios as well, he said.
Additionally, the Ethernet switching platform that is coming way of the deal will help Arris extend into new areas of the service provider enterprise business that is not currently covered by Arris.
Overall, Arris is looking at how “one plus one equals a lot more than two” as the companies prepare to merge in the absence of many product overlaps. It’s hoping for the new acquisition to grow annually at 5% to 10% with “meaningful upside” for small cell deployments.
As for timing, Arris is still hopeful that the deal will close this summer. The acquisition is contingent on the closing of the current Broadcom-Brocade merger. Arris plans to add about 1,600 employees of the agreement and have the acquisition operate as a separate reporting segment within Arris under the Enterprise Networks label.
Arris also estimated that revenues from Ruckus will rebound to the range of $650 million to $700 million, well ahead of the $300 million to $325 million estimated for 2017, which has been impacted by uncertainty created by the Broadcom-Brocade deal.
The general theme of the day is that technology upgrade cycles continue to drive Arris’s business, with examples including the move by service providers to DOCSIS 3.1, G.fast, NG-PON, and next-gen WiFi and other wireless platforms.
Those upgrade cycles represent “what’s behind the growth in our business,” McClelland said, adding that expanding Arris’s international business is also a place for the company to gain more share.
Being more locally internationally is part of strategy. That’s a place for us to gain more share.”
Back to upgrade cycles, he said the one tied to DOCSIS 3.1 is “just getting started,” with scale of that business starting to ramp up in the second half of 2017.
Arris also offered 2017 guidance, expecting revenues of $ 6.6 billion to $6.8 billion, which is down from 2016 due in part to a slow start in Q1 2017.
Looking further ahead, into 2019, Arris expects the service provider business to remain steady, and continue to be a good cash-generator for the company.
How the virtualization of the set-top box also came up. Arris doesn’t expect that to have a big impact on its CPE business for service providers because it’s more focused on redistribution of that software functionality into the cloud to help accelerate the development and deployment of new features.
Despite the growing popularity of cloud DVR services, the overall architecture will likely continue to be a “hybrid” as service providers will still lean on some in-home storage for things like time-shifting and buffering of live TV, Larry Robinson, Arris’s president, CPE, said.
On the access network, Arris said it’s making progress with Gen2 upgrades to the E6000, its flagship converged cable access platform, that double the capacity density of the chassis itself. The Gen2 upstream card is out, and the downstream version is expected out by mid-year, Dan Whalen, president of Arris’s network and cloud unit, said. Operators will be able to turn up capacity using a low-touch licensing model.
He said Arris expects to start delivering distributed access products by the end of 2017 and into 2018 as MSOs explore architectures that move some of the electronics (including some space and power requirements) away from the headend and toward the edge of the network. Arris believes the E6000 can serve as a remote manager for those distributed elements.
As MSOs push fiber deeper, the node is poised to become “beach front property” as they are equipped to support wireless and PON-based solutions over time, Whalen said.
Arris is also working on full virtualized version of the CCAP, aiming for release in 2019.