Arris has opened up a new enterprise-focused business unit following its recently closed deal for the Ruckus Wireless and ICX Switch businesses from Brocade, but also sees some potential points of synergy with the residential components of its business.
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Arris on Monday offered an update on its business about two weeks after it acquired the Ruckus, and analysts wondered if it the company some revenue and technology synergies with respect to Arris’s CPE business and home WiFi, an area that has become of greater importance to cable operators and other service providers that work with the company.
Arris CEO Bruce McClelland acknowledged that there is a greater desire to build in more capable and extensive networking and wireless capabilities on the residential side of the broadband business.
There are no new residential products to discuss yet that would link in Ruckus, but “it’s definitely something that our teams are looking at.”
One potential area for more collaboration is 802.11ax, a new version of WiFi that will build in OFDMA capabilities from the cellular world along with other features, rather than trying to go back and revamp products that use older versions of WiFi.
He said Arris may look into how it can leverage investment on all sides, and perhaps create a common roadmap that addresses Arris’s enterprise, retail and service provider businesses. “Maybe there’s a tiered technology strategy or a variety of different approaches there,” McClelland said.
Dan Rabinovitsj, the new president of Ruckus Networks, noted that Ruckus did not pursue residential in part because the enterprise sector requires designs that can scale to higher densities and client counts and support a bigger range of features. However, some of Ruckus’s channel partners do dabble in residential by offering premium products for some homes that need technology capabilities that are akin to those of a small business.
“That’s where we start to see the lines blurring,” Rabinovitsj said, adding that there could be some opportunities to drive of that WiFi-related work into products like integrated wireless gateways.
Arris also provided a bigger overview of the company following its latest purchase.
One big change is a new reportable segment, called Enterprise Networks and led by Rabinovitsj, that operates alongside Arris’s CPE and Network and Cloud units. One difference is that Enterprise Networks will have its own product management and sales and marketing team focused on that channel. And it will retain the Ruckus brand.
In addition to carrying the new tagline of “Redefined Connectivity,” the portfolio of the newly combined version of Arris should be thought of differently now, McClelland said.
That portfolio now spans a Core, Growth and Emerging businesses.
Core is focused on large, mature markets where Arris already has a significant share in areas with regular upgrade cycles that fuel investment in new products. That includes areas like integrated CCAPs, set-tops and other CPE, and residential WiFi.
Growth, where investment will increase more rapidly, includes areas like enterprise managed services, smart cities, DOCSIS 3.1, the direct-to-consumer segment and upgrades to multi-gigabit Ethernet.
Emerging markets for Arris include next-gen PON platforms, CBRS technology, network virtualization and distributed access architectures, and Full Duplex DOCSIS.
Rabinovitsj noted that the wireless LAN market enjoys an 11.5% CAGR, but “our plan is to grow faster than the market, fueled by our leadership position in verticals that are growing fast such as managed services.”
“This trend will continue to grow as IT managers shift their attention away from managing networks to delivering applications and services,” he said.
Looking ahead Arris expects its Enterprise segment to bring in between $650 million to $700 million of sales in 2-18, and earnings of 23 cents to 31 cents per share.
“While most of our discussion today has been around products and technology and markets, this acquisition is really about people and knowhow,” McClelland said.
Still, a portion of the discussion focused on the opportunities in the CBRS spectrum band.
For its part, Ruckus is focusing on that with a product area it calls “OpenG.”
Rabinovitsj said chips for the infrastructure end of CBRS have been out for some time, as they typically lead the way before silicon for smartphones and tablets emerge. However, some devices that will work in the 3.5GHz segment have already appeared for the Japanese market.
For now, Ruckus is testing CBRS using off-the-shelf smartphones that are being used outside the U.S. McClelland pointed out that Arris sees early CBRS activity around fixed mobile broadband access with a gateway serving as the client device.