Integration of Wi-Fi is critical to meet growing demand
Brocade’s (BRCD) acquisition of Ruckus (RKUS) will strengthen its ability to pursue opportunities in the emerging markets (EEM) such as India (INDA) and China (FXI) around 5G mobile services, Internet of Things (or IoT), Smart Cities, and LTE/Wi-Fi convergence. The companies believe that the integration of Wi-Fi and the use of shared access or lightly incensed spectrum are critical to meeting the ever-rising demand for coverage, capacity, and consistency required for next generation mobile services.
The below chart shows the diverse and exponential growth potential in the IoT space. Semiconductor heavyweights such as Intel (INTC) and Micron (MU) are also banking on the IoT segment to drive revenues in the future.
Need for an underlying network architecture
There is a growing need for an underlying network architecture as enterprises move to digitize their businesses. According to Brocade’s press release, “Wireless is a critical access technology and the combination of Brocade and Ruckus creates a new type of pure-play networking company, with solutions spanning from the heart of the data center to the wireless network edge.”
The acquisition is also expected to accelerate cross-selling activities into the respective companies’ customer bases. This will open up new revenue streams for the combined company across a variety of verticals including large enterprises, higher education, hospitality, and others.