Brocade Communications, a maker of networking gear, is buying Ruckus Wireless, a company with a fast-growing Wi-Fi product roster, for roughly $1.5 billion in cash and stock.
San Jose-based Brocade (BRCD) competes with networking giant Cisco (CSCO) Systems and Hewlett Packard Enterprise (HPE). It makes switches and routers that big companies use in their own data centers and server rooms as well as storage-area networking, providing fast links between data storage and servers.
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With the Ruckus brand, Brocade gets a bigger foothold (at least for the near term) in wireless connectivity because Ruckus (RKUS) builds equipment enabling Wi-Fi “hotspots,” which have pretty much become ubiquitous at sites from pro sports stadiums to New York’s Times Square.
Those wireless connections require a significant networking infrastructure of the type that Ruckus (along with Extreme Networks (EXTR) and Cisco) provides.
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In similar deals, Cisco bought Meraki, a Wi-Fi specialist, three years ago for $1.2 billion in cash and last year. HP bought Aruba for $3 billion
Longer term, the acquisition also help Brocade speed up the deployment of its gear with service provider partners ranging from big cloud providers like Google (GOOG) to telecoms—not to mention large corporations and government agencies that view themselves as service providers to their own employees, Brocade chief marketing officer Christine Heckart told Fortune. Note: Ruckus is already working with Google on a cloud-based wireless networking effort. It’s also working with a consortium of companies including Qualcomm (QCOM) on the recently launched and somewhat controversial LinkNYC wireless network in New York City.
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As both companies were already working to virtualize their respective networking gear, the deal could help the merged entity speed up the virtualization of networks from the core data center through the network’s edge. A virtualized network combines hardware and software into a unit that can be managed and administered via software—so much so that capability and system changes can be accomplished through re-programming, not massive hardware updates.
In this transaction, Ruckus shareholders will get $6.45 in cash and 0.75 shares of Brocade common stock, according to the Brocade release.
This story was updated at 10:45 a.m. EDT to add mention of Ruckus’ work with LinkNYC and again at 3:21 p.m. to add mention of HP’s Aruba purchase. This story was updated again at 10:10 a.m. April 5 to add that Ruckus’ partners in LinkNYC include Qualcomm but not Google.
