Extreme Networks to acquire brand cache with Zebra WLAN acquisition

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Walmart, TJ Max, Marriott, Hilton, Coca Cola, FedEx and UPS are just some of the brands that Extreme Networks will pick up as part of its acquisition of Zebra Technologies’ WLAN business.

The $55 million acquisition will create new growth opportunities in two vertical markets – retail and transportation/logistics – and expands its reach further into the hospitality and manufacturing verticals. The transaction is expected to close in the fourth quarter of 2016.

“We’re really excited about this,” Ed Meyercord, president and CEO of Extreme Networks, said during a conference call with analysts on Wednesday. “Doors are opening” and the company is expanding its presence in the fastest-growing segment of the networking industry.

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Meyercord said the company at this time isn’t providing the total number of customers it is acquiring from Zebra. As part of the company’s presentation, it included more than 40 logos in one of the slides listing clients. The combined Extreme/Zebra WLAN business will end up being the third largest provider in its combined target markets, after Cisco and HPE, and fourth largest by market share.

But it's not expecting a repeat of what happened when Extreme acquired Enterasys Networks in 2013, which Meyercord described as more of a merger and one where the companies’ cultures were very different. That acquisition came with a lot of integration issues and technology debates about the R&D roadmap when that occurred, according to Meyercord. That’s not expected this time around.

Zebra acquired a great deal of WLAN expertise when it bought Motorola Solutions’ Enterprise business in 2014 for $3.45 billion in cash. Zebra’s AirDefense Security & Compliance solution includes 24x7 wireless monitoring tools that allow IT staff to identify network attacks and vulnerabilities and to instantly terminate the connection to any rogue device.

Extreme Networks said the acquisition will position it as a leader across the hospitality, education, healthcare, manufacturing and state and local government markets, and extends the company into new verticals such as retail, transportation and logistics. The company plans on investing in its newly acquired technology.

Extreme Networks’ acquisition of Zebra is just the latest in the WLAN industry. Fortinet closed the acquisition of Meru Networks in July, and Brocade recently bought Ruckus Wireless in a deal valued at $1.2 billion. Last year, HP acquired Aruba for about $3 billion.

The combined consumer and enterprise worldwide WLAN market segments increased 4.5 percent year-over-year in the first quarter of 2016, according to International Data Corporation (IDC), A number of factors are contributing to the uptick, including refresh cycles, greater availability of Wave 2 802.11ac products and continued fulfillment of e-rate contracts in the education vertical in the United States.

The 802.11ac standard now accounts for 59.6 percent of dependent access point unit shipments and 75.6 percent of dependent access point revenues, representing a noticeably faster adoption rate than what happened with the 802.11a/b/g to 802.11n transition several years ago, IDC noted. The adoption of the 802.11ac standard in the consumer market has been significantly slower than in the enterprise segment, however.

For more:
- see this press release
- see this Network World story

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Brocade to acquire Ruckus for $1.2B in push toward 5G
HP to acquire Aruba Networks for $3B
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