The 10 Biggest Networking Acquisitions Of 2017 (So Far)

Top 10 Biggest Networking Acquisitions

Although it's only halfway through the year, the networking industry has already seen several huge acquisitions as some vendors look to increase their share while others are seeking to shake up the entire market.

As customers change the way they purchase network offerings -- from a Capex to Opex model as well as a heavier focus around the return on investment -- some networking vendors are scrambling to stay afloat. We saw this industry turmoil come to a head in 2017 with Avaya filing for Chapter 11 bankruptcy protection and Brocade Communications selling off its business units to separate entities.

Here are the 10 biggest acquisitions in the networking industry during the first six months of 2017.

10. Cisco Acquires MindMeld

Purchase Price: $125 million

The San Jose, Calif.-based networking giant took a deeper dive into artificial intelligence this year with its acquisition of MindMeld for $125 million. MindMeld is a San Francisco-based AI startup that spent three years developing its MindMeld platform, making it possible for companies to create intelligent conversational interfaces for any application or device. Cisco said it will leverage MindMeld technology to "bring voice AI to meeting rooms" – specifically into its Cisco Spark unified communications and collaboration portfolio.

"The workplace of the future is one powered by AI," said Rowan Trollope, senior vice president of Cisco's IoT and Applications Group. "This is a significant step toward making that workplace a reality. Integrating MindMeld into the Cisco Spark platform will transform how users interact in Cisco Spark Spaces, Cisco Spark Meetings and Cisco Spark Care."

9. Extreme Networks Buys Brocade's Data Center Networking Business

Purchase Price: $55 million

Extreme Networks is purchasing Brocade Communications' data center networking business from Broadcom for $55 million. San Jose, Calif.-based Extreme will gain Brocade's data center switching, routing and analytics businesses once Broadcom finishes its acquisition of Brocade. Extreme CEO Ed Meyercord told CRN that Brocade's portfolio will bring high-end data center working along with visibility and automation.

"When we look at the edge, people want low-cost, simple, secure solutions and then as you move up into the data center, this is where people start looking more at network automation – and we're getting great technology from Brocade on the network automation side with the fabric technologies we're picking up," said Meyercord. "We're going to have a very compelling story to tell in the data center."

8. Mitel Purchases Toshiba's UC Assets And Support Contracts

Purchase Price: Not disclosed

Earlier this year, Toshiba said it was exiting the telecommunications market in North America and shutting down its Telecommunication Systems Division, a subsidiary based in Irvine, Calif., that sells unified communications offerings.

Mitel stepped in with plans to acquire selected UC assets as well as support contracts from Toshiba. The Ottawa, Ontario-based vendor will receive Toshiba assets and support obligations, including existing inventory, as well as product and services agreements transferred from Toshiba customers to Mitel.

"Toshiba's communications business is a perfect complement to Mitel and ultimately benefits our current customers and channel partners by expanding our footprint capabilities," said Wes Durow, chief marketing officer for Mitel. "In doing so, it further expands our scale as more and more businesses seek a seamless path to cloud-based unified communications and collaboration capabilities."

7. AT&T Buying Brocade's Vyatta Business

Purchase Price: Not disclosed

As part of Broadcom's $5.9 billion acquisition of Brocade, the vendor will sell off Brocade's Vyatta Software Platform to AT&T, which solution providers said signals a significant shift in how service providers will deliver networking in the future.

"This is groundbreaking," said Ed Fox, vice president of network services for MetTel, a New York-based communications solution provider and AT&T Platinum Elite partner. "It's a monumental shift in the whole supply chain."

AT&T, Dallas, will be able to use Vyatta's software within its white-box switches and sell as a Platform as a Service offering through its partners or directly to business customers.

6. Windstream Acquires Broadview Networks

Purchase Price: $227.5 million

Windstream executives told CRN that its $227.5 million acquisition of Broadview Networks will enable the company to grab share from competitors including Vonage, RingCentral and 8x8. The Little Rock, Ark.-based telecom provider expects the acquisition to generate $30 million annually in operating synergies within two years.

"Broadview’s unique, proprietary unified communications solutions will advance our product portfolio, improving our competitiveness and ability to provide enhanced services to business customers. The transaction also will enable us to leverage Broadview’s experienced sales force and cloud operations across our national footprint,’ said Tony Thomas, president and CEO of Windstream.

Rye Brook, N.Y.-based Broadview specializes in cloud-based unified communications solutions targeting the SMB market with its flagship suite of services, OfficeSuite UC.

5. Extreme Networks Buys Avaya's Networking Business

Purchase Price: $100 million

In a bold move to extend its market share in the networking industry, Extreme unveiled plans to acquire Avaya's Networking business for $100 million just months after Avaya filed for Chapter 11 bankruptcy. Extreme said it expects Avaya's networking business to generate over $200 million in annual revenue for the company.

"This strategic acquisition establishes Extreme as the third largest competitor in our enterprise markets and the only company in the world exclusively focused on delivering the highest quality end-to-end, wired and wireless enterprise IP networking," said Norman Rice, executive vice president of corporate development, global marketing and supply chain.

Avaya received four bids for its networking business as part of its restructuring plan, with bids ranging in value from $5 million to $330 million.

4. Riverbed Technology Acquires Xirrus

Purchase Price: Not disclosed

Xirrus, one of the last stand-alone wireless networking vendors in the market, was acquired by San Francisco-based Riverbed Technology to boost its software-defined WAN capabilities by extending Riverbed's SteelConnect product line to the wireless network edge. Riverbed will integrate SteelConnect with Xirrus's high density and cloud-managed Wi-Fi offerings.

Riverbed touts SteelConnect as a differentiated SD-WAN offering that provides simplicity, network and application intelligence, and agility with centralized and unified management spanning the entire network fabric with policy-based orchestration. SteelConnect also provides connectivity to Amazon Web Services and Microsoft Azure. Riverbed will also continue to offer Xirrus as a stand-alone wireless WAN offering.

3. Cisco Acquires Viptela

Purchase Price: $610 million

In a monumental move in the SD-WAN industry, Cisco acquired SD-WAN startup Viptela for $610 million. San Jose, Calif.-based Viptela provides SD-WAN technology to several Fortune 500 companies and carriers such as Verizon. Its offerings include the vSmart Cloud-based SD-WAN Controller to centrally manage routing, policy, security, segmentation and authentication of devices; vManage Network Management System for centralized configuration and management; and vEdge routers.

"Together, Cisco and Viptela will be able to deliver next-generation SD-WAN solutions to best serve all size and scale of customer needs, while accelerating Cisco’s transition to a recurring, software-based business model," said Rob Salvagno, vice president of corporate business development at Cisco.

2. Ruckus Wireless Heads To Arris

Purchase Price: $800 million

After months of searching for a home for Ruckus Wireless, which Brocade bought for $1.2 billion in 2016, partners were relieved to learn that Arris International would be acquiring Ruckus along with Brocade's ICX Switch product line for $800 million. In an interview with CRN, Arris CEO Bruce McClelland said he plans to operate Ruckus and the ICX line as a "dedicated business unit" operating relatively independently within Arris.

"We had heard that many of our partners were in a wait-and-see modebecause where would [Ruckus] end up?" said Brocade channel chief Sandra Glaser Cheek in an interview with CRN. "Now that we know where we're going and it's going to a very well-funded, large company – we all feel super confident that we have a good home now."

1. Cisco Bets Big On AppDynamics

Purchase Price: $3.7 billion

Cisco snatched up AppDynamics one day before its planned IPO, paying a whopping $3.7 billion for the company. Partners said the tighter integration of applications to the network will vastly improve the end-user experience while opening up "an amazing new world" of opportunities for the channel around network refreshes. AppDynamics helps enterprises translate application data into business insight and provide end-to-end insight across their technology stack.

"[AppDynamics] is the fastest-growing software company out there," said Rowan Trollope, senior vice president and general manager for Cisco's IoT and Applications Group, who now leads its new AppDynamics division. "There's going to be opportunities in the near and medium term for us to combine and bring combined offers to the marketplace at least in the sales cycle. On the data center front, it's definitely an area where we're looking to leverage our sales force on the Cisco side to tie those together and see if we can bring even more deals to the table."