This syndicated post originally appeared at Network World Zeus Kerravala.

Game changers?

In the networking industry, it seems that every year there’s a flurry of mergers and acquisitions. Turns out that 2016 was no different. Here are 10 that have the most game changing potential, since they have the potential to move the acquiring company into an entirely new market.

 

Cisco connects with Jasper

Prior to the $1.4 billion acquisition of Jasper, Cisco’s Internet of Things (IoT) strategy revolved around connecting devices. Connectivity is certainly important but it’s only a small piece of the IoT puzzle. Jasper brings to Cisco a market leading IoT platform that is currently being used by many major enterprises, such as Ford, GM and Boston Scientific. Jasper’s cloud-based platform also provides automation and analytic capabilities making it a critical component of scaling IoT solutions. Cisco has been one of the primary evangelists of IoT and now it has the platform to make the vision a reality.

 

Symantec dons Blue Coat

In June, Symantec plunked down $4.65 billion to acquire Blue Coat. The combined company creates a single security vendor that has more than $4 billion in revenue with a broad portfolio that is well aligned with digital trends. The addition of Blue Coat gives Symantec a strong play in cloud and web security, something it had been lacking. The acquisition also brought Blue Coat’s CEO, Greg Clark into the fold, who was named CEO of Symantec and will lead the company into its next phase of growth.

 

Brocade starts a Ruckus

Prior to purchasing Ruckus Wireless for $1.2 billion, Brocade’s Wi-Fi strategy had been to OEM a myriad of different vendors including Meru, Motorola and mostly recently Aruba. While an OEM enabled Brocade to check a box if the customer wanted Wi-Fi, it didn’t let Brocade control its own destiny through what it does best, and that’s innovate. Ruckus’ value proposition is similar to Brocade’s in that its differentiation is great technology and has some true 1 + 1 = 3 potential through workflow automation and software defining the access edge.

 

Verizon lines up Fleetmatics

Think Verizon is serious about IoT? In August the company showed everyone just how serious it was when it forked over $2.4 billion for Fleetmatics, a significant player in the fleet and mobile workforce management solutions. The Dublin, Ireland-based company makes Verizon an instant, major player in IoT by providing fleet operators with vehicle location, fuel usage, speed and mileage and other information to help businesses reduce operating costs. Expect to see Verizon use the SaaS based platform to launch other vertical IoT plays.

 

Cavium scoops up QLogic

Chipmaker Cavium makes silicon that is used by primarily networking and security vendors. The flurry of M&A activity in these markets has shrunk the number of customers it can sell to. Also, competition from the likes of Broadcom, Intel and Marvell has heated up so there’s more supply and less demand. The $1.36 billion acquisition of QLogic is transformative in that it moves Cavium into the storage industry. The purchase doubles the size of Cavium and diversifies the business making it less susceptible to the ups and downs of the networking industry.

 

Extreme zeroes in on Zebra’s WLAN business

At $55 million this is on the smaller side of networking M&A but does hold significant potential for Extreme Networks. Zebra’s technology is widely deployed in the transportation and logistics markets with big name customers like FedEx and WalMart. These are verticals that Extreme is currently lightly penetrated in and it can use the existing footprint to grow its wired networking and WiFi analytics business.

 

A10 adds Appcito

The cloud is going to make application delivery controllers (ADCs) irrelevant! That’s some of the rhetoric surrounding the ADC market today. A similar shot was fired across the bow of the vendors in this space when virtualization became mainstream. The fact is, the growth of workloads, physical, virtual or now in the cloud is good for ADCs as customers need better control and security of how traffic flows to and from them. The key to being able to meet application delivery challenges in the cloud is having a product that is designed for it, as one can’t just “lift and shift” an ADC and expect it to work the same. When A10 acquired Appcito, it got the best cloud-native ADC that is delivered as SaaS.

 

Vonage dials up Nexmo

CEO Alan Masarek’s vision for Vonage is to transform the company from being a small business and consumer VoIP provider to a global powerhouse in cloud communications. He kicked off his journey by acquiring and rolling up a number of Broadsoft based UCaaS providers and then purchased gUnify to tie communications to business applications. In August of 2016, he made a big bet on the emerging CPaaS (communications platform as a service) market when Vonage shelled out $230 million for Nexmo. CPaaS is an integral part of digital transformation as it enables businesses to buy modules of communications, such as voice and messaging, to build omni-channel mobile applications. The combined “VoNexmo” is unique and can address any customer’s communications needs regardless of how they want to consume it.

 

Broadcom buys Brocade

The $5.9 billion acquisition of Brocade by Broadcom is similar in vision but much larger in scale as Cavium-QLogic. Brocade is a bit more complicated a company than QLogic as it is the overwhelming market leader in storage networking but also has a best in class IP networking division. Broadcom, the dominant silicon provider in networking, can leverage Brocade to become a powerhouse in storage networking. As part of this deal, the IP division of Brocade is likely to be sold off, Ruckus included. We’ll see in 2017 where it winds up.

 

IBM storms the Weather Company

At first glance one might go, what the heck? One of the largest IT vendors just bought the website I go to check and see how cold it is in Oymyakon, Russia (the coldest city on Earth)? Does this make any sense? It absolutely does because IBM now owns all of the Weather Company’s data. All of the artificial intelligence giants, such as Google and Microsoft, are collecting data to improve their predictive capabilities. IBM has stated it will use the data to bolster its Watson IoT platform. Customers can use their own data, from sensors or other sources, to help make better decisions. The weather affects so many things in our lives and IBM acquired a unique asset to give it a differentiated IoT play.

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Zeus Kerravala

Zeus Kerravala is the founder and principal analyst with ZK Research. Kerravala provides a mix of tactical advice to help his clients in the current business climate and long term strategic advice.
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