Putting an end to recent rumors, CommScope and ARRIS have announced that the former will be acquiring the latter, with the deal to close in early 2019. Both companies built themselves through a combination of internal developments and by making acquisitions; ARRIS with Pace, C-COR, Ruckus, a big piece of Motorola, Digeo, and others. While CommScope has not been particularly on the pay TV industry’s radar, the two companies appear to be a good fit for one another. As network suppliers, the solutions that they provide to the markets that they target are complementary to one another, which CommScope illustrates in their merger presentation of November 8 (see page 14).
So what about pay TV? Because of their solutions synergies, the two companies should be able to open new business opportunities for one another. ARRIS might see new opportunities in enterprises and private properties where CommScope offers fiber and LAN connectivity solutions and ARRIS adds TV CPE and Ruckus WiFi access. Similarly, CommScope could complement ARRIS (and former C-COR) solutions in operator accounts by adding fiber and copper connectivity and outside plant equipment. But the fact that this happened at all was intriguing to me: that ARRIS would build this formidable and comprehensive lineup of solutions – end-to-end, really – and then fold their hand.
You can argue that MediaKind (Ericsson’s to-be-completed-as-of-this-writing joint venture with One Media Partners) and Synamedia (Cisco’s recently consummated joint venture with Permira) have done the same thing, by spinning out “sub-optimally-performing” TV businesses into joint ventures. But while both Synamedia and MediaKind went out of their way to tell of their respective visions for the future at IBC in September, I didn’t get the same emotional connection from ARRIS.
But upon further reflection, it seems that ARRIS has been pulling back for some time. If you click down into individual units of ARRIS, I believe there have been some missed opportunities to stake out a leadership claim.
One could argue that ARRIS has been out there plugging away for Set-top Boxes, and devising new use-cases to keep the category alive. At IBC, I spent an hour with a senior ARRIS executive, and much of our conversation was about was about how screens are canvases. A valid and correct world-view, but a bit surprising since ARRIS discontinued the TV middleware and service delivery platform portions of the Elements software line after acquiring Pace. Not to mention the former Motorola Medios platform.
For another, their TV Security unit has three CAS (SecureMedia’s, and Latens/Pace’s – which overlap – plus Motorola’s/DigiCipher for cable and satellite), a DRM (SecureMedia’s), and a PKI service (Motorola’s). This gives ARRIS a comprehensive product-set and a strong set of technologies – but one in need of modernization. With the emergence of anti-piracy as a new market opportunity for video security (and one that all the security vendors are chasing, as opportunities for CAS and DRM flatten and dwindle), ARRIS has been silent – though it is entirely possible that it exists but simply hasn’t been announced.
There are opportunities, should the new company choose to pursue them. Outside of the Tier-1 operator category that ARRIS calls home, companies like Amino, MobiTV, Nordija, Minerva Networks and of course TiVo, are pursuing “infrastructure modernization” and “cap-and-grow” opportunities with Tier-2 and larger Tier-3 operators, and surely they wouldn’t be doing so unless they saw opportunities there. But because ARRIS sold Digeo/Moxi to Espial last year (now branded as Elevate Cloud), ARRIS had already pulled one foot out of that water. Ironic because platforms “-as-a-Service” have attracted such strong interest.
Other questions remain. For example, what about the ARRIS portion of the joint venture with ActiveVideo and Charter? What role, if any, will majority-owner-to-be Carlisle Group take?
On August 15, I released my analysis of Google TV. It’s available for sale via the Publications page on my Web site.
This week, Carol Wilson of Light Reading interviewed me and wrote a story about the report and my positions on Google TV – in general terms. I believe that Google TV will be fighting an uphill battle right from the get-go, and I have lots of advice for broadband operators, Telcos and ISPs that think Google TV is a shortcut to video services.
Thanks for the great write-up, Carol!