Dissecting the Brocade-Foundry Merger

By Chris Preimesberger  |  Posted 2008-07-22 Print this article Print

The huge networking deal between Brocade Communications and Foundry Networks puts a new spin on the competition with Cisco Systems. But Brocade faces serious challenges as it integrates Foundry into its organization.

Brocade Communications' $3 billion acquisition of neighboring Foundry Networks, announced July 21, is all about connectivity, and it is causing plenty of talk in the storage and networking analyst communities.

After all, if this deal closes as expected this fall, Brocade will have pulled off one of the largest networking sector acquisitions in IT history.

The acquisition now will allow Brocade salespeople to pitch one converged network featuring Fibre Channel SANs (storage area networks), IP 10 Gigabit Ethernet, or both, to potential customers. Simple is always better when it comes to explaining complicated IT networks and trying to sell them.

The deal also makes Brocade-which will become a $5 billion (market capitalization) company after the merger-a much more formidable foe for networking infrastructure kingpin Cisco Systems ($129 billion market capitalization), which has owned the lion's share of the Internet switching and routing market since the dawn of the commercial Internet and the Web in the mid-'90s. 

Until now, Brocade has offered primarily top-of-the-line Fibre Channel connectivity for SANs. With the addition of Foundry, the company will offer a complete lineup of networking infrastructure that will include much-needed security improvements.

Many enterprises need to bolster their infrastructures to support the growing preponderance of Web-based and mobile applications, and this merger will provide a realistic new alternative for CTOs and CIOs to consider. As recent failures of high-profile Web-based infrastructures have shown-namely, outages at Amazon S3, Salesforce.com, Google and others-the importance of robust, up-to-date systems that can handle high volumes of transactions cannot be overvalued.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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