Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Latest News
    • Networking
    • Storage

    Brocade Sale to HP, Oracle or Other Player Would Make Sense: Analysts

    By
    Jeff Burt
    -
    October 5, 2009
    Share
    Facebook
    Twitter
    Linkedin

      It was just more than a year ago, in July 2008, that Brocade Communications Systems announced its $3 billion acquisition of Foundry Networks, a move designed to give Brocade a greater unified networking fabric offering for the data center.

      Brocade had a strong history with Fibre Channel. Adding Foundry to the company would bring with it a solid Ethernet play. It would also give Brocade entr??«e into the emerging FCoE (Fibre Channel over Ethernet) space.

      It was a smart move by a company looking to gain traction in the highly competitive enterprise networking space dominated by the likes of Cisco Systems, Juniper Networks and, more recently, Hewlett-Packard and its ProCurve business.

      That’s why David Passmore was surprised when he read Oct. 5 that Brocade may be shopping itself around.

      “I was surprised by this just because the deal with Foundry was so recent, and I hadn’t heard how the Foundry assimilation had been going,” Passmore, an analyst with The Burton Group, said in an interview.

      The Wall Street Journal reported Oct. 5 that Brocade executives have secretly been shopping the company around and that HP and Oracle are among the competitors interested in buying the networking vendor. Others whose names have surfaced in the media include Cisco, Dell and IBM.

      The Wall Street Journal quoted unnamed sources saying that there no imminent deal on the horizon, and that Brocade executives could decide to take the company off the market.

      Officials with Brocade and other vendors have declined to talk about Brocade being on the market or any possible deals.

      Passmore said there could be a number of reasons why Brocade executives were willing to put the company up for sale. One could be simply that the owners saw this as an opportune time to sell, particularly given the push by major tech vendors toward offering more unified data center solutions that include compute, storage, networking and management software.

      Cisco has expanded its presence in the data center with its Unified Computing System, an all-in-one offering that marks Cisco’s entrance into the server market. HP has been more closely tying its ProCurve products with its ProLiant servers, and IBM in July expanded the partnerships with various networking vendors, including Brocade.

      Officials with Dell announced Sept. 1 that the company was entering the unified data center fray, thanks in large part to expanded partnerships with Brocade and software vendor Scalent Systems.

      Then there’s Oracle, which is in the process of buying Sun Microsystems for $7.4 billion. Oracle executives have been vocal about their desire to keep Sun’s hardware business intact, and to offer a unified data center solution, Oracle would need a networking component.

      “It’s possible that Brocade sees that if they don’t hook up with one of the major players, they’d get squeezed out,” Passmore said, pointing to the expected consolidation in the networking space. “They don’t want to be the last of the little guys left after all the big guys fill their dance cards.”

      Zeus Kerravala, an analyst with Yankee Group, said Brocade has always had among the best products. The company’s Achilles’ Heel has been more around distribution.

      In the storage networking space, being sold to a major player could boomerang on the company, Kerravala said in an interview. It already has partnerships with the top storage vendors, including EMC, HP and Hitachi. If one of those companies were to buy Brocade, it would damage any business relationship Brocade has with the other vendors.

      However, on the data center side, the attraction for Brocade would be to find a company that could market and sell the products better than Brocade could. Even with the high quality of products, Brocade had a small percentage of an $18 billion to $20 billion networking market, Kerravala said. Brocade in 2008 had $167 million in profit from about $1.5 billion in revenue.

      “If you can take great technology and marry it to a company that has great distribution skills, how big could this be?” he said.

      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

      MOST POPULAR ARTICLES

      Big Data and Analytics

      Alteryx’s Suresh Vittal on the Democratization of...

      James Maguire - May 31, 2022 0
      I spoke with Suresh Vittal, Chief Product Officer at Alteryx, about the industry mega-shift toward making data analytics tools accessible to a company’s complete...
      Read more
      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Applications

      Cisco’s Thimaya Subaiya on Customer Experience in...

      James Maguire - May 10, 2022 0
      I spoke with Thimaya Subaiya, SVP and GM of Global Customer Experience at Cisco, about the factors that create good customer experience – and...
      Read more
      Big Data and Analytics

      GoodData CEO Roman Stanek on Business Intelligence...

      James Maguire - May 4, 2022 0
      I spoke with Roman Stanek, CEO of GoodData, about business intelligence, data as a service, and the frustration that many executives have with data...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×