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Broadcom bid for Emulex raises data center bar for Cisco, others

Broadcom's unsolicited bid for Emulex this week is another example of consolidation in the data center networking industry following significant events such as Cisco's entry into the blade server market, and Oracle's intent to acquire Sun Microsystems. Expect more data center players to combine as the stakes for success in next-generation buildouts get higher.

Emulex makes products designed to interconnect storage, servers and networks in data centers. Broadcom, a maker of semiconductors for communications products, is particularly interested in Emulex's FibreChannel lineup, according to IDG News Service's Elizabeth Montalbano.

The combined company, according to Broadcom, could use its portfolio to provide low-cost, network-converged storage and networking to customers, Montalbano reports. There is little product overlap between the systems and device manufacturers.

Emulex rejected a previous Broadcom bid earlier this year. Broadcom this week took its $764 million offer directly to Emulex shareholders.

Analysts and other observers expect more consolidation as enterprises and service providers embark on next-generation data center transformations that look to converge storage, servers and networking into a common resource and utility pool interconnected over a single switching fabric.

Oracle is looking to acquire Sun for $7.4 billion in an effort to become a more complete IT player in data centers. Brocade, Juniper, EMC and others might make good acquisition targets for the likes of IBM, HP, Cisco and others, observers note.

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