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Cisco rival Brocade for sale?

WSJ report says data center SAN/LAN vendor shopping itself around

By Jim Duffy on Mon, 10/05/09 - 4:06pm.

Brocade has reportedly put itself up for sale, a development that may kick off some long expected consolidation within the data center IT industry. According to the Wall Street Journal, Brocade has enlisted Qatalyst Group to shop the company around.

Likely suitors are HP and Oracle, the WSJ reports, as well as IBM, Dell and perhaps Juniper.

Brocade has a market cap of $3 billion. HP would be interested in Brocade to fill out its data center switching and SAN portfolio as it battles former ally Cisco for next generation data center buildouts. HP resold Cisco routers and switches for years before ramping R&D in its own ProCurve line.

Cisco countered by developing a data center blade server system to compete with HP's and IBM's offerings. IBM is also a reseller of Cisco switches and routers but recently agreed to OEM Brocade's equipment, which it obtained from its acquisition of Cisco rival Foundry Networks.  

HP currently resells Brocade FibreChannel and FibreChannel-over-Ethernet  SAN switches under an OEM arrangement but is challenged in offering a complete data center switching line via its internally developed ProCurve brand. Acquiring Brocade would fill out both its LAN and SAN switching portfolios for the data center.

Similarly, software giant Oracle would become a more complete player in the data center with a Brocade acquisition. Oracle is in the process of acquiring Sun Microsystems for over $7 billion, which gives it server hardware and software; Brocade would give Oracle LAN and SAN switching hardware and make the company a powerful hardware provider as well as software.

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