Smart move: Brocade buys Foundry

* Foundry acquisition should raise market interest in Fibre Channel over Ethernet

Brocade's recent acquisition of Foundry Networks for $3 billion should raise the market's interest in Fibre Channel over Ethernet (FCoE).

The Fibre Channel-dominated company has much to gain from the acquisition. It will get the benefit of Ethernet experience, something it didn’t have much of, in spite of its acquisition of iSCSI vendor Silverback Systems in 2007.

Brocade will also gain a bigger entrée into the “evolving next-gen data centers and networks,” says Mike Klayko, Brocade’s CEO.

And, as everyone already knows, the acquisition will make Brocade a more formidable player in the data center space against Cisco. Brocade, who dominates the Fibre Channel market, will now have an additional entry into FCoE with Foundry’s Ethernet switches and routers combined with its own Fibre Channel and storage-savvy products.

The company has not yet detailed how it will integrate Foundry’s ‘Iron’ switches and routers. It did say, however, that the buy would not result in downsizing at either Brocade or Foundry.

It’s a smart move for Brocade who typically would compete with Cisco in the FCoE market. Cisco, who has dominated Ethernet forever, may face increasing pressure from storage networking buyers who are considering FCoE and the converged network. Hesitant to switch to Cisco, these buyers will now be able to rely on Brocade to supply their Fibre Channel/Ethernet needs.

I don’t suspect that Cisco users will feel the same. Few of them will look to Brocade to supply pure Ethernet products, but in the event they are looking for convergence between storage and Ethernet networking, Brocade would make a good bet.

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