The result of Brocade’s $3 billion acquisition of Foundry is expected to present customers with a viable alternative to Cisco in the data center. As customers weigh the pros and cons of emerging data center technologies, such as Fibre Channel over Ethernet – which is being backed by Brocade and Cisco – a combined Foundry-Brocade wants to be on every Cisco customer’s radar. But does Brocade-Foundry have what it takes to take on Cisco? Here’s a quick roundup of what the analysts are saying:
According to an Associated Press story, Lazard Capital Markets analyst Ryan Hutchinson doesn’t believe the news is a material threat to Cisco’s LAN switching business. “We believe any strategic gains from having footholds in storage, LAN switching and carrier routing are likely long-term-focused and incremental gains will likely be immaterial to Cisco,” he is quoted as saying in the AP story.
Another AP story suggests:
The acquisition promises to make Brocade a more well-rounded competitor to Cisco, but isn’t likely to substantially dent Cisco’s dominance because Foundry Networks, with $607 million in sales last year, is considered a niche player.
Meanwhile a SearchStorage story cites a research report by Wachovia analyst Aaron Rakers, who notes that the buy was financed with $1.4 billion in cash and $1.5 billion in debt, “resulting in a net-debt position,” according to the story.
Nevertheless, Brocade believes the field is wide open for an alternative to Cisco as customers look to update their data center infrastructures.
Would a combined Brocade-Foundry make it on your radar?
* Read our bloggers’ take on the union:
Reese: Dell Oro Group take on Foundry and Brocade merger
Morris: Brocade Buying Foundry…Has to be an FCoE Play
Lewis: Brocade Buys Foundry: Good Idea?
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