Feeds

Brocade buys Foundry Networks for $3bn

Playing with the big boys now

Reducing the cost and complexity of web vulnerability management

Brocade is to acquire Foundry Networks for $3bn in cash and stock. The storage networking vendor has secured a $1.5bn debt facility from Bank of America and Morgan Stanley to grease the purchase.

The company says the acquisition will be accretive to Brocade's non GAAP earnings in fiscal 2009. In other words, there are cost savings to be made. Also, Foundry is a more profitable company. Last year it posted $607.2m sales and $81.1m income. Brocade, about twice the size with $1.2bn in revenue, produced profits of $76.9m.

That's the financials out of the way: so why is Brocade willing to take on so much debt to get Foundry? Cisco, in a word. The world is going data centre-crazy and right now, only Cisco can supply all the data networking equipment that these power-guzzling factories need.

With Foundry under its belt, Brocade thinks it can also play credibly end-to-end. In interviews yesterday. Marty Lans, a Brocade marketing veep, said Foundry brought Ethernet products to its table.

So the companies have the technology to take on Cisco. But they have an awful long way to go to match them on sales. Foundry took two per cent of the market for Ethernet switches in 2007, against Cisco’s 71 per cent.

So the Brocade-Foundry tie-up looks defensive as much as anything else. As Dell-Oro analyst Alan Weckel told AP, Cisco has “been advocating that the Fibre Channel and Ethernet technologies themselves should be merged somewhat - a direct assault on the core business of Brocade and Foundry Networks”.

Brocade release ®

Reducing the cost and complexity of web vulnerability management

More from The Register

next story
Wanna keep your data for 1,000 YEARS? No? Hard luck, HDS wants you to anyway
Combine Blu-ray and M-DISC and you get this monster
US boffins demo 'twisted radio' mux
OAM takes wireless signals to 32 Gbps
Apple flops out 2FA for iCloud in bid to stop future nude selfie leaks
Millions of 4chan users howl with laughter as Cupertino slams stable door
No biggie: EMC's XtremIO firmware upgrade 'will wipe data'
But it'll have no impact and will be seamless, we're told
Students playing with impressive racks? Yes, it's cluster comp time
The most comprehensive coverage the world has ever seen. Ever
Run little spreadsheet, run! IBM's Watson is coming to gobble you up
Big Blue's big super's big appetite for big data in big clouds for big analytics
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.