Broadcom To Buy Brocade For $5.9 Billion

[Julio Urquidi]

Broadcom announced its intent to purchase Brocade for $5.9 billion, expanding the chip company’s reach into the data center market.

This strategic move could potentially put it in competition with customer companies like Cisco, HP and Intel. So Broadcom said it would sell Brocade’s networking business (largely products from an earlier Ruckus Wireless acquisition - access points, controllers, etc.) to avoid competing with its customers. Broadcom would then focus on using the remaining Brocade technologies to grow its storage networking business.

This purchase, once completed, would follow Broadcom Corp’s acquisition last year by Avago for $37 billion dollars, a move that renamed the latter company to Broadcom Ltd.

Per Broadcom, Brocade’s board of directors and Executive Committee approved the purchase, and expect it to close late next year.

 

[mtganzer]

The Brocade networking business is not just Ruckus, it is the entire pre-merger Foundry Networks line. Basically Broadcom wanted the SAN storage fabric portion of the company, and is willing to jettison the rest so they are not competing with their customers (the ones they provide merchant silicon to)

 

[sfx2000]

Brocade wasn't that big of a deal actually... decent switches at a certain level, but no better than anyone else...

Kinda puzzled why this one went thru...

 

[RMerlin]

Brocade wasn't that big of a deal actually... decent switches at a certain level, but no better than anyone else...

Kinda puzzled why this one went thru...

Patents? Infrastructures?

Sent from my Nexus 5X using Tapatalk

 

[remixedcat]

this is interesting since Ruckus has a lot of QCA chips in thier products.

 

[sfx2000]

this is interesting since Ruckus has a lot of QCA chips in thier products.

It's not unusual for unrelated business to be spun out or sold off - as @mtganzer mentioned above, the SAN fabric business is likely the part they were after - sell of the Ruckus line and perhaps the switching business to pay for the deal..

 

[mtganzer]

It's not unusual for unrelated business to be spun out or sold off - as @mtganzer mentioned above, the SAN fabric business is likely the part they were after - sell of the Ruckus line and perhaps the switching business to pay for the deal..

Our reps said exactly that. The SAN fabric market is pretty much all OEM'd to storage vendors like EMC, and Broadcom wanted into that space. The network side competes with their OEM networking customerss, hence the desire to spin that off.

We are a pretty-decent size Brocade network product account, so this is big deal to us. When we went with Foundry 10+ years ago, they were an early pioneer in using SFlow to visualize/monitor traffic all the way out to the edge (Cisco only had Netflow at that point), They also at the time had much higher port density than comparably-priced Cisco chassis switches.

These days, Brocade is also heavily invested in the NFV/SDN space, having acquired Vyatta a few years ago and more recently the Riverbed SteelApp technology.