Brocade Takes Aim Beyond the Data Center

Brocades decision to throw down $3 billion for router specialist Foundry may spark a flurry of activity from other vendors looking for a share of the "next-gen data center."

The rationale behind the multibillion-dollar acquisition was a fairly simple one, according to Marty Lans, senior director of Brocade’s data center infrastructure group.

”This acquisition allows us to go well beyond the four data center walls,” he told Byte and Switch, describing the firm’s long-term plan to bolster its networking strategy. “It’s what we see as the other side of the data center or the other side of the server, and we can’t go there without routing capabilities.”

By spending mega-bucks on Foundry, Brocade is, of course, issuing a challenge to networking giant Cisco Systems.

”This is clearly a place where we think that we can give customers a choice in the market,” says Lans. “Today, if you want to go end-to-end, there’s only one company that lets you do that, and that’s Cisco.”Cisco, for its part, refused to comment on Brocade’s Foundry acquisition when we contacted the vendor earlier today, although the broader implications of the deal are only now becoming apparent.

“The proposed acquisition of Foundry is equal parts offensive and defensive,” wrote Citgroup analyst Paul Mansky, in a note released this morning. “[It is] offensive, in that it could spur action from a host of others ranging from Juniper to F5, to potentially HP.”

The analyst added that these vendors are unlikely to sit back and watch from the sidelines as Brocade and Cisco set about carving up the next-gen data center.

”Juniper, only recently entering the Ethernet switch market, will likely now be pressed to develop/articulate a storage convergence strategy,” Mansky wrote. “Meanwhile, HP is the closest to Cisco in evolving the data center and appears to be a dark horse in what we expect to be a consolidation wave to come.”

HP’s future role is intriguing, given that the vendor is a major Brocade partner, yet its ProCurve products compete directly with Foundry’s routing switches. Brocade’s CEO Mike Klayko was even grilled on this topic during last night’s conference call to discuss the Foundry purchase.”We have spoken to them, and there’s opportunity there; we can just leave it at that,” he replied, somewhat cryptically.

Brocade has promised more detail surrounding the Foundry acquisition during its analyst day on September 17, although it is still too early to tell what the long-term impact of the deal will be.

”To make sense strategically in the long run, you need to assume wide-scale adoption of converged LAN/SAN Networks,” wrote Jayson Noland, an analyst at RW Baird, in a note released earlier today. “We believe data center consolidation will continue to be a key initiative for end users, though go-to market and IT organizational charts could slow the pace of adoption.”

Less than 24 hours after the Foundry acquisition, Brocade has already started to market itself as a more nimble vendor than the Cisco behemoth, although words, as ever, are cheap.

”Brocade’s push for broad-based data center relevance is beginning to take shape, though we prefer to watch from the sidelines in the near term,” added Noland.Have a comment on this story? Please click "Discuss" below. If you'd like to contact Byte and Switch's editors directly, send us a message.