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Brocade Takes Aim at Cisco (Juniper)

Who's got the most to worry about as Brocade absorbs Foundry? Maybe it's not Cisco

Brocade Communications Systems Inc. (Nasdaq: BRCD) is making it no secret that yesterday's $3 billion offer for Foundry is a way to take on Cisco Systems Inc. (Nasdaq: CSCO) in the data center. (See Brocade to Acquire Foundry.)

Cisco might not be the company that needs to worry most about the deal, though.

"I think it was more aimed at Juniper Networks Inc. (Nasdaq: JNPR) than at Cisco," says Sam Wilson, an analyst with JMP Securities . "People are trying to find out who's going to lead the ABC club -- 'Anybody But Cisco' -- and Juniper was leading that club."

In fact, the deal might be most worrisome not for Cisco, but for the other data center players that are seeing competitors get bigger. While it's on a lesser scale, Blue Coat Systems Inc. (Nasdaq: BCSI) recently picked up Packeteer Inc. (Nasdaq: PKTR). (See Blue Coat Plucks Packeteer for $268M and Blue Coat Finally Bags Packeteer.)

That deal, combined with Brocade's move, opens up questions about whether Nortel Networks Ltd. (NYSE/Toronto: NT), Citrix Systems Inc. (Nasdaq: CTXS), and F5 Networks Inc. (Nasdaq: FFIV) need to do some merging too.

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