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Cisco & QLogic: Headed for Huddle

Cisco Systems Inc. (Nasdaq: CSCO) and QLogic Corp. (Nasdaq: QLGC) are likely to become switch partners through an OEM deal whereby QLogic would provide Cisco with 4-Gbit/s Fibre Channel switches, sources say.

The partnership is set, some claim, and financial analyst Tom Curlin of RBC Capital Markets writes in a research note today that a deal is already in place for 20-port switches. According to Curlin, the deal will be announced in the second quarter of the year with switches shipping in the third.

One things for sure: neither company is ready to talk about it. “Cisco does not comment on rumors and speculation,” a Cisco nonspokesman says. QLogic did not return requests for comment.

Not everybody is mum, though. Another well embedded switch industry source confirms an OEM deal between QLogic and Cisco is close if not already sealed. The deal would make sense for both companies. It would help Cisco accelerate its 4-gig switch to market and advance QLogic’s strategy of diversifying into the switch space.

While rivals Brocade Communications Systems Inc. (Nasdaq: BRCD) and McData Corp. (Nasdaq: MCDTA) have publicized their plans, Cisco has been quiet on the 4-gig front. A Cisco spokesman today said that the company expects to offer 4-gig versions of the MDS 9000 family. However, a deal with QLogic would be for a lower-end switch.

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