Brocade Grabs Silverback

Fibre Channel stalwart picks up iSCSI expertise

January 9, 2007

2 Min Read
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Brocade moved to strengthen its iSCSI capabilities today, picking up chip startup Silverback Systems. (See Brocade Buys SilverBack.)

Brocade did not disclose the acquisition price, but Silverback had $51 million in funding and has been developing 10-Gbit/s enhancements for its iSnap chip family. (See Silverback Hoists $16M.) Madhu Matta, director of Brocade's switch business team, says Silverback was generating revenue from OEM deals with Network Appliance, Montillio, and Qsan, but Brocade is more interested in the technology and engineering team than current products.

"As the data center starts evolving, it's starting to include protocols such as 10-Gig Ethernet," Matta says, "and this is our first step to acquiring that emerging technology."

Matta says he anticipates 10-GigE would propel iSCSI, although he's not sure how long it will take. "iSCSI hasn't really taken off to anybody's expectations. Will 10-GigE be the inflection point? One day when it's economically viable," he says. "This is a building block for us as we try to move into that space."

Brocade has a multiprotocol router with iSCSI and Fibre Channel connectivity, but Fibre Channel switches have dominated its business. Matta says Silverback has 38 employees -- mostly engineers. He expects Brocade to retain the engineers, as well as CEO Ahmet Houssein and Silverback's marketing staff.Matta says Brocade would likely reveal plans for new chips with Silverback technology around mid-year.

The acquisition was another sign that Fibre Channel stalwarts are preparing for iSCSI to play a larger part in storage networks and the data center. HBA vendor Emulex picked up Silverback rival Aarohi for $39 million in April. (See Storage Do-Si-Do and Emulex Buys Aarohi.)

At least one analyst was left scratching his head by the acquisition. Brocade was not Silverback's most likely suitor, according to Bob Wheeler, senior analyst at the Linley Group. He thought Emulex's HBA rival QLogic was a more likely fit. "I have followed Silverback for a while, and what is a little more surprising is that someone else who is interested in the HBA space, such as QLogic, would not have picked them up," he says.

For Brocade, though, Silverback is much less obvious fit. "It sounds like it was not a very large deal -- it may be that Brocade is more interested in using the underlying Silverback silicon on iSCSI gateways or embedded target-type applications," Wheeler says.

Dave Raffo, News Editor, Byte and Switch

  • Brocade Communications Systems Inc. (Nasdaq: BRCD)

  • Emulex Corp. (NYSE: ELX)

  • The Linley Group

  • Network Appliance Inc. (Nasdaq: NTAP)

  • QLogic Corp. (Nasdaq: QLGC)

  • Qsan Technology Inc.

  • Silverback Systems Inc.

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