Brocade Invests in Tacit

Switch maker takes minority stake and will resell Tacit WAFS through OEMs

May 4, 2005

3 Min Read
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Brocade Communications Systems Inc. (Nasdaq: BRCD) has taken a minority stake in Tacit Networks Inc. and plans to include the startup's wide-area file services (WAFS) products in its lineup (see Brocade, Tacit Join Forces).

Brocade is investing "up to $7.5 million" in Tacit, representing a roughly 10 percent stake. Tacit has raised about $24.2 million to date (see Tacit Takes In $16.9M).

Initially, Brocade VARs will peddle Tacit's iShared WAFS software. Eventually, if a series of unspecified contingencies are met, execs from both companies say the relationship could lead to an integration effort.

"This expands Brocade's overall product line and accelerates awareness of Tacit's technology," says Brocade CTO Jay Kidd.

This is Tacit's most dramatic pairing yet, though the vendor has an earlier resale agreement with IBM Corp. (NYSE: IBM) and a typical development deal with Microsoft Corp. (Nasdaq: MSFT). (See Tacit Teams Up With Microsoft and Tacit Tightens Blue Connection.) For the most part, Tacit has sold its wares chiefly through its own network of resellers, and it will continue to maintain that channel (see Tacit Launches Channel).The news is the latest vote of confidence for WAFS, which, along with WAN optimization, a network-oriented approach, is viewed as a key technique for helping IT support remote sites. Kidd says WAFS interested Brocade more than WAN optimization, because its focus on file delivery protocols is a better fit for storage networking.

"WAN optimizers are too generic, and they can result in operational compromises," Kidd maintains. Some WAN optimizers, for instance, are set up directly in the path of data traffic, which concerns him.

The news also gives a boost to Tacit, which Kidd says was chosen after "quite a bit of due diligence" on other firms. "We think Tacit has the best product in the WAFS area. We have no plans to offer other WAFS solutions," he says.

Greg Grodhaus, CEO of Tacit, doesn't vow the same fidelity. Still, the agreement clearly limits Tacit's future chances for SAN switch partnerships. Grodhaus seems fine with taking that stand. "For years, I competed against Brocade [at Inrange Technologies, later CNT -- see Tacit Ready to 'Spar With Gorilla']. It's good to be on the right side of the fence," he quips.

For all the camaraderie, expectations may differ a wee bit on either side. Kidd says most enterprise customers in Brocade's space use Windows servers at remote sites, and Brocade appears focused on Tacit's iShared for Windows Storage Server 2003. But Tacit offers Linux versions of iShared as well, and Grodhaus says that's equally important: "Our software-only product will give flexibility to Brocade OEMs."The Brocade/Tacit alliance is the latest evidence that storage and network equipment vendors are eager to embrace WAFS and WAN optimization. Last week, for instance, Juniper Networks Inc. (Nasdaq: JNPR) announced plans to spend $337 million to buy Peribit Networks Inc., a vendor of WAN optimization (see Juniper Takes Peribit, Redline and Peribit Deal: More to Come). That news follows the $82 million purchase of WAFS vendor Actona Technologies by Cisco Systems Inc. (Nasdaq: CSCO) in August 2004 (see Cisco Acts on Actona).

At least one analyst expects to see more announcements like this. "We'll see companies either acquire or partner pretty closely," says Stephanie Balaouras, senior analyst with The Yankee Group. "This kind of solution is part of an ecosystem and doesn't lend itself well to a standalone approach."

Mary Jander, Site Editor, Byte and Switch

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