Brocade May Be Up For Sale

Potential suitors for the storage-networking vendor include Hewlett-Packard and Oracle, according to reports. Brocade won't comment.

Antone Gonsalves

October 5, 2009

2 Min Read
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Storage-networking vendor Brocade may be up for sale. Companies interested in the networking company include Hewlett-Packard and possibly Oracle, The Wall Street Journal reported Monday, quoting people familiar with the matter.

No deal is imminent and Brocade could back out of a sale, according to the Journal.

Brocade declined comment on the report. "We cannot comment on rumor or speculation," Brocade spokesman John Noh told InformationWeek.

Brocade sells routers, switches and other technologies that connect computer networks to data-storage systems. The company has a market capitalization of $3.2 billion, and last year earned $167.1 million on revenue of $1.5 billion.

If Brocade was to sell itself, then it would be the latest of several recent high-profile purchases that reflect an ongoing consolidation in the technology industry. For example, Dell's need for a large-scale services operation led to its proposed $3.9 billion buyout in September of Perot Systems.

Other examples include Cisco's plans to acquire videoconferencing company Tandberg for $3 billion, and imaging giant Xerox's $6.4 billion agreement to buy business services firm Affiliated Computer Services.

HP has long partnered with Brocade and Cisco for networking equipment. Buying Brocade would make sense in that it would fill a void in HP's offerings for the data center.

Brocade's storage area network switching technology has been fully integrated with HP's BladeSystem architecture. The close partnership between the companies was reflected in June, when Mike Klayko, chief executive of Brocade, delivered a keynote at the closing session of HP's Technology Forum & Expo in Las Vegas, Nev.

As to a potential sale to Oracle, the database company is in the process of completing a $7.4 billion purchase of Sun Microsystems, which has also had a long-time partnership with Brocade. Sun's StorageTek networking offerings include Brocade switches, routers and other products.

InformationWeek has published an in-depth report on Dell's $3.9 billion buy of Perot Systems. Download the report here (registration required).

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