Brocade's Mystery Buy

Switch guys pick up management software startup but keep mum on product status

May 5, 2005

2 Min Read
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For the second straight day, Brocade Communications Systems Inc. (Nasdaq: BRCD) ponied up for a startups technology, although the decibel level was far lower in today’s deal.

Brocade has acquired Redmond, Wash.-based management software developer Therion Software in a stock deal worth approximately $9.3 million, one day after it decided to sink up to $7.5 million into wide-area file services (WAFS) vendor Tacit Networks Inc. (see Brocade Invests in Tacit).

Brocade has had a minority stake in Therion since last July, several months after the company started. Therion's nine employees, including CEO Frank Artale and VP of engineering Peter Benoit, will join Brocade's engineering organization.

While Brocade executives trumpeted the Tacit deal, they have little to say about Therion, which has apparently been in deep stealth while developing products with Brocade.

"We have been working with Therion for more than a year on technologies that will leverage SAN infrastructure to address challenges in the enterprise data center,” Brocade CEO Mike Klayko says in a release. “This acquisition allows us to integrate a skilled team with expertise in shared storage and dynamic system management into Brocade’s engineering group, and accelerate several new product development programs.”Brocade's not talking about how Therion's software might work with Brocade's switch products, though Brocade plans to announce new technologies from the acquisition June 1 at its Brocade Conference.

Little information is available on Therion from other sources, either. Even a news release issued by Realm Systems in February, announcing Frank Artale as its new chairman of the board, listed his previous jobs but didn't mention he was CEO of Therion.

Artale and Benoit formerly worked for Microsoft Corp. (Nasdaq: MSFT), Veritas Software Corp. (Nasdaq: VRTS), management software startup Consera Software, and Hewlett-Packard Co. (NYSE: HPQ) after it acquired Consera in February 2004 (see HP Acquires Novadigm, Consera).

One analyst says there might be a link between the Tacit and Therion acquisitions, at least from a strategic standpoint. Greg Schulz of Evaluator Group pointed to Therion’s Microsoft connection and Brocade’s concentration on Tacit’s Windows-based WAFS product. Schulz says by acquiring Windows-based WAFS, Brocade is looking to match switch rival Cisco Systems Inc. (Nasdaq: CSCO) -- which picked up its own WAFS product by acquiring Actona for $82 million last year (see Cisco Wades Into WAFS).

“Cisco and Brocade now have access to WAFS, which is gaining popularity and targets distributed desktops and storage sites, many of which are Microsoft-based,” Schulz writes in an email. “Both want to do more to get closer to their common OEMs, some of whom are big Microsoft partners.”Another industry source, who asked to remain anonymous, speculates Brocade could be developing intelligent software distinct from its partnership with EMC Corp. (NYSE: EMC). Brocade is one of EMC’s switch partners for EMC's upcoming storage router (see Brocade Enhances Multiprotocol Router).

— Dave Raffo, Senior Editor, Byte and Switch

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