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QLogic Inches Closer to Cisco

QLogic's $60 million acquisition of SilverStorm not only makes it a major InfiniBand player, it also deepens its relationship with Cisco -- the company many insiders think might eventually consume QLogic. (See QLogic Grabs SilverStorm and QLogic Eyes SilverStorm.)

That's the way it often goes in the business -- even companies with histories of making acquisitions become targets themselves. Veritas is a prime example. (See Symantec & Veritas: It's a Deal.)

But Wall Street analysts say Cisco and QLogic are more likely to remain good friends than become mates because QLogic makes more sense for Cisco as a partner rather than as an acquisition target or potential new business unit.

QLogic's latest acquisition brings it into another partnership with Cisco. Cisco gets its InfiniBand directors from SilverStorm in an OEM deal that carried over from Topspin, the InfiniBand gear startup that Cisco acquired in April 2005. (See Cisco Takes On Topspin.)

Now QLogic has deals in place to supply Cisco with Fibre Channel switches and InfiniBand directors. Cisco also OEMs QLogic's 4-Gbit/s Fibre Channel switch -- a poorly kept secret that both companies still refuse to acknowledge. Cisco might want to expand that relationship to help battle the combined entity of Brocade and McData. (See Brocade Bags McData For $713M and Ericsson Wins Xfera.)

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