Brocade up for sale: WSJ

Robert Clark
06 Oct 2009
Daily News

Storage and networking firm Brocade has put itself on the sale block, the Wall Street Journal has reported.

The prospective buyers include Hewlett-Packard and Oracle, the paper said, but quoted sources saying no deal was imminent and the company may decide not to sell.

Brocade has a market capitalization of about $3.2 billion, and last year posted net income of $167 million on sales of nearly $1.5 billion. Its share price on Nasdaq rose 18.82% overnight to $9.09.

The Silicon Valley firm is the biggest provider of fiber channel SANs and last year acquired an Ethernet product set when it bought Foundry Networks for $3 billion.

The news is another sign of consolidation in the IT services and data center markets. In the last 18 months Dell has bought Perot Systems, Oracle has absorbed Sun Microsystems and HP has acquired EDS.

With the market increasingly dominated by giants, and with Cisco entering the server business, Brocade has allied itself with large server vendors such as IBM and Dell, blogsite Data Center Knowledge notes.

At the same time HP has stepped up its focus on networking with an expansion of its ProCurve switching products.

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