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HP or Juniper to buy Brocade?

A year ago Brocade was a buyer. Now its a seller and HP or Juniper might be buying.

Citing unnamed sources, The Wall Street Journal reported yesterday that Brocade Communications has put itself up for sale. This news comes less than a year after Brocade closed on its own acquisition of Foundry Networks, a $3-billion deal which gave the Fiber Channel storage networking market leader a broad portfolio of high-performance Ethernet switches and a variety of other data center networking products. Brocade has since inked some high profile OEM agreements with companies like IBM, creating a promising sales channel for the Ethernet products.

The Journal reported that HP and Oracle were likely suitors for Brocade. Oracle seems like a strange fit, but HP makes sense, given that Brocade’s former Foundry switches would fill a gap in HP’s ProCurve switching portfolio. ProCurve lacks a track record in high density Ethernet switches, something Foundry specialized in. The deal would also boost its storage business and give HP a much broader overall suite of data center products.

Now Journal blogger Michael Corkery speculates that Juniper might be a buyer for Brocade, too. Known more for its service provider routing business, Juniper recently rolled out its own line of enterprise Ethernet switches, but it has $2 billion in cash. A Brocade acquisition would give Juniper a much more established switching business, plus a lucrative storage networking business with deep and successful partnerships with IBM and EMC.  But Juniper’s stated switching strategy is centered around the concept of having one operating system, JUNOS, across all of its networking products. Buying Brocade would force a complete change in direction.

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