Brocade was mentioned as a possible acquisition by some in the IT industry last fall after Dell stepped back from the 3PAR bidding war with HP. Industry rumors or speculations are not new involving Dell and Brocade some going back a year or more (or here or here).
Last fall I did a blog post commenting that I thought Dell would go on to buy someone else (turned out to be Compellent and Insight One). Those acquisitions by Dell followed their purchases of companies including Scalent, Kace, Exanet, Perot, and Ocarina among others. In that post, I also commented that I did not think (at least at that time) that Brocade would be a likely or good fit for Dell given their different business models, go to market strategy and other factors.
Dell is clearly looking to move further up into the enterprise space which means adding more products and routes to market of which one is via networking and another involves people with associated skill sets. The networking business at Dell has been good for them along with storage to complement their traditional server and workstation business, not to mention their continued expansion into medical, life science and healthcare related solutions. All of those are key building blocks for moving to cloud, virtual and data storage networking environments.
Dell has also done some interesting acquisitions around management and service or workflow tools with Scalent and Kace not to mention their scale out NAS file system (excuse me, big data) solutions via Exanet and data footprint reduction tools with Ocarina, all of which have plays in the enterprise, cloud and traditional Dell markets.
But what about Brocade?
Is it a good fit for Dell?
Dell certainly could benefit from owning Brocade as a means of expanding their Ethernet and IP businesses beyond OEM partnerships, like HP supplementing their networking business with 3COM and IBM with Blade networks.
However, would Dell acquiring Brocade disrupt their relationships with Cisco or other networking providers?
Would Cisco counter with a deal Dell could not refuse to tighten their partnership at different levels perhaps even involving something with the UCS that was discussed on a recent Infosmack episode?
How would EMC, Fujitsu, HDS, HP, IBM, NetApp and Oracle among others, all of who are partners with Brocade respond to Dell now becoming their OEM supplier for some products?
Would those OEM partnerships continue or cause some of those vendors to become closer aligned with Cisco or others?
Again the question, will Huawei sit back or decide to enter the market on a more serious basis or continue to quietly increase their presences around the periphery?
Brocade could be a good fit for Dell giving them a networking solution (both Ethernet via the Foundry acquisition along with Fibre Channel and Fibre Channel over Ethernet (FCoE)) not to mention many other pieces of IP including some NAS and file management tools collecting dust on some Brocade shelf somewhere. What Dell would also get is a sales force that knows how to sell to OEMs, the channel and to enterprise customers, some of whom are networking (Ethernet or Fibre Channel) focused, some who have broader diverse backgrounds.
While it is possible that Dell could end up with Brocade along with a later bidding battle (unless others just let a possible deal go as is), Dell would find itself in new and unfamiliar waters similar to Brocade gaining its feet moving into the Ethernet and IP space after having been comfortable in the Fibre Channel storage centric space for over a decade.
While the networking products would be a good fit for Dell assuming that they were to do such a deal, the diamond in the rough so to speak could be Brocade channel, OEM and direct sales contact team of sales people, business development, systems engineers and support staff on a global basis. Keep in mind that while some of those Brocadians are network focused, many have connected servers and storage from mainframe to open systems across all vendors for years or in some cases decades. Some of those people who I know personally are even talented enough to sell ice to an Eskimo (that is a sales joke btw).
Sure the Brocadians would have to be leveraged to keep selling what they have done, a task similar to what NetApp is currently facing with their integration of Engenio.
However that DNA could help Dell set up more presences in organizations where they have not been in the past. In other words, Dell could use networking to pull the rest of their product lines into those accounts, vars or resellers.
Hmmm, does that sound like another large California based networking company?
Here are some related links to more material:
Ok, nuff said for now
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