Brocade on the Block?
- Growth forecast for FCoE and 8Gbps/16Gbps are not nearly as high as some vendors expected.
- FCoE will be the future transport but most anticipate the future to be 3 to 5 years off instead of 1 to 3 years, based on our data.
- End users currently associate FCoE with VMWare server growth and other non-mission critical apps so they can slow FC growth. In other words, substitution technologies, not additive.
- Upgrade activity from 4Gbps to 8Gbps is moving at half the pace of the 2Gbps to 4Gbps rates. Storage switch port growth rates are slowing in the large enterprise with VMware adoption rates. Switch port counts may actually decrease in some shops.
A number of possible suitors have been mentioned including Hewlett-Packard and Oracle. Also in the mix, one would imagine, would be EMC, Juniper, and IBM. HP was the company most prominently mentioned so we took an early look at what an HP and Brocade combination would look like. Brocade’s storage and networking business would be complementary to HP’s business as well as additive to its revenue although Brocade’s reseller and OEM partners may change. It would put them in even more direct competition with Cisco, as well as help them improve in several key areas. On the Oracle front, end users are unsure of Oracle’s commitment to hardware with the Sun acquisition. Acquiring Brocade only makes sense if Oracle is committed to keeping the Sun hardware business.
Again, none of the companies involved has confirmed anything in the WSJ article so we will have to stay tuned to see how this plays out. However, given the consolidation we continue to see in the market we believe this situation is more a matter of when rather than if.
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