Cisco Systems’ (s CSCO) decision to launch servers targeting the data center market has turned its allies against the company. To date, the biggest beneficiary of the Cisco-server blowback has been Juniper Networks (s JNPR) — now Brocade Communications (s BRCD) is now moving to take advantage of it as well. IBM, which already sells certain Brocade storage networking products, will now rebrand and sell Brocade switches under the IBM brand. Brocade, when it acquired Foundry Networks, gained a portfolio of IP switches; the IBM deal includes products that range from 10 GB switches to top-of-the-rack switching devices.
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Brocade already has storage partnership with HP (s HPQ), which also used to resell Foundry switches. With this new IBM partnership, Brocade suddenly is looking at an even healthier future. “From a dollar point of view it is hard to tell how big this deal is going to be, but for us having IBM as a partner is a big boost,” Marc Randall, a senior VP at Brocade, told us. “For now the products are focused on the data centers, but our Ethernet IP products can also play a big role in the campus environment.”
Randall wouldn’t specifically name Cisco but he did take a subtle jab at the San Jose, Calif.-based networking giant: “Customers are looking for choices and in Cisco’s environment, there isn’t much of a choice. Everything is from Cisco.”
Mark Sue, an analyst with RBC Capital Markets, in a recent note to clients wrote of Brocade: “The company may now be well positioned to meet and potentially exceed our earnings estimate for the full year. Expanding OEM opportunities on the Ethernet side with IBM and re-established ties with HP may further enhance our earnings outlook.” (Related Posts: How HP can fight Cisco & Win; Cisco’s Data Center moves to spark M&A)
…so what is HP going to do?
I bet HP goes on a buying binge soon enough. We outlined a list of companies HP can buy. Why not Brocade to start with 🙂 Riverbed is another one.
How would HP (or any Brocade buyer) deal with the revenue leakage? Brocade
‘s three largest customers are HPQ, EMC and IBM…..
It would be interesting to watch how the (innovation in )networking space evolves in next 4-5 years as Cisco is loosing it’s focus… It might even create another startup boom in networking like late 90’s…
the clash was inevitable. it is not the networking cabinet that is the interesting battle, it is touching the business process that is. there is a *huge* services industry build around aligning technology infrastructure (hardware and applications) to optimally support the business process. *that* is the IBM and HP crown jewel, being a trusted consultant to the CIO.
but things are changing – networks are becoming more important, the flow of information is now just as important as its safe location. business intelligence is dreived from that flow. thus the clash between the traditional enterprise technology stalwarts (IBM, HP. MSFT) and Cisco (as the latter pacman’d its way up the stack) was a long time coming.
let them al try to battle Cisco when it comes to networking. the *really* interesting battle however will be if Cisco can carve itself a niche touching the business process with its software.