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Chipmaker Broadcom To Buy Network Gear Maker Brocade For $5.5 Billion (reuters.com)

Posted by BeauHD on from the divide-and-conquer dept.

An anonymous reader quotes a report from Reuters: Chipmaker Broadcom Ltd said it would buy Brocade Communications Systems Inc for $5.5 billion, pushing deeper into the fast-growing market for network equipment used in data centers. The deal, the latest in a consolidating chip sector, will allow Broadcom to corner a larger share of the data center products market by using Brocade's fiber channel switches that speed up data transfer between servers and storage devices. Singapore-based Broadcom, formerly Avago Technologies, is known for its connectivity chips used in products ranging from mobiles to servers, while California-based Brocade makes networking switches, software and storage products. Broadcom said it planned to sell Brocade's networking business, which makes controllers and access points that help businesses offer high-speed internet to their customers, to avoid competing with its top customers such as Cisco Systems Inc.

17 of 33 comments (clear)

  1. Sounds like good news - for Cisco by haruchai · · Score: 1

    Who'll buy the pieces Broadcom doesn't want

    --
    Pain is merely failure leaving the body
    1. Re:Sounds like good news - for Cisco by haruchai · · Score: 1

      missing question mark - sigh.
      Slashdot, its way pas time for an edit feature.

      --
      Pain is merely failure leaving the body
    2. Re:Sounds like good news - for Cisco by haruchai · · Score: 1

      GAH!!!! Another typo - "way PAST time" not "pas" time

      --
      Pain is merely failure leaving the body
    3. Re:Sounds like good news - for Cisco by TFlan91 · · Score: 1

      just to drive home the point, eh?

    4. Re:Sounds like good news - for Cisco by haruchai · · Score: 1

      I also made an "its" instead of "it's" typo. Not my finest hour.

      --
      Pain is merely failure leaving the body
    5. Re:Sounds like good news - for Cisco by Kjella · · Score: 1

      missing question mark - sigh.

      GAH!!!! Another typo - "way PAST time" not "pas" time

      I also made an "its" instead of "it's" typo. Not my finest hour.

      Don't worry, go join a game company. They're all in the "ship this steaming pile now, we'll patch it later" mode. I kinda like the discipline, you get it right the first time or you look the fool except here it doesn't really matter. Maybe I should send some of my fellow developers to take a /. class before I let them push code to production, maybe they'd get better at QA. Or not, you've been here longer than me...

      --
      Live today, because you never know what tomorrow brings
  2. well, good by slew · · Score: 1

    At least I won't get broadcom and brocade confused anymore ;^)

  3. Offworld please by wjcofkc · · Score: 2

    Can we stop moving some of this off world yet? According to Sci-fi it will buy us some time. If we have a strong GA Authority that is. But seriously, can we either do that or leave this fucking planet by the few best (not me) and become the survivors already. I don't see many possibilities that are not bound to fail. Mars it is, send the best only and cross your fingers.

    --
    Brought to you by Carl's Junior.
  4. new product line coming... by Anonymous Coward · · Score: 1

    the brocade name will be retired in favor of the new broadcom cockblock.

  5. Why? by Daniel+Boisvert · · Score: 3, Interesting

    This acquisition doesn't make any sense to me. Broadcom is buying all of Brocade, selling off the pieces poised to grow in the wireless and IP networking segments, and keeping the part that serves the shrinking storage-specific networking market? Can somebody explain this to me?

    I hope they don't wreck the IP networking and wireless companies. I really like the Brocade VCS fabric stuff and Ruckus wireless kit..

    1. Re: Why? by Anonymous Coward · · Score: 1

      This is a financial buyout, plain and simple. Broadcom (Avago) will keep the fibre channel business that makes money while cutting fat to improve the bottom line. And I am willing to bet Brocade has a lot of it.

      It helps that fibre channel is a funny business. There are standards but interoperability is atrocious. There are only 2 major players on the switch side (brocade and Cisco) and there were only 2 players on the HBA side, one of which was acquired by Broadcom (Emulex) and the other by Brocade (qlogic). The plan must be that with switch + hba under one roof, it will be easier to offer a cohesive solution. Sure, it's a shrinking market, but its also captive and still worth many B$ for some years to come.

      As for the so called growth areas, it's only worth playing there if you are growing with them. And quite clearly, Brocade is not so they are just a hit on the bottom line. Doesn't matter if Brocade/com can sell them or not, tax write offs are a wonderful financial tool.

      Take always :

      Brocade management broadsided their employee's trust, however they may phrase it.

      It must be slim pickings out there for Broadcom to find a leveraged financial opportunity in a shrinking market.

      Bottom line - If they can make the numbers work as with previous acquisitions, the market is going to love it.

  6. Thats a cool story by future+assassin · · Score: 1

    Bro...

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    by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
  7. Cisco's not interested by seoras · · Score: 4, Interesting

    When Cisco closed down their European R&D centres in Edinburgh & Reading, Brocade came in and picked up the redundant developers.
    Cisco has lost interest in R&D and has positioned itself as a solutions provider following much the same evolution as IBM.
    Buying back what they threw away just doesn't make sense given their lack of interest in selling boxes.

    I know all this because I setup Cisco's R&D in Edinburgh when Shiva Networks closed down their acquisition Spider Systems.
    My friends working at Brocade are, understandably, very concerned about this acquisition.
    They are part of a core group of highly experienced (25+ years) network equipment developers who have never changed jobs other than when they've been acquired or laid off. (Spider->Shiva->Cisco->Brocade)
    There's little chance another Brocade will come and save them a 4th time as the network industry has matured to a point where routers and switches are now commodities and if anyone is still developing them they aren't in the UK.

    1. Re:Cisco's not interested by haruchai · · Score: 1

      Very interesting. But a talent pool like that must be useful to someone. Maybe Google or Facebook - or Microsoft?

      --
      Pain is merely failure leaving the body
  8. Bummer by RogueWarrior65 · · Score: 1

    Now I'm bummed that I sold my shares after they acquired Ruckus.

  9. Re:Great... by unixisc · · Score: 1

    Why, what does Brocade currently work w/?

  10. What's w/ Broadcom by unixisc · · Score: 1

    A few things that struck me, since I haven't been following them closely: Broadcom is now Singapore based? And what is Avago - a Singapore company that bought Broadcom? Last I looked - albeit a while ago - they were based in S CA.

    Referring to the GP, is the wireless segment still growing? It seems to me to have reached saturation, and the wireless space is one more that has seen a lot of consolidation, particularly among chipset vendors