Extreme snaps up Brocade’s data centre networking business

30 Mar 201718 Shares

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The breaking up of Brocade was predicted last year, with the latest swipe being taken by Extreme Networks in a $55m data centre deal.

Extreme Networks is adding to its growing data centre operations, forking out $55m for Brocade’s switching, routing and analytics business.

The move is expected to add significantly to Extreme’s revenues in 2018, ultimately helping it to breach the $1bn mark.

This is the next stage in Brocade’s redesign, following the purchase of the company by chip maker Broadcom for $5.5bn.

The decision for Broadcom to get a better foothold in the data centre products market made sense, given its current – and predicted – lucrative status. IDC estimated that it was worth more than $37bn last year.

At the time, Broadcom revealed plans to shed its networking capabilities in order to prevent any tangible competition with Cisco Systems.

Last month, Broadcom announced it would sell off Brocade’s Ruckus Wireless Wi-Fi business to Arris International for an expected $800m, when the full $5.5bn deal is confirmed later this year.

“The addition of Brocade’s data centre networking business significantly strengthens our position in the expanding high-end data centre market and reinforces our strategy of delivering software-driven networking solutions focused on enterprise customers,” said Ed Meyercord, president and CEO of Extreme Networks.

Extreme has a close relationship with Broadcom, with its 200 Series of value-oriented switches already leveraging Broadcom’s Fastpath operating system software.

It has been very active in acquisitions prior to this move, too. Already this month, Extreme entered into an agreement with Avaya to be the stalking horse bidder to acquire its networking business in an auction process.

In October 2016, Extreme bought Zebra Technology’s LAN business. Between the two moves, $215m is expected to be added to annual revenues, with the Brocade deal bulking that up to nearly $450m.

“Extreme is highly complementary to our data centre switching, routing and analytics business on many levels, and represents a positive outcome for our customers, partners, and employees,” said Lloyd Carney, CEO of Brocade.

“Our two companies have similar strategic visions and believe that innovation will increasingly be driven through software capabilities that allow customers to successfully transform their networks for digital business.”

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Gordon Hunt is a journalist at Siliconrepublic.com

editorial@siliconrepublic.com