Oracle Not Interested in Brocade

Brocade might be for sale, but Oracle CEO Larry Ellison says his company won’t be the buyer.

Ellison disavowed interest in Brocade during a keynote address to shareholders attending the company’s annual meeting this evening.

As I discussed earlier today, Oracle was unlikely to acquire Brocade. Oracle is preoccupied, waiting to see whether the European Commission will approve its $7.4-billion acquisition of Sun Microsystems.

Sun’s technologies, including its OpenSolaris operating system, would likely form the basis for an Oracle foray into computer networking. Until the Sun acquisition gets the official nod, Oracle won’t even begin to consider how it can pursue a converged data-center strategy with acquisitions of network-equipment vendors. Even if it does decide subsequently to make networking acquisitions, Brocade might not be its first choice.

With Oracle out of the running, and HP apparently not interested in taking the plunge (at least for now), who else might be interested in buying Brocade? Juniper was mentioned as a potential buyer, but I can’t see it, for the reasons I put forward in my earlier post.

As noted in those jottings, IBM is probably the player whose eye Brocade wants to catch. That doesn’t mean IBM will pay notice, even though it does account for approximately 20 percent of Brocade’s revenue through a reseller/OEM partnership. IBM is pursuing a data-center strategy that emphasizes software intelligence and systems integration, relegating hardware to nothing more than underlying plumbing.

Now that Larry Ellison has failed to play along with Brocade’s head fake, the networking vendor and its agent, boutique investment bank Qatalyst, are left feeling like liquor salesmen in a dry county: they’re ready to do business, but nobody’s able or willing to buy the goods.

One consolation, though it might be short-lived, is that Brocade’s shares have appreciated in value as the takeover talk has intensified.

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