Daily Archives: October 10, 2009

Brocade Leak Far From Brilliant

Mark Veverka of Barron’s thinks that Brocade or its investment banker was exceedingly clever in leaking that the storage-networking vendor is up for grabs.

At this point, I disagree. The move was bold or desperate, depending on whether one wishes to be generous or censorious, but it hasn’t produced the desired result.

If the intention was to create the impression that Brocade is being pursued passionately by numerous ardent suitors, the leak has been an outright failure.

Let’s review the potential acquirers.

HP seems to have appraised the goods and backed off. Larry Ellison, Oracle’s all-powerful CEO, unambiguously and forcefully announced that his company wasn’t interested in buying Brocade. Juniper seems more likely to be acquired than to be an acquirer. EMC likes its lucrative partnership with Cisco, and is extremely unlikely to compete against the networking titan. Dell is digesting its Perot acquisition, seems to be aiming its enterprise efforts at government and healthcare verticals, and doesn’t really get the converged-datacenter strategies that Cisco, HP, and IBM are pursuing.

That brings us to IBM, which could be a buyer, but seems to believe, for now, that the game is not worth the candle. For now, IBM’s approach to data-center conversion deemphasizes network and server hardware in favor of software intelligence, standards-based technologies, and professional services.

Was it smart for Brocade to leak its availability as an acquisition target? If the leak achieved the desired result, the answer would be yes. What we’ve seen so far argues that the answer is no.