Dell to make a play for Brocade?

After losing out to Hewlett Packard Development Co. LP on 3Par Inc., will Dell Inc. now make a play for Brocade Communications Systems Inc.?

That’s a scenario presented this week from investment firm Oppenheimer & Co., which issued a report speculating on possible merger and acquisition activity in storage after HP’s winning $2.4 billion bid for 3Par, a Fremont, Calif.-based data centre storage vendor. An Oppenheimer analyst believes Dell might be the most aggressive vendor in the storage M&A scene.

“We expect Dell, which we view as weak overall within the enterprise, to continue to aggressively expand its storage presence and perhaps even venture into networking,” states Oppenheimer analyst Ittai Kidron in his report. “HP is more well rounded, but could also add a few pieces to the puzzle. We believe IBM, EMC and NetApp could be active but are likely to be less aggressive given their position and relative portfolio completeness.”

Oppenheimer sees the “most likely” M&A moves as Dell acquiring Brocade or Compellent Technologies Inc. or CommVault, and EMC Corp. acquiring Isilon Systems Inc. Brocade would provide a “strong” storage-area network switching business and “solid” Ethernet installed base to Dell, enabling the server company “to move upward in the enterprise and the data center,” Kidron writes. Another potential storage option for Dell is Pillar Data Systems Inc., and possibly data warehousing players Teradata Corp. or Netezza Corp., Kidron states.

“We believe Dell is in the most pressing need for further M&A and we think it could expand into networking to become an end-to-end player,” he writes.

Brocade has been rumored to be an acquisition target for the past year or so. Company CEO Mike Klayko has sought to deflect talk of Brocade being acquired.

Meanwhile, EMC lacks a “true scale out” network-attached storage platform, according to Kidron. As a result, EMC may be looking at Isilon.

“We think Isilon is the best fit for EMC with strong scalability and momentum in high-end virtualized environments,” the Oppenheimer report states. EMC could also pursue private player Caringo for digital content storage, the firm posits.

IBM Corp. doesn’t have an immediate need to extend its storage portfolio but it does lack an in-house iSCSI product, Oppenheimer notes. It may make a play for some of the smaller iSCSI vendors, such as BlueArc, DataCore, FalconStor and Nimbus Data Systems, as well as a data warehousing company like Netezza, the firm states.

NetApp is not expected to make much of any noise in M&A since it already offers “a fully baked unified storage platform,” Oppenheimer states. But like with EMC, scale out NAS is “an area of concern” for the company, Kidron notes.

And after winning 3Par, no major near-term moves are expected by HP either. But Compellent could bulk up HP’s mid-range storage offerings; and HP could target Teradata or Netezza if it sought to bolster its data warehousing portfolio, Oppenheimer states.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Cybersecurity in 2024: Priorities and challenges for Canadian organizations 

By Derek Manky As predictions for 2024 point to the continued expansion...

Survey shows generative AI is a top priority for Canadian corporate leaders.

Leaders are devoting significant budget to generative AI for 2024 Canadian corporate...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now