Brocade has been the subject of acquisition rumors for about a year now, despite denials from its CEO Mike Klayko that it is for sale. No acquisition talk came up Wednesday during the vendor’s three-hour analyst day webcast, as Brocade executives tried persuading analysts and investors that the company is on its way to boosting its struggling Ethernet business while remaining a Fibre Channel networking powerhouse.
But that didn’t stop at least one analyst from playing matchmaker. Kaushik Roy of Wedbush Securities sees Brocade as a good fit for Dell. Dell’s rival Hewlett-Packard bought Ethernet networking vendor 3Com earlier this year and then outbid Dell for storage systems vendor 3PAR. There has been a lot of speculation that Dell would look for another target after failing to match HP’s final $2.35 billion offer for 3PAR.
“We believe that Brocade is an attractive acquisition candidate and its stock is cheap,” Roy wrote in a research note today. “Dell is following on the footsteps of HP and we think that acquiring Brocade would give Dell access to storage and data networking, important components of the data center.”
Brocade would give Dell something HP lacks — its own Fibre Channel networking products. Dell and HP both sell devices from Brocade and Cisco through OEM and reseller deals. HP was believed to be a suitor for Brocade last fall until it bought 3Com, but is unlikely to chase Brocade now just for its FC business.