Channel Marker

Jun 7 2011   4:57PM GMT

Rumor alert: Dell to buy Brocade?

PatOuellette Pat Ouellette Profile: PatOuellette

There are rumors swarming that
Dell may buy Brocade Communications Systems Inc. Brocade is respected for its high-end SAN networking gear and owns 70% of the SAN switching market, and would be a good target for Dell because of its Ethernet switching. Or at least that’s what several Wall Streeters say.

Raymond James analyst Brian Alexander explained why a deal like this would make sense for Dell in a note to clients:

“We believe Dell is looking to acquire a networking company given management’s view that owning intellectual property across the data center stack (servers/storage/networking) is strategically important.”

Brocade would come at a price. Last week, the company hit its 52-week high. As of today, Brocade’s market cap stands at $3.36 billion.

More talk about a Dell-Brocade deal here.

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