Cisco VARs Not Scared of Brocade/Foundry Union

The acquisition brings together Brocade, seen by some solution providers as a channel-friendly player with a strong OEM strategy, and Foundry, a networking player that derives the majority of its revenue through direct sales.

Brocade Monday unveiled plans for a $3 billion acquisition of Foundry in a move that will bring the Santa Clara, Calif.-based vendor's networking portfolio of enterprise routers, switches, security and traffic management products into the Brocade fold.

The move positions Brocade as the only alternative to Cisco for end-to-end data center solutions, Marty Lans, Brocade's senior director of data center marketing, told ChannelWeb.

"We believe that to do this new data center, right now Cisco is the only option for the total end-to-end space. We provide an alternative," Lans said.

A Cisco spokeswoman said via e-mail that the company does not comment on competitor's announcements, but noted that "Cisco remains confident that we will continue to lead in delivering comprehensive, end-to-end data center solutions that meet our customers' critical business needs and fulfill our vision for helping to create next generation data centers, based on the Cisco Data Center 3.0 vision."

Several solution providers said that Brocade's plan to buy Foundry makes sense, given the trend toward the convergence of storage and data networking in today's virtualized data centers.

Still, the match-up of Brocade vs. Cisco does evoke images of David and Goliath. Combined, Brocade and Foundry have a current market capitalization of some $5 billion and sales of $1.85 billion for 2007, compared to Cisco's market capitalization of $129 billion and sales of $34.92 billion in 2007.

Cisco partners said Foundry lacks the networking muscle to add much oomph to Brocade's battle with the networking giant.

"We have competitors all around, but I don't see how this makes them more powerful," said Mont Phelps, president and CEO of NWN, a Waltham, Mass.-based Cisco partner. Phelps noted that Brocade is a significant player in the storage space but said he doesn't see Foundry "as a substantial factor" in the networking market.

Pat Scheckel, senior director of the solutions practice at Vernon Hills, Ill.-based CDW, who joined the direct market reseller via its acquisition of Cisco-focused solution provider Berbee, said he doesn't expect Brocade to pick up any market share gains from its Foundry purchase.

"Will Brocade take Cisco share by doing this? I just don't see it," Scheckel said. "You're either a Brocade shop or a [Cisco] MDS shop, and you're a Cisco shop or a Foundry [shop]."

For Mark Teter, CTO at Advanced Systems Group, a Denver, Colo.-based solution provider that works with all three vendors, the Brocade/Foundry deal isn't about market share. It's about choice.

"People want a choice, and Foundry was really becoming that choice in Layer 2 switches and some of the router space, so I think it's a good match ... Money well spent," Teter said.

NEXT: Challenges Loom For Brocade/Foundry