Brocade Beefs Up Services With VAR Acquisition
It is also the latest in a string of vendor acquisitions of solution providers aimed at beefing up services.
Brocade Communications Systems, the San Jose, Calif.-based developer of data center networking solutions, said last week it has signed a definitive agreement to acquire Strategic Business Systems (SBS), a privately held Herndon, Va.-based provider of IT professional services for medium-size and large commercial and federal government enterprises.
SBS is only the latest acquisition in Brocade's plan to develop its growing services business as quickly as possible in order to help customers build their data infrastructure and move and protect data, said Matt Lindeman, senior manager for services development at the vendor.
For instance, Lindeman said, Brocade acquired rival Fibre Channel switch and director McData for $713 million in January of 2007, giving it new mainframe storage, backup, and extended distance backup services.
Brocade also acquired NuView, a developer of file area network services, for $60 million in March of 2006, Lindeman said.
As a result of these acquisitions, Brocade is now offering a variety of data protection services, including backup and recovery, as well as data security services including SAN security and audits, and local and long-distance data migration services.
SBS adds server virtualization services to the mix, Lindeman said.
"As we get into bigger and bigger discussions with customers about their data center fabrics, they are talking about moving to new infrastructure," he said. "But when they talk SANs, it's not so smooth. Virtualization is a lot of crazy things. It's hard to stabilize. Security as users are moving their data as environments change is a real struggle."
SBS brings Brocade solid server virtualization skills and experience working with large clients, especially in the government market, Lindeman said. "We want to make sure the server virtualization guys in our company and the storage guys get together to solve customer issues," he said.
Brocade currently offers professional services direct to some customers, and through both direct and indirect sales channels of OEM partners such as EMC, of Hopkinton, Mass.; Hewlett-Packard, of Palo Alto, Calif.; and IBM, of Armonk, N.Y.
Lindeman said he is unable to forecast how Brocade's OEM partners, who account for the bulk of the company's sales, will use the new services from SBS to help channel partners.
"Our OEMs work with us in areas they struggle with, like SAN assessment," he said. "We don't get pulled in a deal because we're a low-cost provider. It's because we have a deep skill."
Brocade declined to discuss the financial details of the deal, and now many personnel SBS has. The deal is expected to close during the company's second fiscal quarter, which ends April 30. After the acquisition, SBS will become a wholly-owned subsidiary of Brocade.
Brocade is the second vendor to buy a solution provider with server virtualization experience.
VMware, of Palo Alto, Calif., in January acquired Foedus, a Portsmouth, N.H.-based provider of virtualization technologies and services, to help solution providers work with the vendor in the nascent desktop virtualization market.
EMC in August acquired BusinessEdge Solutions, East Brunswick, N.J., its fourth solution provider in under two years, with an aim to beefing up its services business, but it says other solution providers should not be concerned the company is lessening its channel focus.