Oracle could buy Brocade Communications: analyst
Thursday, September 9, 2010 9:01 AM EDT
Oracle could buy Brocade Communications: analyst
By IBTimes Staff Reporter
Oracle could consider buying networking company Brocade Communications Systems to augment its Cloud-related infrastructure portfolio, an analyst at ThinkEquity said.
Research firm IDC expects spending on cloud computing to rise to $55.5 billion in 2014 from $16.5 billion in 2009 as businesses realize it can be cheaper to outsource their data centers than to build and manage their own.
Enterprise software major Oracle may want to boost its datacenter portfolio for competing in the Cloud market against the likes of HP and IBM, and Brocade should provide Oracle with a stronger data center end-to-end footprint covering both storage area and local area networking.
A storage area network (SAN) is an architecture used to attach remote computer data storage devices such as disk arrays, tape libraries, and optical jukeboxes to servers so the devices appear as locally attached to the operating system. Meanwhile, a local area network (LAN) is a computer network covering a small physical area, like a home, office, or small groups of buildings, such as a school, or an airport.
"Considering recently hired Executive Mark Hurd's preference for cheaper deals, we believe Brocade could be a target for Oracle," analyst Rajesh Ghai wrote in a recent note.
Ghai also said though Oracle may not be able to overcome the inherent sluggishness in the Fibre Channel business, it could execute more effectively than Brocade on the go-to-market strategy.
"This possibly makes Brocade more valuable to Oracle than if Brocade stayed independent," the analyst said.
Shares of Brocade Communications closed at $5.87 Wednesday and Oracle ended at $24.14 on Nasdaq.