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Broadcom reportedly mulling over Brocade purchase

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Brocade is reportedly on the verge of a sale with chipmaker Broadcom apparently one of the interested parties.

Brocade, which specializes in data and storage networking products, has struggled in recent years to compete with larger competitors who offer expansive portfolios of both hardware and software solutions, for example Cisco. The deal, first reported by Bloomberg, could be announced as early as this week, with Brocade currently commanding a market valuation of about $3.5 billion.

Buying a company like Brocade would be an attractive proposition for Broadcom, which would help the company build out its position in the growing cloud market. Broadcom already makes the chips that power switches in the data centre, though owning Brocade’s networking tech as well would certainly put it in a stronger position.

The core Brocade business, storage area networking, has been in decline in recent years though fortunes have been turned around by the acquisition of Ruckus Wireless in April. The purchase substantially bolstered its wireless networking offerings, targeting new opportunities in 5G, IoT, Smart Cities and LTE/Wi-Fi convergence.

“Brocade needs a wireless story, which is extremely important in today’s market if you’re going to be in the networking business,” said COO of Ruckus Wireless, Dan Rabinovitsj. “And Ruckus needs to say it can look in from the edge all the way back through to the switching and IT infrastructure into the data centre. The two are extremely complimentary from a tech perspective.”

Mitch Wagner over at our sister site Light Reading has provided some great in-depth insight into the potential deal which you can check out here.

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