Computer maker Dell could move to acquire Brocade in its bid to increase its networking portfolio.
According to an article on Barron’s Canaccord Genuity’s Paul Mansky wrote in a note that ‘now is the time’ for Dell to expand its networking portfolio by acquiring Brocade.
Dell has a decent portfolio for servers, storage, data centres and other related services but it remains short of a core networking offering.
The financial pundit says that Brocade will be the target of an acquisition should Dell decide to make one, having more than $7 billion in cash.
Dell will not only get a decent networking portfolio, it would also be able to draw on Brocade’s 70 percent share of fibre channel storage networking market, which has a high return on investment.
Mansky also pointed out that Dell could also go for Juniper Networks but then added that it won’t because Juniper derives its revenues from carriers and not enterprise customers. Another reason cited by Mansky is that Juniper comes with a market cap of $18 billion while Brocade has a market cap of $3 billion.