Broadcom has acquired Brocade for a cool $5.9 billion (4.7 billion), offering the opportunity for the chip business to include wireless technologies linking data centres and storage.
The announcement comes as chip makers like Broadcom are forced to diversify offerings because customers are expecting them to offer a wider variety of solutions.
"This strategic acquisition enhances Broadcom's position as one of the leading providers of enterprise storage connectivity solutions to OEM customers," Broadcom CEO and president Hock Tan said. "With deep expertise in mission-critical storage networking, Brocade increases our ability to address the evolving needs of our OEM customers."
Adding Fiber Channel Storage Area Network (FC SAN) into the mix will mean Broadcom can better serve enterprise customers - a sentiment supported by Brocade.
"Our best-in-class FC SAN solutions will help Broadcom create one of the industry's broadest portfolios for enterprise storage," Brocade's CEO, Lloyd Carney, added.
Although Broadcom will integrate Brocade's Fibre Channel SAN Switching business into its offering, the company will not take on Brocade's IP networking business, including its wireless and campus networking, data center switching and routing, and software networking solutions, which it believes will compete too closely with Broadcom's key customers including Cisco.
However, Broadcom has offered to help Brocade find a buyer of its IP networking business. "We will work with Broadcom as it seeks to find a buyer for our IP Networking business," Carney said.
"We are confident that we will find a great home for Brocade's valuable IP networking business that will best position that business for its next phase of growth," Tan agreed.
