Extreme Networks Buys Brocade in Network Boosting Bid

Commonly, there are two ways to advance a product line: develop it in-house or buy someone else's developments. While there are advantages to each approach, buying a pre-built product line and marketing it is often much faster than developing internally. Extreme Networks recently showed this tactic off to its fullest, spending $55 million to buy Brocade Communications Systems from Broadcom to enhance its data center network line of offerings.

There was no word as to how many of Brocade's employees would make the jump to Extreme Networks, which suggests the number is less than 100 percent.  “No layoffs” is commonly regarded as a terrific marketing and public relations hook, and it'd be hard to see conditions where shouting “no layoffs” from the rooftops wouldn't help, but that's strictly speculative.

This is just the latest move in Extreme's hot streak of buying these days; back in October, Extreme picked up wireless LAN capability from

Zebra Technology. While the Brocade buy is subject to standard closing conditions, few see any trouble ahead on that front. It's something of a noteworthy buy on the other side of the coin as well; reports suggest Broadcom paid around $5.5 billion for Brocade, though it sold off the Ruckus Wireless segment of that for $800 million.

With Brocade's data center network business in Extreme Networks' hands, according to Extreme Networks' president and CEO Ed Meyercord, the company will be better able to offer services in the high-end data center market, while also bolstering its “...strategy of delivering software-driven networking solutions focused on enterprise consumers.”

Meyercord elaborated, saying, “Extreme is the only pure-play end-to-end, wired and wireless enterprise IP networking company in the world, we believe Brocade's data center customers will benefit from our dedication to delivering high-quality, software-driven, secure networking solutions and the industry's highest rated customer support.”

Adding all of this up is a strange equation; Extreme Networks bought Brocade for essentially pennies on the dollar, isn't talking layoff figures, and is on an absolute purchasing tear. Though it's easy to see why Extreme picked up Brocade—the ability to provide services in a growing market is generally a smart move to have on hand—the circumstances around the deal itself look something like a fog bank on a minefield. What happened at Broadcom to make this look like a good idea?

Though this deal leaves plenty of questions in its wake, the end result looks great for Extreme Networks, which just landed a great new punch to its data center network capabilities in a field where data centers are more valuable than ever.

Edited by Alicia Young