QLogic Acquires Brocade FC and CNA Business

Brocade’s press release

Brocade Communications Systems, Inc. announced the sale of its network adapter business to QLogic Corp., as part of its stated business strategy to focus on meeting the data center networking needs of customers through next-generation fabrics and software defined networking – the two critical building blocks for modern data centers.

As part of this transaction, the two companies have committed to work together closely to affirm their commitment to the SANing industry, collaborate on the development of the next generation Gen 6 FC technology, and strengthen the FC vendor ecosystem for the benefit of mutual customers.

The firms did not disclose the financial terms of the sale, citing non-materiality for either company’s business.

Divestiture includes entire Brocade network adapter product portfolio:

• Brocade 1860 Fabric Adapters
• Brocade 815/825 and 415/425 FC HBAs, or HBAs
• Brocade 1010/1020 Converged Network Adapters, or CNAs
• HBA and CNA mezzanine adapters for select OEM partners

“This transaction continues the execution of our business strategy, which will further enable Brocade to focus on core networking technologies in the data center in order to better serve our customers and partners and to drive better value for our shareholders,” said Ken Cheng, CTO and VP of corporate development and emerging business, Brocade. “This transaction also benefits our customers through the two companies firmly committing to the success of the current Gen 5 FC technology as well as Gen 6 technology, which is now in development.“

Brocade had included the expected impact of this transaction in the two-year non-GAAP financial model presented at its September 2013 Analyst Day and will provide an update during its Q1 FY14 earnings call in February.

QLogic’s press release

QLogic Corp. and Brocade Communications Systems, Inc. announced a broad technology alliance agreement that will enhance end-to-end storage connectivity for end users and accelerate innovation in SANs.

Under the terms of the agreement, QLogic and Brocade will:

• Jointly develop capabilities to enhance FC technology on an end-to-end basis with improved performance, manageability and reliability for enterprise customers
• Align on product plans and testing to accelerate deployment of Gen 5 and Gen 6 FC technology
• Jointly market and evangelize advanced SAN solutions for the next-generation data centers

“Brocade and QLogic pioneered FC and brought SANs into the mainstream enterprise,” said Jack Rondoni, VP of product management, Brocade. “Both companies have a long history of delivering innovative, high-performance connectivity solutions to address enterprise IT needs, and with this agreement we will accelerate innovation for the next generation of storage networking.”

“QLogic and Brocade are in a unique position in the industry. Between our two companies, we have the ability to innovate on server, fabric and storage connectivity to deliver end-to-end optimized solutions for our customers,” said Amit Vashi, VP of products, technology and planning, QLogic. “Working together with Brocade will also allow us to accelerate the adoption of new SAN technologies and drive the future of FC.”

In connection with the technology and marketing alliance agreement, QLogic also acquired Brocade’s FC and CNA business. This further extends QLogic’s market leading adapter offerings and ensures continuity of supply to current Brocade customers.

This acquisition is not expected to have a material impact on the operating results of QLogic.