Extreme Networks today said it has completed its acquisition of Brocade Communications’ data center switching, routing, and analytics business. This is the third in a series of acquisitions announced by Extreme in the last year, including its acquisition of Zebra Technologies’ WLAN business and Avaya’s networking business.
“We have now significantly strengthened our position in the expanding high-end data center market with the industry leading solution for enterprise customers,” said Ed Meyercord, president and CEO of Extreme Networks, in a statement.
With the close of this acquisition, Extreme acquires customer relationships, personnel, and technology assets from Brocade including the SLX, VDX, MLX, CES, CER, Workflow Composer, Automation Suites, and certain other data center related products.
Nabil Bukhari, VP of data center, formerly of Brocade and now with Extreme Networks, said in a statement, “Our strategic vision has been closely aligned with Extreme Networks’ vision throughout this process.” Bukhari said Extreme plans to build on the momentum that Brocade has achieved, including a completely refreshed data center portfolio that Brocade built over the past year.
Extreme continues to project that the Brocade acquisition will generate over $230 million in annualized revenue.
The Hitch in the GiddyUp
There’s obviously a problem with Broadcom’s purchase of Brocade for $5.9 billion, which was originally announced in November 2016. Earlier this month, the parties said there was a delay due to a review by the Committee on Foreign Investment in the United States (CFIUS). Brocade and Broadcom agreed to extend the CFIUS review another 45 days. They said they anticipate the acquisition to be completed by November 30.
It’s unclear just what the holdup is about. It could stem from national security concerns related to investments by Chinese companies. Broadcom is domiciled in Singapore and headquartered in San Jose, California. CFIUS is an interagency body that assists the U.S. President in overseeing the national security aspects of foreign direct investment in the U.S. economy. Ultimately, President Trump, himself, could decide the fate of the Broadcom-Brocade deal.
“The whole process is usually pretty opaque,” said IDC analyst Brad Casemore. “Some people are speculating that the deal may not go through. That was why I think Extreme wanted to decouple from this whole Broadcom-Brocade transaction.”
But Arris’ arrangement to buy Brocade’s Ruckus wireless assets and ICX switch business for $800 million is still contingent on the Broadcom deal. If Broadcom does not purchase Brocade that would leave Brocade with its fibre channel SAN business and the assets Arris wants to buy.
“Brocade tried to be an end-to-end networking company, but it’s pretty tough to go back when you’ve sold a lot of those assets,” said Casemore.