Brocade, Dell Extend Pact

Dell Technologies (Nasdaq: DELL) is reportedly extending its OEM agreement with Brocade Communications Systems Inc. (Nasdaq: BRCD), following IBM Corp. (NYSE: IBM) in trying to wrap servers and Ethernet/IP gear into an all-in-one data center offering.

The Wall Street Journal reported the story this morning. Brocade officials couldn't immediately be reached for comment.

Dell has been a Brocade reseller for 10 years, in a partnership focused mostly on Fibre Channel gear for storage area networks (SANs). That deal is being extended to include the switches and routers originally designed by Foundry Networks, which Brocade acquired late last year. (See Brocade to Acquire Foundry and Brocade Takes Aim at Cisco (& Juniper).)

A source familiar with the agreement says it also includes Brocade's DCX Backbone line of switches.

All this gear will be sold under the Dell brand name. The proceeds will be split between Dell and Brocade, according to WSJ, although Light Reading's anonymous source notes that Brocade's sales won't likely be affected until very late in 2009.

In April, Brocade struck a similar deal with IBM, extending the companies' relationship to let Big Blue sell Brocade switches and routers under IBM-branded names. Just to make things more complicated, IBM signed an OEM agreement with Juniper Networks Inc. (NYSE: JNPR) as well. (See IBM to Resell Brocade/Foundry Gear and IBM, Juniper Become BFFs.)

By gathering up switches to go with their servers, Dell and IBM get extra ammunition against HP Inc. (NYSE: HPQ), which has its own lines of servers, switches, and storage-networking gear.

They're also arming up for battle against Cisco Systems Inc. (Nasdaq: CSCO), which in March announced the Unified Computing System (UCS), a data-center platform that includes Cisco-built servers and switches. (See Cisco Dreams of Data Center Unity.)

— Craig Matsumoto, West Coast Editor, Light Reading