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Ethernet equipment

Foundry's Next Move

1:45 PM -- Who'd have thought Foundry Networks could wind up in the hands of Oracle Corp. (Nasdaq: ORCL)?

Foundry's mother ship, Brocade Communications Systems Inc. (Nasdaq: BRCD), is scouting for a selloff, with likely candidates being HP Inc. (NYSE: HPQ) or Oracle, according to today's Wall Street Journal. The story says it's all talk right now, with no deal imminent.

In raw size, it would be a bigger deal than Cisco Systems Inc. (Nasdaq: CSCO) buying Tandberg ASA (OSE: TAA). (See Tandberg Deal Boosts Cisco's Video Plans.) Brocade's stock valuation was $3.2 billion; a 17 percent increase today brings that to $3.8 billion.

HP seems the more likely buyer (but made for a less interesting lead-in!). We keep hearing rumblings about how ProCurve is getting taken more seriously inside HP. More importantly, Brocade would beef up HP's data center story against the growing threat from its "partner," Cisco. (See Cisco Dreams of Data Center Unity and Cisco's Cloud Story.)

An Oracle deal could be fun to watch, though. As a followup to the pending Sun Microsystems Inc. acquisition, it would answer the question of whether Oracle wants to get that deeply into hardware.With Foundry and Brocade gear, Oracle would be offering nearly every aspect of a data center except disk drives and coffee cup holders.

— Craig Matsumoto, West Coast Editor, Light Reading

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