DanJones 11/4/2016 | 1:02:02 PM
Re: Will Ericsson Bid For Brocade' Routing Business? Could be, I'm hearing a few names as possible acquirers mostly around Ruckus though.
pdonegan67 11/4/2016 | 7:47:02 AM
Will Ericsson Bid For Brocade' Routing Business? With Cisco lobbying for Ericsson and others to lower their royalty rates for Standards Essential Patents will Ericsson bid for Brocade's routing business ?
inkstainedwretch 11/2/2016 | 2:08:55 PM
Re: Might as well, might as well. Oh, sure, and next you're going to be asking for a bigger dividend? Some people are never satisfied...


-- Brian Santo
DanJones 11/2/2016 | 1:50:14 PM
Re: Might as well, might as well. Sure, keep Avago and the shareholders happy in the short-term. But in the long-term do they even have, say, a 5G strategy now?
inkstainedwretch 11/2/2016 | 1:16:30 PM
Might as well, might as well. The bottom line on the Brocade deal is literally a bottom line calculation, according to Broadcom.

The Fiber Channel storage area networking (SAN) market is at best flat, and by most estimations is slowly shrinking, while Ethernet-based options and cloud storage grow.

Broadcom has been working at consolidating the FC SAN market for a short while. Last year, while still known as Avago, it bought Emulex, which also produced components for storage networking.

Brocade is pretty much the last major customer standing in FC SAN. It makes most of its money on FC SAN, with a run rate of about $1.4 billion on operating profit a year, according to Broadcom. At the rate the business is shrinking, Broadcom should certainly be able to make its money back, and perhaps even double its bet if the FC SAN market doesn't fall off a cliff any time soon. 

Furthermore, Broadcom thinks it can reduce Brocade's costs enough to increase the margins on Brocade's FC SAN products from about 40% to 45%.

-- Brian Santo

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