Is Dell shopping for Brocade?

BANGALORE, INDIA: After a series of acquisitions in 2010, storage solutions provider Dell is now shopping for a networking equipment company, reads a blog post on Forbes. This makes sense especially since networking component is the one piece that is missing from Dell's lot of 'IT Stack', comprising of storage, servers and services, the report adds.

The report, based on Canaccord Genuity analyst Paul Mansky's research note, also adds that the company that is most likely to be Dell's acquisition target would be Brocade, for myriad of reasons.

Also Read: Acquisitions: The year that was for storage industry

"First is the absence of alternatives. Juniper Networks is 80 per cent service provider — not Dell’s business — and Extreme Networks and Force10 Networks carry insignificant share. Second, Brocade’s Fibre Channel business should be an attractive cash engine for at least five years,” notes Paul Mansky in the research note.

The analyst also lists out a few reasons he think why Dell needs a networking company, at this point of time. They are:

"The PC market is arguably headed into an accelerating secular decline (units and ASPs) at the hands of tablets — Dell’s cash engine. Dell has clearly been seeing success cross-selling Ethernet switching with servers and storage, evidenced by reported results and qualitative commentary from Dell executives."