In a bid by two of the smaller players in the network equipment industry to improve their competitiveness, Brocade has agreed to acquire Foundry Networks for $3 billion.

Brocade specialises in data centre networking equipment, while Foundry’s expertise lies in Internet-based networking. The combined company will have a product range comparable to networking giant Cisco.

It will still be a far smaller company, however. Last year, Brocade earned revenues of $1.2 billion, while Foundry took just $607 million. Cisco, meanwhile, earned $34 billion in revenue during the year.

“We cannot provide assurance that we will be able to compete successfully against Cisco, currently the leading provider in the networking market,” Foundry Networks warned investors in its 2007 annual report.

Further reading

“Super switches are the future of corporate computing”
Cisco leads the way in introducing a new model for the corporate data centre

Cisco casts gloom on markets - again
Cautious outlook from network equipment maker fuels recession woes

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