Dell Inc. (DELL) announced today that it will acquire Force 10 Networks, a buy that backs up analyst speculation that the second-largest computer maker in the world would absorb a networking vendor to provide the company a combined networking and data center offering to rival competitors such as Cisco (CSCO) or HP (HPQ).
Specific financials were not revealed. Round Rock, Texas-based Dell said it plans the acquisition to complete late this summer and that its new move is a “natural complement to Dell’s server strength.”
“Dell’s approach of offering customers open, capable and affordable solutions aligns with Force 10’s approach to offering customers new levels of flexibility, performance, scale and automation which is fundamental to changing the economics of data center networking,” said Brad Anderson, senior VP of Dell’s Enterprise Solutions Group.
CEO Michael Dell
As of late, Dell has been acquiring companies around the globe, placing most emphasis on storage companies such as Compellent. Analysts predicted that Dell would acquire Brocade to complete a fully integrated network and data centric service. Dell’s decision to buy San Jose, Calif.-based Force 10 sent Brocade’s stock in a downward trajectory this morning.
Analyst appear mostly positive regarding the deal. Arron Rakers and Matthew Nahorski, analysts at Stifel Nicolaus, said the acquisition was a “positive/clean move” for Dell to dive into networking, where Dell’s product portfolio has mostly consisted of OEM partnerships with Juniper, Brocade and Aruba.
“While this move comes earlier than we would have expected (thought that Dell was just starting to make moves to focus succinctly on a stand-alone networking strategy over the past six months), we view this as a positive/clean move into the networking market (vs. an acquisition of a Brocade) – clearly focused on competing against Cisco’s UCS (our checks very positive here), HP’s Converged Infrastructure strategy (BladeSystem Matrix; ProCurve, 3Com, and Virtual Connect/Flex-10), and IBM (IBM)’s acquisition of Blade Network Technologies,” the analysts wrote in a statement.
Force 10 was founded as Turin Networks in 1999 and had around $200 million in revenue for 2010. Two months ago, Force 10 decided to alter its IPO plan it had announced in March of last year, planning to sell $100 million in stock sale instead of the first stated $144 million. Dell said it plans to keep Force 10’s research and development center located in Chennai, India.
