Tag: Vyatta

Brocade adds virtual routing capabilities with Vyatta buy

Ben Kolada

Contact: Ben Kolada

To add virtual networking to its storage portfolio, Brocade announced on Monday the all-cash acquisition of software-based virtual routing vendor Vyatta. The deal announcement reads as a tech and talent tuck-in, though it does also provide access to several Vyatta customers that are already implementing virtual networking.

Vyatta provides network routing, load balancing, address management, quality assurance, monitoring, administration and debugging software and hardware for businesses globally. Its software is used to manage both physical and virtual networks. The company started out with a virtual networking product with not only open APIs, but also open source software (Vyatta means ‘open’ in Sanskrit).

Brocade explained that the rationale for the deal was to complement its R&D investments in Ethernet fabrics and software-defined networking. But the enterprise networking and storage provider could also use Vyatta’s foothold in the virtual world to anchor its next steps. With the Vyatta buy, Brocade gains access to a set of customers that are already well along in their virtual networking implementations.

For more real-time information on tech M&A, follow us on Twitter @MAKnowledgebase.

Cloud deals arising from the fog

Ben Kolada

Contact: Ben Kolada

Going into the last day of the 9th Cloud Computing Expo, held in Santa Clara, California, we get the feeling that conference attendees will see an M&A shakeout within the next few years. To a degree, this dealmaking has already begun, with a small handful of exhibitors already having been scooped up, including a couple of firms that were acquired just last month. Meanwhile, the remaining vendors, most of whom are young startups, are scrapping to define and prove themselves for what they hope will someday be their own fruitful exits.

The cloud computing market is real and growing. My 451 Market Monitor colleagues, who have the tedious task of sizing the cloud market, estimate global cloud revenue (excluding SaaS) at $9.8 billion for 2011, with nearly 40% revenue growth expected in 2012. Many players in this sector have already taken note of its potential and acquirers’ interest, resulting in an increase in both deal sizes and deal volume for cloud vendors. According to The 451 M&A KnowledgeBase, so far this year a record 465 transactions claimed some aspect of cloud. That’s nearly double what we saw in the same period last year. (To be honest, many of these acquired companies are about as cloudy as snake oil, but there are real cloud deals being done. Platform Computing and Gluster, which both announced their sales last month, sold for an estimated combined deal value just shy of $450m.)

However, in terms of revenue, most of the cloud startups we spoke with haven’t yet really proven themselves commercially. But as these firms transition their focus from product development to marketing and sales, their growth will attract more and more suitors. And double-digit revenue isn’t exactly a requirement for a successful exit, as both the recent CloudSwitch and Cloud.com takeouts proved. Though we understand that none of these companies are looking to sell just yet, we wouldn’t be surprised if cloud-enablement providers such as OnApp, Abiquo and Nimbula are picked off one by one within the next few years. And we were reminded yet again that open source networking and routing vendor Vyatta could someday see a real offer from Dell, though the IT giant would likely face a competing bid from Cisco.