IBM will begin selling ethernet and switching products from Brocade Communications Systems, seeking to diversify and compete against Cisco.
Brocade shares jumped 9.1% to $4.57. Brocade is benefiting from Cisco’s recent announcement to start selling computer servers.
Cisco’s weird move is seen as a direct challenge to H-P and IBM whom actually help sell Cisco routers and other networking equipment through partnerships. IBM & H-P may re-evaluate their partnerships in favor of Cisco’s smaller rivals like Broade and Juniper Networks.
IBM’s move make sense, although Cisco servers are of course not posing any real threat in the server market.
IBM already sells Brocade storage equipment but will bolster their relationship by selling switches & routers made by Foundry Networks which Brocade aquired last year.
The expanded partnership will help IBM offer its customers greater choice and alternatives to its current vendor partnership with Cisco.
Cisco has pretty much declared war on H-P and IBM and H-P and IBM want to come back and get into Cisco’s key markets and that the ethernet space which is a $20 billion market opportunity every year. Brocade will most likely gain share as a result of this rivalry.
IBM shares rose 2.6% to $101.43
