A summer of industry consolidation

So much for business slowing down in the summer. Brocade, McAfee, and others are forking over cash in an effort to scale up.

Jon Oltsik
Jon Oltsik is a senior analyst at the Enterprise Strategy Group. He is not an employee of CNET.
Jon Oltsik
2 min read

I thought business was supposed to slow down in the summer. I guess not. First Brocade Communications Systems buys Foundry Networks. Then last week, Siemens sold off 51 percent of its Siemens Enterprise Communications (SEN) division to the Gores Group, which will combine this entity with Enterasys Networks. McAfee then closed last week with its acquisition of Reconnex.

The combination of SEN and Enterasys was clearly a push for scale. Enterasys is actually one of the best-kept secrets in enterprise networking, with a full line of switching, routing, and security products. Combined with Siemens voice and unified communications products, this new entity may be positioned to compete with Cisco Systems on the new "triple play" networking front (i.e. voice, video, and data). A tough road for sure, but it seems clear that scale matters in networking and the combined entity now boasts global operations and multibillion dollars in revenue.

As for the other deal, McAfee gets a data loss prevention technology leader at the network to complement its existing endpoint offering based upon its Onigma purchase in 2006. While Reconnex doesn't have the market swagger of Vontu, McAfee paid $46 million while Symantec forked over $350 million for Vontu. With Reconnex, Onigma, and SafeBoot in tow, McAfee has a trifecta to approach the data privacy/security market.

Hmm, all this activity and it's only the beginning of August. There's bound to be a lot more activity before the leaves start falling from the trees.

Jon Oltsik is a senior analyst at the Enterprise Strategy Group.