Broadcom Buys Dune Networks to Broaden Data Center, Cloud Computing Portfolio

Semiconductor manufacturer Broadcom has acquired Dune Networks in its effort to make some serious inroads in the data center and cloud computing space. Here’s a look at the deal, and the implications for VARs.

Broadcom is shelling out $178 million in cash for Dune, which develops switch fabric solutions for data center networking equipment, in a mostly cash deal. The companies expect the deal to close by March 31, 2010 – the end of Broadcom’s first quarter.

In acquiring Dune Networks, Broadcom gains a plethora of technology including a scalable chipset that supports bandwidth speeds of up to 100Gbps per port and can connect more than 10,000 ports in a single deployment, according to the companies.

The acquisition is a milestone of sorts as Broadcom looks to move beyond its portfolio of Ethernet products and into a larger pool of networking products to be a real player in the data center and cloud computing spaces. Data centers are a natural step forward for a company like Broadcom. And in theory, the acquisition positions the company perfectly as more data centers expand to meet the bandwidth requirements of cloud computing.

Although the majority of companies are sluggish to move to the cloud, research firm Gartner believes cloud computing will grow to revenues of $14 billion by 2013.

Follow The VAR Guy via RSS; Facebook; Identi.ca; Twitter; and via his Newsletter; Webcasts and Resource Center. Plus, check out more channel voices at www.vartweet.com.