Broadcom buying Dune Networks for cloud switching

If approved, the deal will add to Broadcom's lineup of chips for cloud-computing equipment

Broadcom has agreed to acquire Dune Networks, a privately held maker of high-speed switch fabrics, for about US$178 million, the companies announced Monday.

Dune was founded in 2000 and sells chipsets for high-capacity network equipment. Its SAND switch fabric can scale up from 10G bps (bits per second) to 100Tbps in total capacity and support individual ports with speeds up to 100-Gigabit Ethernet, according to the company's Web site.

It is designed as the heart of switches for data centers, enterprises LANs, and carrier core and edge routers and Carrier Ethernet platforms.

The acquisition, which is expected to close before the end of Broadcom's first quarter ending March 31, 2010, adds another piece to Broadcom's extensive communications chip arsenal.

By bolstering the company's lineup for data-center networking gear, it will help to meet growing demands for cloud computing infrastructure, Broadcom said.

Broadcom will pay mostly cash for Dune, which is based in Sunnyvale, California, and Yakum, Israel. The boards of both companies have approved the deal, but it is subject to customary closing conditions.

Dune's approximately 100 employees will be integrated into Broadcom's Network Switching Business Unit and the company's main research facility will remain in Israel, said Martin Lund, vice president and general manager of the unit.

Lund said current Dune CEO Eyal Dagan would report to him. Broadcom is based in Irvine, California, but also has facilities in Silicon Valley.

Broadcom acquired another switch fabric maker, Sandburst, in 2006. It plans to keep the XGS Core architecture that came from Sandburst, which is well-suited to metro Ethernet and carrier applications, while turning to Dune to meet the growing demand for switches in massive data centers, Lund said.

"The strategic importance of cloud computing, going forward, is so great that we want to make sure we have the best architecture for that," Lund said.

For companies building big data centers, Dune's acquisition by Broadcom could eventually mean less expensive network equipment, according to Linley Group analyst Jag Bolaria.

Dune is the world's largest third-party maker of switch fabrics, Bolaria said.

"It's probably the most scalable fabric in the market," he added. Whereas the XGS Core technology uses a centralized traffic scheduling mechanism, which can handle tens of terabits per second, Dune has a distributed scheduling system that can scale to hundreds of terabits per second, he said.

Most switch makers turn to third parties such as Dune for their fabrics, with Cisco Systems and Juniper Networks the main holdouts that still develop their own, Bolaria said.

Dune's products may turn more attractive to Cisco and Juniper if they come under the wing of Broadcom, which is much larger and more certain to be around to support major product lines for decades to come, he said.

Broadcom probably has its eye on product development groups within those switch giants as potential customers, Bolaria said.

The cost for those switch vendors to develop their own fabrics is immense, according to Bolaria.

"Broadcom is saying, 'We can give you scalability,'" he said. If Cisco and Juniper turn to a third party such as Broadcom and data-center switch fabrics became standardized, the cost of the equipment should go down, he said.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags switchesbroadcommergers & acquistions

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stephen Lawson

IDG News Service
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?