(UPDATED: Analyst comments added July 21, 2011).

July 20, 2011 – Dell revealed plans today to acquire Force10 Networks, Inc. in a definitive agreement. Force10 provides data center, service provider and enterprise networking globally. 

Founded in 1999 and headquartered in San Jose, Calif., with research and development operations based in Silicon Valley, Force10 Networks is nearly a $200-million company with approximately 80 percent of its business in North America. Force10's Open Cloud Networking is based on open standards, automation and virtualization.

Force10's approach to flexibility, performance, scale and automation aligns with Dell’s own data center networking goals, as quoted in the news release. According to the informational investor webcast today, Force10 adds to Dell’s existing enterprise portfolio to offer customers a complete range of data center products. Dell and Force10 have had a partnership for more than six years. The have provided data center customers with open networking solutions.

According to the news announcement and conference call, Dell is committed to maintaining and growing Force10's channel program. Force10's customers include leading Web 2.0 and Fortune 100 companies, Internet portals, global carriers, leading research laboratories and government organizations with demanding network environments.

“Combining Dell's global scale, reach and enterprise portfolio with our innovation in high-performance networking provides our customers the best end-to-end solution for today's and tomorrow's data centers," Henry Wasik, chief executive officer, Force10 Networks said in the announcement.

Dell's acquisition is significant because private clouds and future data centers will need massive scale in the future. "Policy management is becoming a huge nightmare, and mobility is key," says R "Ray" Wang, principal analyst and CEO, Constellation Research.

"The acquisition puts Dell in a position to address these enterprise class issues for its core customers," says Wang. "It also acquires key technologies for itself to use in its long-term cloud strategy."

The transaction was approved by the board of directors of each company. Additional terms of the transaction were not disclosed. The transaction is expected to close in late summer.

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