What a Broadcom-Qualcomm merger could mean for the enterprise

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The proposed acquisition of Qualcomm by rival Broadcom for $130 billion may not just be a way to own the 5G wireless market — it could also create a formidable player in the enterprise networking space to ensure mobile applications meet performance expectations.

Broadcom on Monday confirmed early reports from Reuters and others that it would seek to merge with Qualcomm, its longtime competitor in the semiconductor market. Through still in the process of acquiring Brocade — and despite Qualcomm’s lengthy court battle with Apple — Broadcom’s executive team said the deal would bring together a highly complementary portfolio of products.

“As a result of enhanced scale, reach and financial flexibility, the combined company will benefit from the ability to accelerate innovation and deliver more advanced semiconductor solutions to its broad global customer base,” Broadcom said in a statement.

Broadcom is best known for manufacturing chips behind WiFi and GPS applications, among other things. As an article on The Verge pointed out, its products are available in devices from Apple, HTC and Google, among others. Qualcomm, on the other hand, has an arguably higher profile thanks to its Snapdragon line of modem chips –sometimes called system on a chip (SOC) — that connect to 5G and longterm evolution (LTE) wireless networks.

Beyond technologies that power consumer smartphones, however, Broadcom also has a long track record in networking switches and chips that run in some of the world’s largest data centres. (Disclosure: I provided content marketing services to Broadcom starting in 2014, but haven’t worked with them in the past year). These include its Trident chips, which were updated as recently as this past summer, its Tomahawk switches, and analytics tools based on open source technologies such as BroadView.

These tools essentially help those running networks that handle high compute workloads — think of firms like Facebook and its large social networking service — monitor for any potential latency problems as traffic moves across servers and to provide visibility into multiple switches at the same time. Sometimes, congestion of data traffic in these networks causes packets of data to drop, which means applications don’t run properly. As more workloads move to the public cloud, meanwhile, this kind of traffic management becomes more complicated. Broadcom’s networking products allow data centre operators to prioritize certain kinds of traffic to make sure that doesn’t happen.

Qualcomm, meanwhile, had recently begun to put more emphasis on its own data centre strategy. In August, for instance, the firm launched a processor core called Falkor aimed at data centres that was designed for cloud-based, multi-tenant workloads. Falkor was scheduled to ship later this year.

For now, many traditional enterprises may not be running data centres that require some of Broadcom’s high-end capabilities, but that could change quickly as IT infrastructure continues to be commoditized. Qualcomm, which has been exploring how its chips could fit into everything from tablets to self-driving cars, could bring Broadcom closer to the innovative applications that get the interest of CMOs and even sales executives. If Broadcom can consolidate its position in the data centre space, however, it will bring CIOs greater assurance that those applications will come with the right quality of service running behind them.

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Shane Schick

Shane Schick

Shane Schick is the Editor-in-Chief of B2B News Network. He is the former Editor-in-Chief of Marketing magazine and has also been Vice-President, Content & Community (Editor-in-Chief), at IT World Canada, a technology columnist with the Globe and Mail and was the founding editor of ITBusiness.ca. Shane has been recognized for journalistic excellence by the Canadian Advanced Technology Alliance and the Canadian Online Publishing Awards.