Brocade to acquire Foundry Networks for $3B

Brocade Communications Systems Inc. says it is paying $3 billion in cash and stock to acquire Foundry Networks Inc., a deal designed to challenge industry behemoth Cisco Systems Inc.

The melding of Brocade and Foundry would bring together two companies with presence deep in the data center and signals the growing importance of the equipment used to shuttle data and Internet traffic.

San Jose-based Brocade makes switches used to connect servers to data storage machines, an area where it dominates Cisco.

Santa Clara-based Foundry Networks makes routers and switches used to direct Internet traffic. Cisco has long dominated that market.