Broadcom is stepping up its data center and cloud computing offerings by agreeing to acquire Dune Networks, which has developed a 100 Gbps scalable chipset that is capable of connecting more than 10,000 servers in a single deployment. Broadcom said the deal involves a payment of about $178 million for the Israeli company.

"Dune's massively scalable interconnect fabric, combined with our Ethernet products, augments our portfolio of solutions for data center networking equipment," said Broadcom's Martin Lund. "This technology is particularly well suited to meet the emerging requirements for cloud computing networks at a large scale."

Lund, who is VP and general manager of Broadcom's network switching business line, added that the Dune acquisition will help Broadcom in bringing new Ethernet applications to data centers. Broadcom has been building on its traditional Ethernet strength to broaden its position in data centers. Ever since the company failed in its effort to acquire a recalcitrant Emulex to beef up its data center offerings, Broadcom has been on the prowl for firms that can bolster its data center and cloud computing portfolio of products.

"Dune Networks' distributed connection fabric is a complement to Broadcom's existing product suite," said Eyal Dagan, Dune's CEO, in a statement. "Our joint customers will be able to bring to market low cost, high performance data center switching that will enable end users to build next-generation cloud computing networks."

A privately held company, Dune builds devices that facilitate application development of data center, enterprise, and carrier Ethernet solutions. Its products can scale in capacity, port rate, and service schemes, thereby extending the lifecycle of packet platforms of older legacy models.

Broadcom noted that data centers are scaling to high-bandwidth capacities demanded by cloud computing and the company plans to augment its services for that market through the Dune Networks acquisition. Broadcom said it expects to close the deal by the end of March 2010.