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Brocade buys Rhapsody, braves OEM wrath

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ComputerWire: IT Industry Intelligence

Brocade Communications Systems Inc has decided that it is better to arm itself for the forthcoming battle with Cisco Systems Inc than to worry about making its OEM partners unhappy, and has spent around $175m in a share-swap acquisition of smart-switch start-up Rhapsody Networks Inc,

Tim Stammers writes

.

Unlike the SAN switches currently sold by Brocade, the devices being developed by Rhapsody are part of a new breed of switch which can act as a platform for storage management applications. Rhapsody has already signed deals which will see its hardware run applications such as Veritas Software Corp's Volume Manager, and virtualization software from both StoreAge Networking Technologies Ltd and FalconStor Software Inc.

The move will bring Brocade into even more intense competition with Cisco next year, when the networking giant enters the storage networking market in earnest by shipping the first of a new range of Fibre Channel and iSCSI switches. Cisco's marketing muscle and reputation will make it a very serious competitor in the storage networking market.

With even high-end storage hardware being commoditized, disk array makers are stepping up their software efforts in order to shore up eroding profit margins. A move by customers towards smart network devices would reduce customers' reliance on that software which array makers supply to run on their hardware. Although Brocade is preparing to sell its products directly, a huge proportion of its current revenue comes via re-badged devices sold by array makers such as EMC Corp.

Brocade executives made several well-rehearsed references to this issue during the conference call held yesterday to announce the purchase of Rhapsody. "We wouldn't have proceeded with this plan unless we had received very positive encouragement from our OEM partners," said Greg Reyes, Brocade CEO. Cisco's first real assault on the storage network market which will begin this quarter and gather pace next year will also involve intelligent switches that will threaten array-makers software revenues. "That's why Brocade had to take this step, because OEM makers are looking for a trusted partner," Reyes said. He did not explain why OEMs should trust Brocade but not Cisco, but he labored the point. "We're committed to being the trusted OEM provider of fabric application platforms," he also said during the call.

Cisco's forthcoming mid-range and high-end SAN switches will be the first from the supplier that will be able to be configured purely as Fibre Channel devices, and unlike its current iSCSI to Fibre Channel bridges, will be able to sport very large numbers of ports. Among the first applications which will be hosted by these devices will almost certainly be Veritas' Volume Manager. Cisco was named as one of the first members of the program Veritas announced last year to see its software ported to smart switches and other devices.

Rhapsody was founded in 2000, and has around 110 employees. It will be operated as a separate unit of Brocade until it has completed "Mission One" - the shipping of its first product, prototypes of which have been delivered to OEMs. Brocade estimated that the first applications based on these platforms will be available from OEMs by the end of next year.

Rhapsody's technology is based on a different ASIC to that used by Brocade. Brocade - of course - insisted that this will represent no integration problems for itself or for its customers, and said that the API to Rhapsody's product will remain unchanged.

© Computerwire

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