Feeds

Brocade drops the Ethernet ball

Record quarterly results, but...

Protecting against web application threats using SSL

Ethernet and storage networking supplier Brocade has dropped the Ethernet ball while recording record quarterly results.

For its first fiscal 2010 quarter ended January 30, revenues increased 25 per cent year-over-year to $539.5m and Brocade made a net profit of $51.1m, greatly up on the year-ago quarter's loss of $23.9m. All in all, good news, but Ethernet revenues soured the rosy picture.

The problem is Brocade's Ethernet revenues declined sequentially but its competitors did not. Cisco, HP/ProCurve, and Juniper (EX-series) all recorded better results over the same period.

Stifel analyst Aaron Rakers was blunt: "We are frustrated with Brocade's results, not just Government Ethernet switching, but also the clear market share losses in enterprise and persistent declines in service provider Ethernet switching, as well as what we consider a lack of definitive color with the company's strategic direction toward a recovery going forward."

Michael Klayko, Brocade's CEO, said the quarter "highlights the work ahead in building our Ethernet business to the levels we expect. Going forward, Brocade plans to re-energize our Ethernet business strategy, which targets opening hundreds of new direct enterprise Ethernet accounts each quarter."

The storage business was so-so. Brocade storage revenues of $350.68m were flat compared to the previous quarter but up from the year-ago quarter's $310.75m.

However, this growth was a percentage point or two below the overall storage market growth rate according to Rakers. Fibre Channel over Ethernet sales are not a big deal yet as the data centre class Ethernet isn't ready yet and iSCSI SANs are scooping all the Etherent storage business.

Brocade isn't making much if any headway with its host bus adapters (HBAs) against market leading incumbents Emulex and QLogic, and customers don't seem to be responding well to the improved quality of service claims Brocade makes concerning the pairing of its HBAs and Fibre Channel switches. Indeed, QLogic just won an OEM contract at HP for stackable edge switches.

So the storage side of Brocade's business is doing not great but OK, whereas Ethernet is not. Brocade, as much as anyone, says Ethernet is the future and here it is, dropping the Ethernet ball and falling behind its competitors.

The outlook for the full year is for revenues of $21.1bn - $2.2bn, a little lower than previous guidance of $2.25bn - $2.45bn. ®

Choosing a cloud hosting partner with confidence

More from The Register

next story
Wanna keep your data for 1,000 YEARS? No? Hard luck, HDS wants you to anyway
Combine Blu-ray and M-DISC and you get this monster
US boffins demo 'twisted radio' mux
OAM takes wireless signals to 32 Gbps
'Kim Kardashian snaps naked selfies with a BLACKBERRY'. *Twitterati gasps*
More alleged private, nude celeb pics appear online
Google+ GOING, GOING ... ? Newbie Gmailers no longer forced into mandatory ID slurp
Mountain View distances itself from lame 'network thingy'
Apple flops out 2FA for iCloud in bid to stop future nude selfie leaks
Millions of 4chan users howl with laughter as Cupertino slams stable door
Students playing with impressive racks? Yes, it's cluster comp time
The most comprehensive coverage the world has ever seen. Ever
Run little spreadsheet, run! IBM's Watson is coming to gobble you up
Big Blue's big super's big appetite for big data in big clouds for big analytics
Seagate's triple-headed Cerberus could SAVE the DISK WORLD
... and possibly bring us even more HAMR time. Yay!
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.