Feeds

Brocade drops the Ethernet ball

Record quarterly results, but...

Top 5 reasons to deploy VMware with Tegile

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. ®

Intelligent flash storage arrays

More from The Register

next story
Azure TITSUP caused by INFINITE LOOP
Fat fingered geo-block kept Aussies in the dark
NASA launches new climate model at SC14
75 days of supercomputing later ...
Yahoo! blames! MONSTER! email! OUTAGE! on! CUT! CABLE! bungle!
Weekend woe for BT as telco struggles to restore service
Cloud unicorns are extinct so DiData cloud mess was YOUR fault
Applications need to be built to handle TITSUP incidents
NSA SOURCE CODE LEAK: Information slurp tools to appear online
Now you can run your own intelligence agency
BOFH: WHERE did this 'fax-enabled' printer UPGRADE come from?
Don't worry about that cable, it's part of the config
Stop the IoT revolution! We need to figure out packet sizes first
Researchers test 802.15.4 and find we know nuh-think! about large scale sensor network ops
DEATH by COMMENTS: WordPress XSS vuln is BIGGEST for YEARS
Trio of XSS turns attackers into admins
SanDisk vows: We'll have a 16TB SSD WHOPPER by 2016
Flash WORM has a serious use for archived photos and videos
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Driving business with continuous operational intelligence
Introducing an innovative approach offered by ExtraHop for producing continuous operational intelligence.
10 threats to successful enterprise endpoint backup
10 threats to a successful backup including issues with BYOD, slow backups and ineffective security.
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?