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Brocade/Foundry "resonating" as Cisco alternative: CTO

Following a solid fourth quarter in which sales rose 31%, Brocade says the integration of its Foundry Networks purchase is complete. Penetration of its Foundry-based Ethernet/IP portfolio into data center accounts doubled in the quarter, which means Brocade's position as an alternative to Cisco is “resonating with people,” says CTO Dave Stevens.

Revenue from OEMs IBM and Dell is taking a while to ramp up though, Stevens said. Product certification is taking time but Brocade expects to see progress early in 2010, yet Stevens acknowledge that ramping those arrangements will be one of the challenges Brocade faces in the current quarter and into next year.

As for HP, Stevens doesn't expect much to change on the storage side with the 3Com acquisition. HP OEMs Brocade FibreChannel and FibreChannel-over-Ethernet (FCoE) switches and adapters, and Stevens expects that to continue.

But for Ethernet, Brocade may have lost HP as a potential OEM partner for the Foundry switches, or acquirer of the company overall. Stevens expects continued competition with HP at the SMB and mid-tier levels.

Brocade reportedly put itself up for sale last month, with HP believed to be a leading candidate to acquire the company. Brocade denied that it was for sale.

Along with co-opetition with HP, other challenges going into 2010 will be exceution, Stephens says, especially in new product rollouts. Brocade released 62 new products in 2009 and Stevens expects that to not slow down.

“Doing that, and getting the channels up and ramping are the two keys” to fiscal and calendar 2010, he says.

FCoE? Not so much. That's more of a 2011 phenomenon in terms of market ramp, Stevens says. Customers are only trialing Brocade's FCoE blade for its FC SAN director switch and 8000 top-of-rack FCoE switch, he says.

Brocade has to manage the migration from FibreChannel to FCoE delicately — its share of the FibreChannel switching market is between 65% and 72%, analysts estimate. Cisco, meanwhile, says it has at least 315 customers for FCoE on its Nexus 5000 switch.

But for Brocade, FCoE product development and introduction will continue unabated in 2010 with new gear likely to emerge in the back end of the year, Stevens says. Key to the ramp of FCoE is completion of the IEEE Converged Enhanced Ethernet (CEE) standards, particularly around congestion notification, he says.

Those standards are expected to be finalized in mid- to late-2010, Stevens says.

“Until you get that done, you can't implement a multihop CEE network,” he says. “You can't build a real large network out of it. What you're really building is top-of-rack I/O consolidation.”

There is a lot of customer interest however in FCoE, a migration path from FibreChannel, and CEE blades for Brocade's Ethernet and DCX SAN switches. Interest has ramped up over the past couple of quarters but deployment is still very limited, Stevens says.

Once deployment ramps, Brocade will address it not only with FCoE extensions to existing products, but with a new line of CEE switches that meld the routing capabilities of the NetIron MLX with the FibreChannel and storage connectivity functionality of the company's SAN switches.

“It shows up as native CEE interfaces that we plug into MLX and DCX,” Stevens says. “In the back half of next year you'll see us release some new products that straddle those worlds.”

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