Brocade is already the top player by market share in the modular SAN switch market, ahead of second-place Cisco. Acquiring Foundry and its switching and routing technology gives Brocade a foothold in the enterprise LAN and service provider markets.
Following its McData acquisition, Brocade has garnered around 80 percent market share in the SAN switch market. “ Foundry acquisition will catapult us into the big league. We are talking about $20 billion addressable IP market as opposed to around $2 billion SAN connectivity market. Though the IP space is new for Brocade, our goal is to provide robust, cost-effective alternatives to Cisco in the switching and routing market for enterprises and service providers,” says Khalid Khalil, Brocade’s Sales Manager for MEA.
He says the two companies' technologies are complementary, he says. Foundry will bring Brocade an Ethernet portfolio for LANs, complementing its Fibre Channel SAN technology. But the purchase wasn't made to help Brocade tackle the emergence of Ethernet in storage networks. Brocade was already working toward that with “lossless Ethernet” technology that gives Ethernet the deterministic quality required in SANs, he adds. The company has already developed its own silicon for this emerging technology and put it in the DCX Backbone multiprotocol storage switch, which will support the future Fibre Channel over Ethernet (FCoE) standard, according to Khalil.
The company has not yet detailed how it will integrate Foundry’s ‘Iron’ switches and routers. It did say, however, that the buy would not result in downsizing at either Brocade or Foundry. “Though Foundry will cease to exist, we are not planning to change the product brand names after assimilation into our fold,” says Khalil.
It’s a smart move for Brocade who typically would compete with Cisco in the FCoE market. Cisco, who has dominated Ethernet forever, may face increasing pressure from storage networking buyers who are considering FCoE and the converged network. Hesitant to switch to Cisco, these buyers will now be able to rely on Brocade to supply their Fibre Channel/Ethernet needs.
Brocade, who dominates the Fibre Channel market, will now have an additional entry into FCoE with Foundry’s Ethernet switches and routers combined with its own Fibre Channel and storage-savvy products.
Khalil also discussed the future of Fibre Channel over Ethernet, an emerging technology that lets the Fibre Channel storage protocol take advantage of 10Gigabit Ethernet networks.
Brocade is ready to release FCoE products but doesn't believe there is enough demand, he says. The primary benefit of FCoE is the consolidation of cables and adapters, but that can also be achieved simply by using blade servers, Khalil says.
“There is a lot of hype around FCoE. What people don’t realise is that the technology doesn’t work on Ethernet as we know it today. What it requires is converged enhanced Ethernet, which is yet to be standardises. “I don't think [FCoE] is going to be big in 2009. I think we could see some adoption in the back half of 2010,” he adds. Brocade has publicly discussed its FCoE road map but is holding back on releasing a comprehensive product.
The more intriguing implications of the union will be to the rest of the Ethernet switching market. Cisco's 70%-plus market share dwarfs that of other players — Nortel, HP ProCurve, Force10 Networks, Extreme Networks, Enterasys Networks and new entrant Juniper, among them. This deal leaves them further behind, observers note.
And though Foundry was one of the Ethernet switching companies fighting an uphill battle against Cisco for market share, Brocade picked the best of the lot, according to industry analysts. A bonus for Brocade, they say, is the technology depth for future product innovation and Foundry's presence, albeit tiny, in service provider routing.
Also, Brocade is better able than Cisco to cooperate with key system vendors such as IBM, HP and EMC because of its deep, longtime relationships with those companies. Interoperability with other vendors' products will be critical as enterprises ease into transformations of their data centers. We already have an OEM agreement with IBM and are talking to other system vendors. Recent moves by Cisco, including its rumoured fray into the blade server market, make it look more like a competitor of the system vendors, he said. Cisco has been pushing to put more of the intelligence of data centers in the network infrastructure. “We say it’s all about day while Cisco reckons its all about the network.”