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Struggling Brocade eyes an extreme makeover
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January 31, 2006 (Computerworld) -- Dealing with revenue losses and the resignations of its CEO and chief financial officer in the past year, Fibre Channel switch maker Brocade Communications Systems Inc. said it's determined to shift its business model from an all-hardware product line and general support vendor to a company offering a greater mix of software and services.
San Jose-based Brocade claims that more than 2 million servers are attached to its storage switches, which direct data traffic on more than 100,000 storage-area networks (SAN). By adding software and services, it would be following in the footsteps of leading storage vendors such as EMC Corp. and Network Appliance Inc.
Last week, Tom Buiocchi, Brocade's vice president of worldwide marketing, and Dan Crain, its chief technology officer, sat down with Computerworld to discuss the company's technology and marketing road map, as well as to address a recent exodus of executive staff.
Crain said the company wants to increase revenue from its software and services sales from 1% today to 10% over the next couple of years. Without offering specifics, Buiocchi and Crain said some of the new storage management software will be developed internally; the rest will come from partnerships, and much of it will likely be used on Brocade's Tapestry "intelligent""switch platform. The products will be unveiled over the next year, Buiocchi said.
Some users weren't fired up about the company's planned shift to more software and services.
Scott Saunders, director of MIS at Paxson Communications Corp. in West Palm Beach, Fla., has been a Brocade customer for six years and currently owns eight Brocade Silkworm switches that connect a SAN made up of EMC and Dell Inc. storage subsystems. Saunders said he's been largely oblivious to Brocade's internal problems because his SAN is serviced by EMC and Dell. But he's not interested in purchasing software or services from a switch vendor.
"From a switch maker? That's not usually the channel you go to for that kind of stuff," Saunders said. "That is the trend, though, because software and services is where the bucks are and hardware is such a commodity, even though their switches are still kind of pricey."
Rick Curry, vice president of infrastructure engineering at Union Bank of California NA in San Francisco, said in e-mail comments that he wouldn't likely purchase storage management software from Brocade. "I'd rather align with a storage management solution that is more vendor-neutral. What I would find appealing is software running in the fabric that could offload more costly server or storage processor cycles,""he said. "That said, the licensing strategy of these products, as well as the technical maturity/functionality, would also have to be competitive."
Greg Schulz, an analyst at research firm StorageIO in Stillwater Minn., said Brocade's Tapestry is more of an umbrella for several technologies or a "marketing name like HDS TagmaStore, HP StorageWorks, IBM TotalStorage, Sun StorageTek and so forth.
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