Bill, What do you think of this stock vis a vis EMC? (BRCD...I just bought some..)
Monday April 9 5:15 PM ET
Brocade Announces High-End Computer Storage Switch
SAN FRANCISCO (Reuters) - Brocade Communications Systems Inc. (NasdaqNM:BRCD - news) on Monday unveiled a high-end data switch for storage networks, pitting the company against a smaller rival and potential upstarts in the market for next-generation networking speed.
Storage networks are one of the fastest-growing classes of corporate technology spending and switches are the links that tie the systems together, so that a disk drive can talk to a tape backup system, for instance.
Brocade, which controls over 90 percent of the market for mid-range switches, said it would launch the new product, a high-end switch that can connect more devices and so sits at the center of a network, in the fourth quarter of this year.
``Partner qualification will start in the summer, and we think it will wrap up by calendar Q4,'' said Jay Kidd, vice-president of product marketing, in a Webcast.
Chief Executive Greg Reyes said it was unclear what systems makers would buy the new switch, but Compaq Computer Corp. (NYSE:CPQ - news), for one, had indicated interest.
The new SilkWorm 12000 switch will run at up to 2 gigabits per second, twice the speed of Brocade's current products, and will not be limited to the Fibre Channel protocol, unlike other Brocade offerings, the company said.
That high-end range is dominated by McData Corp. (NasdaqNM:MCDT - news) and its Director-class switches.
The early product announcement, up to nine months before the shipping, reflected the pressure on Brocade to expand its product line into the higher end of the market and to support a number of different communication protocols, said analyst Steve Duplessie of research firm Enterprise Storage Group.
``It's huge,'' Duplessie said. ``They (have been) getting murdered in the press and in public perception by being Fibre Channel bigots and not having a Director. Traditionally a company wouldn't be announcing nine months early, because a heck of a lot of things can go wrong.''
The Director class was 85 percent controlled by McData, which had just under $250 million in sales last year, but a number of venture capitalists were funding new ventures targeting that market niche, he said.
``Brocade just took the wind out of a lot of people's sails,'' he said.
Brocade sales were $165 million in the latest quarter, ending Jan. 27, and had been $329 million for the previous fiscal year.
Brocade shares now 25. The stock has lost 77 percent since the start of the year. |
