Storage wars from Barrons
The speeches were subdued at last week's Storage Networking World conference, in Palm Desert, Calif. Some of those speeches, in fact, were preannouncements of earnings disappointments, like that of McData. For the second time this quarter, the Broomfield, Colo., firm warned of a March quarter shortfall. Weak spending at data centers has pinched orders for McData's switches, which connect arrays of disk drives.
But McData's also feeling the effects of faster products introduced by rival Brocade. Brocade, of San Jose, Calif., has priced its SilkWorm 12000 switch at a bare premium to products like McData's, even though the Brocade switch runs at twice the speed.
On Friday, Piper Jaffray analyst Ashok Kumar reported evidence of the aggressiveness of storage network rivalries. A few large data centers tell Kumar that their Brocade SilkWorm 12000s arrived with warnings from Brocade against using the gadgets until Brocade announces the SilkWorm's "general availability." Kumar wonders if Brocade counted those shipments as revenue, and if not, where they will appear on Brocade's balance sheet.
I sought Brocade's comments, with no luck by deadline. Analyst Kumar told me he'll get the truth out of Brocade right around the time there's peace in the Middle East. |
