Fang Li
I will remind you that Sun is STILL the largest FC shipper in the world. they lack fabric login (therefore switches). but I wouldn't bet against them in this business, smart guys running it and an installed base that is easily converted. they ship terabytes a week.....
As to the returns issue at Brocade. Are you reading the same S-1 I am? They have an allowance of $100,000 in 1998 sales of $24M. That's about 8-12 switches expected to be returned. And only 280K in Q1FY99. Doesn't sound high to me. (I am looking at SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS)
Roy Sardina
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Louie,
If Ancor can only get 30%-50% of the FC switch market, Brocade will have bigger or the same potential as Ancor. The question is how big is the switch market. Last year was bad for entire FC industry, Ancor went down to $1, Qlgc went down to $25, Emulex went down to $6, and look where they are now. Things are getting better and hope it will be great. Right now, EMC, HDS are the only hope I can see to push FC in 99, IBM is a lesser force because it has SSA to sell, and SUN has not made a move in last two years and were trying to slow things down. Ancor to go with EMC is the right move. In general, EMC, HDS, and IBM will be the major pushing force in 99. EMC has seen its FC business grow from $100M in 97 to $800M in 98, all these FC installation will be the market for switch upgrade in the future.
From Brocade's S-1, I can sense that Brocade has been had similar problems that Ancor had, a lots of returned stuff to charge. |
