Brocade is making 16gig Fibre Channel hay while Cisco is still lagging up to two years behind, having made a wrong bet with FCoE.
Brocade's chief technology officer, Dave Stevens, presented at an investors' meeting attended by Aaron Rakers of Stifel Nicolaus, who reports that Stevens: "highlighted a faster-than-typical transition to 16Gbit/s FC (Fibre Channel) thus far, equating to approximately 18 per cent of the company’s total SAN switching revenue – driven primarily by the company’s director-class solutions."
Rakers said: "Our discussions supported our belief that the 8Gbit/s-to-16Gbps FC industry transition could be more meaningful than prior industry transitions given enhancements around application acceleration capabilities and integrated security features with 16Gbps FC."
Okay, this transition to 16 gig FC is a big deal. So where is Cisco, Brocade's main competitor? Rakers talks of "Cisco’s laggard positioning with regard to 16Gbit/s FC – up to 18 to 24 months behind Brocade."
Cisco has been pushing Fibre Channel over Ethernet (FCoE) more strongly than Brocade and this looks like a Chambers' mis-step, as FCoE is remaining a niche edge protocol, one not penetrating into the core of storage networks.
Rakers mentions: "Brocade’s view on FCoE as remaining predicated to deployments at the top-of-rack rather than making meaningful traction into the data centre core – we agree... [Brocade] does not expect an expansion beyond the top-of-rack market deployment given the performance/reliability attributes – noting that combined FCoE blade/module shipments of FCoE into the core network backbone have remained immaterial."
One factor limiting possible FCoE expansion is the fact that file-based storage remains a consistent player in the data centre:
Brocade views the current mix of enterprise deployments between SAN vs. NAS as remaining consistent – citing industry research showing mission critical deployments as reflective of a 70/30 mix between SAN/NAS; especially in the largest Fortune 1000 environments.
Brocade is doing well with its Ethernet VCS/VDX products: "The company currently has +325 cumulative VCS/VDX customers – expanding from the cited +200 customers exiting the January quarter and reflective of a strong ongoing ramp over the past few quarters (a trend we expect to continue toward the 800+ customer mark over the coming 3 to 4 quarters)."
Rakers said Brocade "sees Juniper QFabric offerings as focusing on high-end monolithic architectures, while Cisco’s solutions approach looks to conflict with the company’s traditional model (ie, collapsing the aggregation and application layers)."
All in all, Brocade is doing well with Ethernet and very well with 16Gbit/s FC, where it is effectively a monopoly supplier because of Cisco's misstep. ®