Brocade’s Network Subscription is a lease-style model for acquiring networking equipment. The problem, in Brocade’s point of view, is that the traditional IT purchasing pattern, whether via capital expenditure or leasing, is a stair-step approach of over-buying capacity to handle growth until demand overruns reduce productivity and IT purchases more capacity. More accurately, IT acquires equipment before it's needed, but in fixed increments. With Brocade’s Network Subscription, the capacity can be acquired earlier, but organizations only pay for what they use when they use it.
"Network subscription is a relatively new networking trend—percolating in a few other areas like WAN opt-- that is enabling vendors to align their business model with their customers' IT shops," said Forrester Research Senior Analyst Andre Kindness. "Because Brocade’s subscription lets businesses' infrastructure dynamically scale or contract with their customers' business cycles. The program is not about technology but the realities of what the business expects from their partners. This is a common trend outside of IT where products and services are billed by pay as you go."
The program involves Brocade working with the customer to design and ship a network that will meet current and future needs. Then, as the customer's demand grows, it can can turn on or off more ports. Overall, Brocade estimates a 15% to 20% premium when using Network Subscription compared with purchasing similar equipment. In an example using Brocade MLXe and VDX switches for a total of 832 10 Gbyte Ethernet ports and three years of Brocade’s Essential Support with next-day delivery, the purchase cost would be $1.4 million dollars, or $46.74 per port. Brocade’s Network Subscription for the same number of ports and Essential Support would be $1,687,495, or $56.34 per port.