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Brocade Talks Up Tapestry: Page 2 of 4

The new software received at least as much attention as Brocade’s core switch business today. Brocade CEO Mike Klayko told the audience they can expect a new Tapestry product every quarter. Indeed, execs made it clear these products are just the beginning of the company's push into software, which they hope will make up 5 percent of revenue by the end of 2006.

Who can blame Brocade for looking for diversity? Or a diversion? Cisco Systems Inc. (Nasdaq: CSCO) and McData Corp. (Nasdaq: MCDTA) cut into Brocade’s market lead last quarter, and the Securities and Exchange Commission (SEC) and Antitrust Division of the U.S. Department of Justice are poking into its accounting practices. (See McData: 'We Gained Share', Cisco's Storage Climbs, and SEC Gets Formal With Brocade.)

There are many challenges in Brocade's strategy, starting with prospective customers. While the WAFS product is a storage play, the ARM appeals to server administrators as much as storage administrators. Brocade’s director of architecture and strategy systems, Max Riggsbee, says server and storage administration is intermingling more, especially as blade servers, which usually require external storage, play more of a role in the data center.

“Storage and server administrators have to work cooperatively, and that’s a little difficult today,” Riggsbee says. “There’s a question of who owns what.”

Brocade claims to be the first to allow administrators to provision servers from the SAN -- but it probably won't be the last. IDC analyst Rick Villars says to expect others to jump into this area. “We’re still in the early part of this market,” Villars says. “Tiered storage and blades require new ways for management and provisioning. A lot of vendors will focus on packages for this.”