Survey: Bullish on Brocade

Problems? What problems? Respondents judge Brocade on technology, not turmoil

February 28, 2006

2 Min Read
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4:10 PM -- Public reaction to Brocade suggests technology trumps turmoil. And deep down, perhaps there's a suspicion of a strong correlation between bad accounting and good engineering.

So what if the SEC and DOJ are investigating the way Brocade handled employee stock options? And the CEO, CFO, and a couple of board members have left in the past 13 months? (See Brocade Eyes SEC Settlement, Another Brocade Exec Bolts, and Brocade Switches CEOs, Restates .)

None of that prevented Brocade from having better sales than expected last quarter. (See Brocade Reports Earnings.) And, according to our latest poll on switchmakers, Brocade is in the catbird's seat among the major Fibre Channel vendors. (See A New World for Switchmakers.) Heck, half our readers don't expect Cisco to be around for long, and most don't even see that as good news for McData.

Among the 178 who responded to our survey, 65 percent say Brocades legal problems would not prevent them from buying its products. Another 9 percent said they might hesitate, but only 23 percent said Brocade’s problems would scare them away from buying.

That sentiment could help Brocade if Cisco backs out of the storage market, which 49 percent said they expect, while another 21 percent were unsure. (See Cisco Distracted?.) If Cisco does pull out, 81 percent said Brocade will benefit the most, compared to only 11 percent for its main rival McData.More good news for Brocade: Users want neither vendor consolidation nor do they foresee new players in the space. Fifty-four percent said they would rather not see any mergers among Cisco, Brocade, or McData. And 70 percent say there is no room for new vendors, leaving the Fibre Channel switch market to a few contenders.

We'll have to watch McData's next moves, especially if its March 9 earnings report isn't impressive. With its flagship i10K director still awaiting qualification from EMC, and its 4-Gbit/s switches lagging behind Brocade, perhaps the only thing that could save McData now is some faulty accounting.

— Dave Raffo, Senior Editor, Byte and Switch

Organizations mentioned in this article:

  • Brocade Communications Systems Inc. (Nasdaq: BRCD)

  • Cisco Systems Inc. (Nasdaq: CSCO)

  • McData Corp. (Nasdaq: MCDTA)

  • Securities and Exchange Commission (SEC)

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