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Brocade Outlines Market Plans

In a presentation to industry analysts today, Brocade Communications Systems Inc. (Nasdaq: BRCD) outlined its market plans, denied deeper layoffs, and stuck to its financial guidance.

Brocade plans to mine new opportunities in multiprotocol routing, blade servers, and entry-level switches. According to Brocades figures, none of these new markets are as big as its current sweet spot – the midrange enterprise segment – but they represent far more growth potential.

Brocade’s VP of marketing Tom Buiocchi says the company estimates its total addressable market for multiprotocol routers to hit $350 million by 2006, making it about 20 percent of the overall Fibre Channel switch market. He places the blade server market for switches at $162 million by 2006, and the entry-level switch market at $111 million in the same timeframe.

Buiocchi says industry sources expect blades to make up from 25 percent to 35 percent of server sales by 2007. "Those blades have to attach to something, probably SANs."

Buiocchi says Brocade has about an 80 percent share of the entry-level SAN switch market now, a segment he admits isn't very large. However, the company’s goal is to maintain a major share as the segment grows. Brocade switches are shipped with recently announced low-end SAN systems from Dell Computer Corp. (Nasdaq: DELL), EMC Corp. (NYSE: EMC), and Hewlett-Packard Co. (NYSE: HPQ) (see EMC, Dell Get Small With SATA and HP Aims to Dazzle SMBs).

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