Brocade Talks Up Tapestry

NEW YORK -- After buying nearly $17 million in software technology last month, Brocade Communications Systems Inc. (Nasdaq: BRCD) is working hard to sell the concept to potential customers.

It won't be easy. The company was walking a tightrope at the New York stop of its Brocade Conference user roadshow today, where execs talked up the new Tapestry software platform, while highlighting a switch roadmap that includes 4-Gbit/s gear. The goal was to convince customers of the value of new software and services, while not downplaying Brocade's commitment to Fibre Channel switches (see Brocade Busts an IT Move).

Eighteen months ago we decided we had to diversify the company,” marketing VP Tom Buiocchi said of the Tapestry platform. “This is a decidedly different product from Brocade. For the first time at this conference, we’re going to expand our discussions to products that are not switch based.”

Brocade last month announced the first two pieces of its Tapestry platform: Application Resource Manager (ARM) for provisioning servers and Wide Area File Services (WAFS) for improving delivery of data to remote sites.

The ARM product is the result of stealth development Brocade carried out with Therion Software, which it funded and then acquired in May for approximately $9.3 million. The WAFS came from an OEM deal with Tacit Networks Inc. that included a $7.5 million investment in the startup (see Brocade Invests in Tacit).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.”Brocade must tweak its channel programs to accommodate Tapestry. OEMs like Dell Inc. (Nasdaq: DELL), Hewlett-Packard Co. (NYSE: HPQ), and IBM Corp. (NYSE: IBM) will likely be good channels, because they sell both servers and storage. Others, such as EMC Corp. (NYSE: EMC) and Hitachi Data Systems (HDS), don’t appear to be natural fits for Tapestry because they don’t sell servers.

Riggsbee says no OEM deals have been struck yet for ARM, although Brocade is talking with all the major server vendors. “Before putting it in their hands, we wanted to put it in trial production with several key customers,” he says.

No OEM deals have been announced for the WAFS product either, although Buiocchi says Brocade is selling it today and expects to have OEM and VAR deals by the fall.

There was talk of Brocade’s switch roadmap today, but it related to previous announcements. Brocade plans a 256-port, 4-Gbit/s director, a 4-Gbit/s blade server switch, and a second-generation multiprotocol router with improved FCIP performance.

— Dave Raffo, Senior Editor, Byte and Switch0