Report: Cisco SANs Grew 18%

A market research report has lifted some -- but not all -- of the guesswork behind Cisco Systems Inc.'s (Nasdaq: CSCO) Fibre Channel SAN revenues from last quarter.

Ciscos SAN switch revenue increased 18 percent during the first calendar quarter of this year, while the total market declined, according to recent information from Dell'Oro Group. Cisco’s revenues grew from $31 million in the fourth quarter of 2003 to $36.7 million in the first quarter of 2004.

That 18 percent growth doesn’t directly correlate with Cisco’s fiscal quarter, though. Cisco’s quarter ran from February through April, while Dell’Oro tracked January through March. Dell’Oro Group founder Tam Dell’Oro says there are signs that Cisco had a strong January, which was part of the quarter Cisco announced in February. Back then, Cisco announced a substantial sequential increase in storage revenues (see Cisco Storage Growing Up).

“Back in October, Cisco said they had manufacturing problems that prevented them from shipping,” Dell’Oro says. “It appears December and January were real strong because a lot of their shipments folded into those months." (See Cisco Still a Kid in Storage.)

So we still don’t know exactly how much revenue Cisco gained from storage in the last quarter because Cisco didn’t break out those numbers (see Cisco Call Puts SANs in Storage). That left analysts and industry insiders split on whether the numbers were embarrassingly low or in the same ballpark as the previous quarter (see The Cisco Guessing Game).“We didn’t announce them because we have a lot of market segments to go through,” Cisco spokesman John Noh says. “We had nothing to hide.”

Although still far behind its main competitors, Cisco at least deserves credit for making strides, while the SAN switch market declined overall from the previous calendar quarter.

According to Dell’Oro, McData Corp. (Nasdaq: MCDTA) took the biggest hit, dropping seven percent from $99.7 million to $93 million, not a surprise given the company's latest earnings report (see McData Sees Another Quarter Pounding). Brocade Communications Systems Inc. (Nasdaq: BRCD) inched from $142.6 million to $145.4 million, also not surprising (see Brocade Hits Estimates, Lays Off 110). Those numbers were close to what the companies announced.

The HBA market also took a hit in the first quarter, according to Dell'Oro. Emulex Corp.'s (NYSE: ELX) revenue of $83.6 million was down from $88.4 million, while QLogic Corp.'s (Nasdaq: QLGC) dropped to $67.3 million from $75.2 million (see Emulex Short on Revenue and QLogic Reports Earnings). AMC Corp.'s HBA revenue grew about $800,000 to around $6 million to place a distant third (see AMCC Q4 Reaches Breakeven).

Table 1: FC SAN Switch Revenues

Table 2: HBA Revenues

— Dave Raffo, Senior Editor, Byte and Switch