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Brocade upgrades fabric switches, preps new FAN software

After seeing revenues from its fabric switch and fledgling FAN lines slip last quarter, Brocade is preparing to ship 8 Gbit switches and new file management software products.

Brocade Communications Systems Inc. is getting ready to upgrade its switches and roll out new file area network (FAN) software products in an attempt to revive sagging business in those two areas.

While reporting strong sales in SAN directors and blade server switches last quarter, Brocade last night said in an earnings call that revenues from its fabric switch and fledgling FAN product lines slipped from the previous quarter.

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After the call, Brocade marketing vice president Tom Buiocchi told that a switch upgrade to 8 Gbit is in the works. In January, Brocade released an 8 Gbit DCX Backbone director and added 8 Gbit line cards for its 48000 directors. The smaller switches don't use line cards and require a new chassis to upgrade from 4 Gbit to 8 Gbit.

Buiocchi did not give much detail on the new switches, but industry sources said Brocade will have new 40-port and 80-port switches ready around May or June.

"Typically, once we launch new technology, we iterate new products quickly," Buiocchi said. "So you can imagine we'll follow the DCX with 8 Gbit switch products soon. We'll roll that out throughout the product family."

FAN needs more juice

On the FAN front, Buiocchi said the StorageX file virtualization product that Brocade acquired by buying startup NuView Inc. in 2006 is selling well, but otherwise the file area network software products are disappointing. Its other FAN products are in the areas of data classification and reporting, WAN optimization, file movement and file management. Most of its FAN products come from its acquisitions and partnerships over the past few years.

"We need more products in that category for sure," Buiocchi said. "We have new products in development, and we're changing the organization around our FAN business."

The new products are expected to include more automated policy-based management. Brocade executives said they hope to stir interest in FAN software new products, recently announced reseller deals with IBM and Hitachi Data Systems and a restructuring of the FAN business unit with dedicated engineering and sales.

During the earnings call, CEO Mike Klayko said Brocade would launch new FAN products within a month. "Improving our performance in our files or FAN business is very important for us in 2008," he said. He said sales of FAN products account for less than 5% of Brocade's revenue.

Brocade executives also said HDS and Fujitsu Siemens in Europe have agreed to sell its new host bus adapters (HBAs), which support 8 Gbit and are expected to be available around mid-year.

Revenues disappoint, but SAN growth outpaces Cisco's

Brocade reported its director switch revenue increased 69% year over year and 13% from the previous quarter, and its bladed switches increased 53% year over year and 23% sequentially. However, its overall revenue of $347.8 million was below Wall Street's expectations.

Financial analysts pointed out that Brocade did seem to gain on its major rival Cisco Systems Inc., which reported 27% year-over-year revenue gains and a sequential drop in revenue from its MDS SAN director earlier this month. Cisco, citing doubts the market is ready for mass 8 Gbit adoption, will not have 8 Gbit products before late 2008. "Brocade has a solid competitive position [over Cisco], in our opinion," wrote Aaron Rakers, a Wachovia analyst, in a note to clients today.

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