Does brocade make you think of silk fabrics and refined design? Well, California-based Brocade Communications takes that elegant image into the world of hardware and software. And for them, the analogies have worked.
Brocade Communications started in 1995—an eon ago for an Internet company. Since then, it has woven its way through a fast-growing world of access to data storage and has risen to the top of its industry. Brocade’s products—which include Fibre Channel switches and SAN (storage area network) management software—provide a connection between server systems and tape and disk storage. The products address the growing need to connect to SANs, which are usually set up as separate networks running parallel to a company's regular network.
Brocade’s products are distributed through OEM and systems integration partners. Its line of switches and software connect servers with storage devices through a Fibre Channel network, providing high-speed, reliable connections. The company's SilkWorm products include six models of switches. Three are entry-level, eight-port switches that are upgradeable as the SAN expands. Another is a software-upgradeable loop switch that connects a loop-based storage environment to a fabric-based SAN. The two high-end models are Fibre Channel fabric switches that provide universal ports, making installation simpler, enabling hardware port zoning for security, and providing easy serviceability features.
Brocade has approximately 200 employees. It is headquartered in San Jose, CA, with sales offices in Europe, the Middle East, and Africa.
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Knowledge management and e-business are fueling an increasing demand for SANs. Analysts expect the SANs market to expand rapidly because corporate demand for storage is said to be increasing at a rate of 100% to 300% a year. The demand includes issues of scalability, 24 x 7 uninterrupted access to corporate data, reliability, and disaster recovery. Dataquest predicts a $28 million market by 2002 for fibre channel solutions, and says that approximately $2.8 million of that will be fibre channel-based switches and software for SANs, such as those Brocade produces. IDC identified Brocade as the market leader in 1999, with an 80 percent share of the market.
One major advantage Brocade has is its sales distribution channels. The company's products are distributed through OEM partners who provide storage, systems, and application solutions to their clients. Partners include CNT, Compaq, Dell, SGI, StorageTek, NEC, Amdahl, Data General, Siemens Computers, HP, IBM, Network Appliance, Groupe Bull, and other industry leaders. Brocade claims that its OEM channel penetration is more than 90 percent.
Brocade also has a strategic relationship with more than 40 systems integrators worldwide. The company has been aggressive about soliciting strategic relationships with these and other vendors, including Emulex, Legato Systems, QLogic, Veritas Software Corp., and Tivoli Systems.
Brocade conducted an initial public offering in May 1999, raising nearly $65 million. The company reportedly had the third highest performing IPO in 1999. In February 2000, Brocade announced net revenues for Q1 of $42.7 million, which was a 434 percent increase over the $8 million reported a year earlier. Net income was $7.3 million in Q1, a $9.1 million increase over the net loss of $1.8 million reported for the same period a year earlier, and more than double the $3.6 million reported in Q4 1999. Also in February, Brocade announced its second two-for-one stock split since the company went public.
- Greg Reyes, president and chief executive officer
- Mike Byrd, chief financial officer
- Kumar Malavalli, co-founder and vice president of technology
- Paul Bonderson, co-founder and vice president of engineering
- Peter Tarrant, vice president of marketing and business development
- Charlie Smith, vice president of worldwide sales
- Vic Rinkle, vice president of operations
- Stephanie Jensen, vice president of human resources
What others are saying about Brocade Communications
"Brocade Communications (Nasdaq: BRCD) is breaking out well ahead of the pack. Shares of the storage networking company's stock soared Friday to a high of $284, before pulling back a little and ending the day at $275.88, up 13.2 percent. On Thursday evening, Brocade announced its second stock split and reported earnings of 12 cents a share for its first fiscal quarter of 2000, seven cents a share ahead of analysts' projections. Brocade's surprisingly upbeat earnings stand in stark contrast to its competitors, many of which have seen their stock prices plunge following disappointing fourth-quarter earnings announcements. Pundits in the red-hot storage networking sector may take this as a sign that Brocade is consolidating its dominance."
—"Brocade busts out," by Sarah Lai Stirland, Redherring.com, Feb. 22, 2000
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