Brocade's Vyatta SDN Revenue 'Not Yet Material' as New Switches Debut

Brocade wraps up its fiscal 2013 and announces new hyper-edge switch.

By Sean Michael Kerner | Posted Nov 19, 2013
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Brocade reported its fourth quarter fiscal 2013 earnings late Monday, showing year-over-year net income growth and a weak outlook for its IP networking business moving forward. The company also announced a new ICX 7750 switch, providing new flexibility for Ethernet network deployments.

For Q4 of fiscal 2013, Brocade reported revenue of $559 million, a 3 percent year-over-year decline. Revenue for the full year was down by 1 percent year-over-year, coming in at $2.2 billion. While revenue was down, however, net income is on the rise. For the fourth quarter, Brocade reported net income of $64 million, up from $54 million a year ago. For the full year, Brocade reported its net income at $208.6 million, up from $195.2 million in 2012.

Looking forward, Brocade provided some mixed revenue guidance for the first quarter of fiscal 2014. Brocade expects its storage (SAN) revenue to grow by 3 to 5 percent quarter-over-quarter. In contrast, the vendor expects IP Networking revenue to shrink by 10 to 17 percent quarter-over-quarter. Brocade blames the IP Networking weakness on U.S. government-related woes stemming from sequester-related disruptions. Rival networking vendor Cisco recently reported a similarly weak outlook.

One area that Brocade looks to grow in 2014 is its Software Defined Networking (SDN) efforts, which include its Vyatta division. Brocade acquired Vyatta a year ago, in November of 2012.

Ken Cheng, CTO and VP of Corporate Development & Emerging Business at Brocade, said during his company's earnings call that Vyatta revenue is not yet material to Brocade's business. That said, Cheng said that he expects bookings growth to continue in fiscal 2014.

"We are seeing a lot of service providers and telcos re-architecting their networks and services, leveraging SDN and NFV," Cheng said. "And we are at that table and fully engaged in these architectural conversations."

Brocade CEO Lloyd Carney said that his direction to his team is for Vyatta to be a "land grab" opportunity.Brocade CEO

"We're not focused on revenue. We're focused on footprint and customer wins and account wins," Carney said. "So it is all about grabbing as much market share as humanly possible, getting as many evaluations as possible done, as many downloads as possible done, because we have the right product and we just need to get as many people's hands on it as humanly possible."

ICX 7750 Switch

To help bolster its high-end switching portfolio, Brocade this week announced its new ICX 7750 switch.

The ICX 7750 is part of Brocade's HyperEdge initiative, first announced in 2012 and expanded earlier this year with the ICX 6650 switch.

The ICX 7750 is a fixed configuration switch that is available in three different models:

  • 26 fixed 40 GbE and six 40 GbE slot module
  • 48 fixed 10 GbE and six fixed 40 GbE + 6×40 GbE slot
  • 48 10GBase-T and six fixed 40 GbE +6×40 GbE slot]

With distributed chassis support, up to to 32 ICX 7750s can be grouped together into a single logical management domain. The new switch is powered by a Broadcom Trident II chip.

Sean Michael Kerner is a senior editor at EnterpriseNetworkingPlanet and InternetNews.com. Follow him on Twitter @TechJournalist

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