Brocade Declares 2014 Its Most Profitable Year Yet
Revenue is down, but profits are up for networking vendor and OpenDaylight SDN collaborator Brocade.
Brocade reported its fourth quarter and full year fiscal 2014 earnings on November 24, showing some positive trends as the networking vendor positions for future growth.
For the fourth quarter, Brocade reported revenue of $564 million for a one percent year-over-year gain. For the full year, revenue was reported at $2.21 billion for a one percent year-over-year decline. During the company's earnings call with analysts, Brocade CTO Dan Fairfax said that the revenue decline was due to the divestiture and repositioning of certain product lines that Brocade announced a year ago, as well as the challenging federal spending environment in the first half of the year.
Net income for the fourth quarter was reported at $83 million, up from $64 million in the fourth quarter of 2013. For the full year, net income was reported at $237.97 million, up from $208.62 million in 2013.
"Fiscal 2014 was the most profitable year in the company's history, reflecting our continued focus on efficiency and delivering on the leverage in our business model," Brocade CEO Lloyd Carney said.
Carney took over as Brocade's CEO in January and had been working hard over the course of 2014 to reposition the company as a leader in both IP networking and SAN storage markets.
"A year ago, we told you that we'd be a leader in new IP technologies, and since that time, we've delivered on that promise, executing an aggressive product roadmap, hiring significant talents, and making targeted technology investments that enhance our offering in key customer segments," Carney said.
As an example, Carney pointed toward the recent announcement of the Brocade Vyatta Controller. The Vyatta Controller is an OpenDaylight-based Software Defined Networking (SDN) technology. Brocade has emerged as one of the leading vendors and contributors in the multi-stakeholder OpenDaylight collaboration project over the course of 2014.
"The product is just becoming generally available this month, and we already see interest from Tier 1 service providers and early enterprise adopters," Carney said.
Carney added that Brocade is now also enabling support for OpenFlow 1.3 across its VDX and ICX switching platforms and MLXe routing platform.
"As a result, over the coming year you'll see us announce new software-defined networking applications that deliver concrete business value for large enterprise and service provider customers," Carney said.
Brocade vs. Cisco
One of the common themes that Carney has reiterated throughout 2014 is the competitive positioning of Brocade against networking industry giant Cisco.
During the fourth quarter earnings call, Carney noted that Brocade has a strong relationship with EMC that could grow as a result of recent moves with VCE. VCE is a joint venture that was originally set up by EMC, VMware and Cisco, though Cisco has recently reduced its investment and participation in the effort. Carney expects that Cisco's diminished role in VCE represents an opportunity for Brocade
"[EMC is] familiar with our portfolio, they know how we can help them win," Carney said.
Sean Michael Kerner is a senior editor at Enterprise Networking Planet and InternetNews.com. Follow him on Twitter @TechJournalist.