Brocade Grows Its Ethernet Business

Brocade reported its fourth quarter 2011 financial results this week, showing continued Ethernet growth.

By Sean Michael Kerner | Posted Nov 22, 2011
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Brocade (NASDAQ: BRCD) reported is fourth quarter 2011 financial results this week, showing continued Ethernet growth.

For the quarter, Brocade reported fourth quarter 2011 revenue of $550 million, which is only $1 million more than the $549 million reported in the fourth quarter of 2010. Earnings Per Share declined to a loss of $0.01 down from earnings of $0.05 per share in 2010.

For the full fiscal 2011 year, Brocade's revenues were reported at $1.79 billion up from the $1.73 billion reported in 2010.

Overall, it is Brocade's Ethernet business which is one of the key drivers for the networking and storage vendor. In the fourth quarter of 2011, Ethernet product revenue hit $189.2 million, which is an 11 percent year-over-year gain. In contrast, Brocade's storage business was down 4 percent year-over-year to $361.3 million in the fourth quarter.

Part of the reason for Brocade's Ethernet success is that it is now effectively cross-selling solutions.

"At the end of Q4, we can now point to 60 percent penetration of Ethernet sales into our top 100 SAN accounts, with more than half of those customers purchasing Brocade Ethernet products in the quarter," Michael Klayko, CEO of Brocade said during the company's earnings call. "This demonstrates majority of our large SAN customers trust Brocade as a complete networking solutions provider."

Ian Whiting, Senior Vice President of Worldwide Sales and Marketing at Brocade commented that part of the Ethernet growth was driven by the company's ability to win more large deals.

"In fact, one of the other metrics that we look at is the number of million dollar Ethernet transactions per quarter," Whiting said. "We hit an all-time high in Q4, which means that we're winning not only in the traditional campus LAN space, but also winning in larger Enterprise accounts."

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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