How Brocade CEO Lloyd Carney Energized a Tired Company

NEWS ANALYSIS: During Carney’s 17 months on the job, the company has increased its profit margins and built its market cap up to $4.05 billion.

 By Chris Preimesberger
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Brocade Communications Systems has a tidy and highly profitable $2.3 billion Fibre Channel and Ethernet fabric business. It also has doubled its stock price from $5.25 to nearly $10 in the last 12 months. However, it also has been chasing data networking market share leader Cisco Systems for longer than it cares to remember--which is more than a decade.

Ostensibly, it’s new CEO Lloyd Carney’s job to either close that gap and grow the business, or else to wrap up the company and sell it for the highest price possible. But if you sit down and talk with Carney, a personable 52-year-old native of Kingston, Jamaica, you don’t get the notion at all that he’s interested in selling, even though that’s exactly what he has done with his last two companies--virtual I/O provider Xsigo to Oracle in 2012 and Micromuse to IBM in 2006. That being said, if the right offer were to come along, and the board of directors and stockholders in the company were to agree, then a sale certainly could happen; it could to any company.

During Carney’s 17 months on the job, the 19-year-old company has increased its profit margins and built its market cap up to $4.05 billion--from $2.54 billion at the end of 2012. The numbers have improved steadily as Carney has focused the company on larger enterprise customers and rolled out new software-defined networking and storage systems for users in 160 countries.

Software-Defined Networking and Storage

SDN and SDS is infrastructure that is managed and automated by intelligent software as opposed to the hardware itself. The concept underlying this is to offer customers a way to retain the value of the current storage infrastructure while building out storage capabilities that reflect the developing cloud storage models without having to abandon previous storage investments.

Brocade has been investing in its VDX line of network switches and last year rolled out a new 24-port, 10-Gigabit Ethernet module for its MLXe series of routers designed specifically for software-defined network environments. Carney says they have gained good traction.

Not that long ago, Brocade was trying to define itself at a time when competitors such as Cisco Systems and Juniper Networks were reinventing themselves and moving into new markets. Brocade lost ground in the sales wars by sticking with selling its older Fibre Channel and Ethernet storage networking products and not adding anything new until it bought SDN provider Vyatta in late 2012.

Including his years running Xsigo and Micromuse, Carney has 30 years of experience in the IT business, including time as COO at Juniper Networks and at Nortel Networks as president of its multibillion-dollar Core IP, Wireless Internet and the Enterprise divisions. He also was an executive vice president at Bay Networks.

eWEEK sat down with Carney to get his take on the prospects for the company for the second half of 2014 and beyond.

Originally published on eWeek. This article was originally published on Jun 3, 2014
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