The move towards open Software Defined Networking and virtualized networking gear is having a real impact, according to Brocade CEO Lloyd Carney.
Brocade reported its second quarter fiscal 2014 earnings on May 22, with revenue coming in at $537 million for flat year-over-year growth. Looking at Brocade’s business units, storage SAN hardware, support and services revenue was reported at $379 million for a one percent year-over-year gain. Brocade’s IP networking business revenue was reported at $157 million for a year-over-year decline of four percent.
“The year-over-year decline was due to lower revenue from our U.S. federal customers as well as product lines that have been impacted from the change in our strategic focus over the past year,” Daniel Fairfax, Brocade CFO, said during his company’s earnings call.
Looking forward, Fairfax said that Brocade expects its IP networking product revenue to be up 2 percent to 8 percent year-over-year next quarter.
Brocade has increasingly been shifting its focus to software in recent quarters, including a recent reorganization of its Application Delivery Controller (ADC) business to focus more engineering resources on software-based ADX products.
“Vertical architectures are giving way to open solutions that allow customers to select best-of-breed technologies that enable new services and networks optimized for the customer’s own specific requirements,” Carney said. “I can say without hesitation that openness is an integral part of nearly every discussion I have with customers, and I firmly believe it is creating meaningful business opportunities for Brocade.”
“Disruption in the data center is real and is happening today,” Carney added.
Speaking specifically about Brocade’s ADX ADC technology, Carney said that in the months ahead, the company expects that the ADX software business will grow by approximately 30 percent and on the hardware side by about 1.5 percent.
Though software is a key focus for Carney, hardware isn’t going away and is also a priority.
“On the routing front, we had a less-than-stellar quarter, but there is a lot of good deals in the pipeline, there are some good opportunities, things are working,” Carney said. “So we continue to invest in the routing space, especially focused on our data center and feel pretty good about the new products being released. And the next-generation router is on the block right now to be shipped end of next year.”
Carney also took time during the earnings call to take a shot at FCoE (Fibre Channel over Ethernet) deployments as opposed to native FC. Carney said that the only customers actually moving to FCoE are those that are doing it under duress.
“We have seen more customers try FCoE end-to-end and go away from it than customers who have successfully deployed it,” Carney said.
Sean Michael Kerner is a senior editor at Enterprise Networking Planet and InternetNews.com. Follow him on Twitter @TechJournalist.