Brocade‘s new business focus is on the data center, a move being made partly to shave costs, but also to build on what the company believes is a franchise that’s strengthening as software-defined networking (SDN) takes hold.
Officials detailed the strategy to analysts and press at the company’s San Jose, Calif., headquarters on Wednesday. “We are making an asymmetric bet on data-center networking,” said Ken Cheng, Brocade’s chief technology officer.
That bet involves an SDN approach that’s not only programmable but also “pluggable,” he said. Put another way: Brocade, having less of an installed base than Cisco and no play in Ethernet switching or low-end routers, thinks it can set up a more neutral network that customers can plug a variety of devices into.
The centerpiece of the strategy is Brocade’s Ethernet fabric, VCS, which was introduced in 2010 and got some enhancements as of last week. As with most fabrics these days, VCS is touted as being able to scale out across multiple racks and pods while still being managed as if it were a single switch.
Another big part of the data-center strategy will be the Vyatta virtual router, which can now run 10 Gb/s on one processor core. Brocade can be aggressive in marketing Vyatta because, unlike Cisco, it’s got no switching franchise to displace. “That’s pure upside for us. We think we’re the disruptor there, not the one receiving disruption,” said Jason Nolet, Brocade’s vice president of data-center switching and routing. (In other words, Brocade is the one who knocks.)
The focus on the data center isn’t one big party. Brocade picked that strategy after the too-many-directions-at-once strategy faltered.
“We were starving major initiatives in order to peanut-butter the approach we had,” CEO Lloyd Carney said at Wednesday’s event.
In May, Brocade announced its intention to cut $100 million in costs per year, targeting specific projects rather than across-the-board cuts. (Here’s one example: Instead of OEM’ing wireless products from Motorola, Brocade has struck a partnership with Aruba, as announced earlier this week.) Headcount is around 4,180, down about 9 percent from 4,604 in the first quarter of 2013; roughly 300 of those employees were cut this month.
Brocade is even looking at using more off-the-shelf chips rather than developing ASICs, in some cases. (But the company still believes in ASICs for some projects; at least two are in the works, Carney said.)
Those products that remain are getting continued infusions of R&D money. The Vyatta virtual router is one example; another is the chassis-based MLX router, a new version of which is on the way, Carney said.
The data-center obsession is already visible in Brocade’s sales, where the data center is accounting for 48 percent of the total compared with 45 percent a year ago.
It’s Not Just the Data Center
Just because it’s saying “data center” now doesn’t mean Brocade is abandoning other markets. Service providers do own data centers, and Brocade wants to provide the networks inside and between them. Cloud service providers are a market of particular interest, as Brocade wants to help fuel a new generation that could be called the “services cloud,” Cheng said.
Campus networks are another story. Brocade is dropping enterprise sales there to concentrate on public-sector customers. That’s partly because government customers require certification, which cuts down on the number of competitors, officials said — partly in reference to the U.S. government’s doubts about Huawei and ZTE.
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