I shall be honest – when Cisco came into the wacky world of Fibre Channel, I figured 3-5 years and everyone else was toast. I was wrong. Brocade, a punk little company back then, had to deal with their CEO (former) being prosecuted by the department of Justice on stock options tampering, pretty much zero presence in the core (read: big giant customer) FC market (dominated entirely by McData after years of consolidation), their own market dominance in the FC switch business under attack from all angles including their own customers (OEMs), and then just for fun, the biggest networking force in history decided to participate.
Instead of dying, however, the company and their new CEO, Mike Klayko (acquired via Rhapsody, a little IP storage player Brocade bought), have not only defied outrageous odds and survived, they are kicking ass nine ways from Sunday (a technical term meaning "doing very well"). They bought McData even though there was tremendous pressure (read: Lobbying) brought to bear around the issue of a monopoly (which is funny in and of itself) but the only reasonable choice was made to let it happen. Wall St. had ripped any hope out of the Brocade valuation, not buying any of it. Brocade then basically shut up and has executed pretty much flawlessly since.
When McData and Brocade merged, Cisco – as they should – was able to freeze the market for Directors and scare everyone. Cisco grew share while McData customers were paralyzed. Brocade had to merge the product lines – no easy feat at all – and hope that the McData customer base would either buy into the story (tough sell) and move to the new Brocade (not even remotely compatible) director, or at least stay neutral and do nothing instead of dumping McData for Cisco. Cisco, after all, could easily give away FC directors if they wanted, as the companies who run them are the biggest of the big – which by default makes them huge Cisco customers. Somehow, Brocade kept chugging – and growing – and hitting their numbers. For a long time this completely randomly sized market ran at 50/50 according to the folks at Dell'Oro. Now in the last two quarter, the McData folks on the fence have apparently made their decision – and the decision is Brocade. Recent numbers show Brocade has grown share 15% over six months and now it's 58% to 43% in the director space (Brocade has never really been challenged in the mid to high-end switch space). Pretty amazing.
They recently bought Foundry – and once that closes will have to start extending their world to the big wide world of Ethernet in earnest – but that's ok. They stay in the core, in the data center, and their story play nice. Who cares what the protocol is? It's a virtual world. I love the story (but not the way they tell it necessarily) and better yet, say what you will, these dudes execute. It's nice to watch.
Is Brocade/Foundry going to put Cisco out of business? Absolutely not – probably won't even make a big dent overall, but I love it that the little guy who by all rights should be squished continues to grow and prosper against the odds. Brocade is like Rocky Balboa, without as many bad accents.
Case in point regarding execution – in 2008 thus far Brocade has hit all their numbers (crushed a few) while making huge share gains AND has turned over every single hardware product they offer. All new directors and switches – top to bottom – which is absolutely amazing for a company with that many products. I don't know that I can point to another example of anyone else ever turning over their entire product line successfully in one year while losing share and shrinking revenue, let alone growing both.
Now, if they only learned to tell people about this stuff imagine what they might pull off.
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