Brocade makes switches, basically high-speed computers that shuttle information among networked devices. The new Silkworm 6400 will have 64 ports, meaning that four times as many devices can be plugged in than with Brocade's current top-end switch, said Peter Tarrant, vice president of strategic marketing.
Brocade has been capitalizing on the rising fortunes of Fibre Channel, a networking technology designed to join servers with storage systems as part of a philosophy called "storage area networks," or SANs. Because SANs separate storage traffic from the standard Internet Protocol (IP) network that joins most computers, different networking equipment is required, allowing new companies to find niches untapped by mainstream networking companies such as Cisco Systems or Nortel Networks.
But while Brocade has benefited from the adoption of SANs by large companies, other Fibre Channel companies haven't been so lucky. While Brocade's share price has more than doubled since the beginning of the year, Gadzoox stock has dropped to a tenth of its January price and has been in the throes of executive turnover. Vixel also has plummeted, while Ancor was acquired by QLogic.
Brocade still has healthy competition, though.
McData, an EMC spinoff that went public in August, and Inrange, which went public in September, both have strong prospects for high-end Fibre Channel switches, analysts say. Both companies have 64-port Fibre Channel switches.
Inrange has signed deals under which Hewlett-Packard and IBM will resell its FC/9000 product. McData is piggybacking on its relationship with EMC, the dominant seller of SAN storage hardware, and also has an IBM sales agreement.
Fibre Channel itself has a cloudy future, though, according to some. Outspoken Piper Jaffray analyst Ashok Kumar, at a recent venture capital conference in Menlo Park, Calif., said Fibre Channel is doomed. It will be replaced by standard IP networking.
"Brocade is doing very well, but it is the last man standing in a dying industry," Kumar said.
Many other analysts are less bold. "We strongly believe that over the foreseeable future, Fibre Channel...is the best-suited solution for the data center," Deutsche Banc Alex. Brown analyst Phil Rueppel said in a recent research note.
The Silkworm 6400 switch, which Tarrant predicted will cost half that of comparable McData products, is the first of several new initiatives for Brocade, Tarrant said.
In the next 12 months, the company also will introduce a higher-end switch with 64 ports to 128 ports. In addition to having an internal design that's faster, the new design will support 2-gigabit Fibre Channel connections, a new version of the specification that's twice as fast as the existing technology.
Brocade also will add security improvements to its products in the next year, Tarrant said. The security features will affect the switches themselves as well as the overall storage network.