Tuesday, November 24, 2009

Brocade gives thanks

November 24, 2009 – Brocade mildly surprised financial analysts this week when it reported its fourth fiscal quarter and full fiscal year end with, for the most part, good news. Highlights: Quarterly revenues increased 31% year-over-year to $521.8 million, and annual revenues increased 33% year-over-year to more than $1.95 billion.

CEO Mike Klayko noted that Brocade had exceeded the Street’s consensus non-GAAP EPS estimates for the seventeenth consecutive quarter.

In the fourth quarter, Brocade shipped about one million SAN ports.

Comparing Q4 2009 to Q4 2008, OEM revenues were down from 88% to 65% of total revenues, while channel/direct revenues jumped from 12% to 35% of total revenues. On a related note: storage-specific revenues, as a percent of total revenues, fell from 84% to 58%, while revenues from Ethernet products accounted for 25% of the total in Q4 2009 compared to 0% in the pre-Foundry-acquisition Q4 2008.

Klayko had plenty to say, but his comment about a possible acquisition was what made the news. “We’re not actively shopping ourselves. That’s false.” I suppose that depends on what “actively” means, but the financial community seems to think that an acquisition isn’t about to happen now that HP opted for 3Com, which squelched speculation that HP would scoop up Brocade. Since the HP-3Com announcement, Brocade shares have been down more than 10%. They closed at $7.10 today. The 52-week range was $2.05 to $9.84.

I’m sure stockholders were hoping for (betting on) an acquisition, but Brocade seems to be in great shape on its own. Cisco isn’t giving them much of a run for the money in the FC switch space; Brocade is gaining a toehold in the FC HBA space; it’s gaining share in the Ethernet market; and the company will be well-positioned in the FCoE/CEE field by the time that battle hits full stride. In other words, when end users actually start deploying FCoE.

For more info from Brocade:

Prepared Remarks
Summary Sheet

Wednesday, November 18, 2009

SSDs: STEC on a roll

November 18, 2009 – I don’t invest in storage-specific vendors’ stocks, but if I did I’d be taking a close look at the solid-state disk (SSD) drive arena; in particular, a vendor that seems to be the early leader in this space, at least as measured in terms of OEM design wins: STEC.

This company is on a roll, having racked up design wins with most of the major disk array vendors, including Compellent, EMC, Fujitsu, HP, Hitachi Data Systems, IBM, LSI/Engenio, Sun and others.

The company hosted an Analyst Day earlier this week in NYC, where it announced/previewed a number of new products, including a third-generation ZeusIOPS drive with multi-level cell (MLC) technology (in qualification now), a SATA version of its Mach SSD (2Q10), and Fibre Channel and SAS SSDs based on ASICs. (The Fibre Channel versions of the Zeus SSDs were previously based on field-programmable gate arrays, or FPGAs).

At the Analyst Day conference, STEC officials identified the company’s primary competitors in the enterprise SSD space as Hitachi/Intel (mid-2010), Pliant (2010), Toshiba/Fujitsu (2011/12), Fusion-io (on servers) and, eventually, disk drive manufacturers such as Seagate and Western Digital.

“With six- to nine-month+ qualification cycles, the top slots at OEMs will be filled early, making it a horse race to see who can be second to STEC at most OEMs,” wrote Needham & Co. analyst Richard Kugele in a research note on STEC’s Analyst Day presentations. “ . . .we (and STEC) expect second sourcing to be at the company level rather than the product level, with specific SKUs devoted to certain suppliers due to the lack of [SSD] standards and interoperability.”

Not surprisingly, financial analysts have extremely optimistic stock price expectations for STEC.

For more information on solid-state disk drives, visit InfoStor’s SSD Topic Center.

On a somewhat related note, Adaptec and Intel will be hosting a webinar tomorrow (Thursday, Nov. 19) at 2 p.m. ET “to discuss how data center managers, system integrators, and storage and server OEMs can seamlessly integrate SSDs to reduce IT costs, reduce power consumption and minimize maintenance costs and physical space requirements, all with maximum I/O performance.”

You can register for the webinar here.

Monday, November 16, 2009

Emulex, QLogic jockey for position

November 16, 2009 – The Dell’Oro Group market research firm recently released its Q3 2009 SAN Report, which includes market share figures for SAN product categories such as Fibre Channel HBAs and converged network adapters (CNAs) based on the Fibre Channel over Ethernet (FCoE) standard.

As they always do, Emulex and QLogic almost immediately released press releases claiming market share gains and/or leadership. Nice piece of PR one-upmanship. In each case, the companies just emphasize the slice of those markets that they happen to have good news about.

For example, Emulex reported that it is the leader in FCoE CNAs, according to the Dell’Oro report, with revenue growth of 160% over the previous quarter. The company also highlighted the fact that it gained 4% market share in the 8Gbps Fibre Channel HBA market.

QLogic reported that it’s the leader in the overall (4Gbps and 8Gbps) Fibre Channel HBA market, with a 54.4% share in Q3. The company boosted its lead over Emulex by 1.9%, for a lead margin of 17.9%. In addition, according to the press release:

“On the 8Gb Fibre Channel adapter front, QLogic increased its revenue share by 3.6 percentage points compared to the previous quarter, increasing its revenue share lead to 56.6 percent for Q3. In the category of 8Gb Fibre Channel mezzanine cards, QLogic continued to dominate with 78 percent of revenue share for Q3 compared to the nearest competitor's 22 percent share. In the broader category of all mezzanine adapters (4Gb and 8Gb), QLogic increased revenue share by 1.6 percentage points to 72.4 percent and held a 44.8 percentage point lead for the quarter.”

On the FCoE CNA front, these two rivals had better ramp revenues, shipments and market share, because in the first half of next year NIC giants Broadcom and Intel will put both feet in the FCoE market and this will no longer be a Storage Vendors Only skirmish.

An Industry Brief released by IT Brand Pulse notes that CNA port volume shipments increased 133% in Q3, to a total of 9,800 ports, and revenue increased 148% to about $4 million.

In a blog post on FCoE CNAs, IT Brand Pulse CEO and senior analyst Frank Berry says that, “We could see a quantum increase in CNA volume very quickly if Broadcom and Intel position their 10Gb CNAs to displace some or all of the 10Gb NICs they have been shipping for years and that are now ramping at over 50% per quarter.”

For more of Frank’s opinions on the CNA market, see “Radar Picks Up CNA Growth In Q3.”

Tuesday, November 10, 2009

Who are the leaders in InfiniBand?

November 10, 2009 – With the Supercomputing 09 conference kicking off next week, the spotlight will be on InfiniBand, which has become the interconnect of choice for high performance computing (HPC) clusters. Despite InfiniBand’s success in the HPC market, there are still relatively few vendors, and only three are perceived as leaders, according to a recent survey conducted by IT Brand Pulse.

According to the survey, Mellanox is (by a long shot) perceived as the overall leader in InfiniBand networking and InfiniBand adapters, and Voltaire is perceived as the leader in InfiniBand switches. QLogic was also cited in each of the three categories.

Specifically, Mellanox was cited as the leader in InfiniBand networking by 82.4% of the survey respondents, followed by Voltaire (11.8%) and QLogic (5.9%).

More than 91% said that Mellanox was the leader in InfiniBand adapters, followed by QLogic at 8%.

And 66.4% of the HPC users cited Voltaire as the market leader in InfiniBand switches, followed by QLogic at 27.7% and Mellanox at 5.9%.

IT Brand Pulse surveys the end-user community on an ongoing basis, and provides reports based on the survey results. Highlights of the survey results are posted on infostor.com.

IT Brand Pulse is currently surveying end users regarding their perceptions of vendors in the data deduplication, iSCSI storage and adapters, and tape library markets. The survey takes less than 5 minutes and participants have a chance to win an Apple iPhone 3GS from IT Brand Pulse. If you want to participate in these surveys (and I highly encourage you to do so), click here.