& cplSiteName &

Brocade: Revenue Up Despite Soft Carrier Demand

Mitch Wagner
8/22/2014
50%
50%

Brocade saw decreased demand from carriers for routers, but increased revenue and profitability, according to quarterly earnings announced Thursday.

Brocade Communications Systems Inc. (Nasdaq: BRCD) announced revenue of $545 million, up 2% year-on-year and 2% quarter-to-quarter for the third quarter ending August 2. GAAP diluted earnings per share were $0.20, down from $0.26 in the year-ago-quarter and up from a loss per share of $0.03 in the second quarter of this year.

"With another solid quarter behind us, we are seeing the tangible benefits of our data center-focused strategy," Brocade CEO Lloyd Carney said in a statement. Brocade's SAN business has "resiliency and durability" and VDX switch sales are "strong" and "validate our strategic direction."

IP networking business revenue, including products and services, generated $166 million, down 1% year-over-year and up 5% sequentially. The sequential increase was primarily due to higher sales of Ethernet switching products to the US federal government and strong VDX sales to data center customers, Brocade said.

Routing product revenue decreased 19% year-over-year and 20% sequentially, primarily due to customers waiting for new products scheduled to be released in fiscal Q4 2014.

Those new products are 100Gbit/s VDX blades, which faced manufacturing delays pushing them back to the next quarter. The products are scheduled to ship in the next two or three weeks, and Brocade many see difficulty meeting demand. None of the revenue is lost; it's just been delayed, said Jason Nolet, Brocade vice president, data center and campus networking, on the company's earnings call with analysts Thursday.

Brocade anticipates IT networking will be up 6% to 15% in the next quarter, primarily driven by increased demand in the carrier market for new products.


Find out more about key developments related to the systems and technologies deployed in data centers on Light Reading's data center infrastructure channel


Carney called out Telefónica SA (NYSE: TEF) benchmarking results as a recent highlight. Tests run by Telefónica in its labs show Brocade's software-based router can achieve 80Gbit/s throughput, matching the performance levels required for carrier applications and setting a benchmark that supports NFV deployment. (See Telefónica Proves Brocade Router Performs for NFV.)

Vyatta is another bright spot for Brocade; the software networking platform has been adopted by one of the world's largest cloud service providers, and is involved in about 30 proofs-of-concept with Tier 1 providers. Brocade expects to see production implementation in early 2015, CFO Dan Faifax said. (See Brocade Weaves Software-Based Networking Strategy .)

Brocade is also aggressively pursuing NFV customers, looking to maximize market share now and worry about margins later.

Brocade traded at 9.77, up 3.83% at 7:58 pm EDT in after-hours trading.

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to wagner@lightreading.com.

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
8/23/2014 | 10:27:22 PM
Re: It would seem
It will definatly be interesting to see How Cisco responds to them.
Steve Saunders
50%
50%
Steve Saunders,
User Rank: Blogger
8/22/2014 | 9:03:54 PM
Re: It would seem
Brocade is in an amazing position to make the telecom industry interesting for everyone - including (especially) Cisco. 

Excited to see their rocket ship take off this year and next. 

Steve 

 
thebulk
50%
50%
thebulk,
User Rank: Light Sabre
8/22/2014 | 5:36:24 AM
It would seem
So, it would seem that going heavy on data center has paid off for them. Let's see if there virtual play does the same.
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
Masergy: Ability to Adapt Key for NFV

1|16|17   |   6:40   |   (0) comments


Speaking at Light Reading's 2020 Vision in Rome, Masergy's VP, Global Technology, Ray Watson, said agility is key to providing the mix and match NFV-based services that are driving business for the managed service provider today.
LRTV Interviews
Equinix: The Data Explosion

1|13|17   |   4:16   |   (0) comments


At Light Reading's 2020 Vision in Rome, Eric Schwartz, president of EMEA, Equinix, talked about how Equinix is helping its customers manage the influx of data today, and how it's preparing for a future filled with millions of connected IoT devices.
LRTV Interviews
Heavy Reading: The Changing Data Center Landscape

1|12|17   |   6:05   |   (1) comment


At Light Reading's 2020 Vision event in Rome, Heavy Reading's Senior Analyst Roz Roseboro talks about how virtualization is impacting data center evolution and how that evolution is affecting the relationship between service providers, data center operators and public cloud providers.
LRTV Interviews
Boingo: Prepping for Millions of Devices

1|12|17   |   5:07   |   (1) comment


At Light Reading's 2020 Vision in Rome, Boingo's CTO Derek Peterson discusses how wireless operators will address the needs of low-bandwidth and high-bandwidth apps at the same time, the need for more MHz, the impact of IoT and more.
LRTV Interviews
Comcast Shows Off Gig Gateway at CES

1|11|17   |     |   (1) comment


With its largest presence at CES in years, Comcast took the wraps off its long-awaited gigabit gateway and a new platform for managing the home WiFi network. Light Reading Senior Editor Mari Silbey sat down with EVP Chris Satchell to discuss the latest Comcast advance, and met with VP of Product Strategy and Development Andrea Peiro to walk through a demo of the ...
LRTV Interviews
Colt: End-to-End Key for 2017

1|10|17   |   6:21   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Nico Fischbach of Colt said having a multi-carrier, end-to-end service proposition is going to be key for 2017 -- and SD-WAN is instrumental in making it happen.
From the Founder
Cisco's Clemson on Mobile Cloud Video

1|9|17   |     |   (1) comment


Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators. "If you think about where we're going… whether it's a mobile application, or a video ...
LRTV Custom TV
VMware Telco NFV Solutions – Preparing for 5G & IOT

1|9|17   |     |   (0) comments


Shekar Ayyar, EVP & Corporate Strategy/General Manager of Telco for VMware, discusses VMware's Telco NFV solutions role and foundation for the Imminent Arrival of 5G & IOT.
LRTV Interviews
Heavy Reading: Big Video Set to Disrupt

1|6|17   |   4:39   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Heavy Reading's Adi Kishore talks about the challenges of managing and monetizing bandwidth-intensive video, and how service providers will need to transform their networks to cope with the big video explosion.
LRTV Interviews
Heavy Reading: IoT Set to Disrupt

1|5|17   |   7:07   |   (0) comments


Heavy Reading's Senior Analyst of IoT, Steve Bell, tells Light Reading how the Internet of Things (IoT) will transform service provider markets, business models and mindsets, and how virtualizing the network core and Fog networking is key to meeting the agility and flexibility demands of IoT in the future.
LRTV Custom TV
Ensemble SmartWAN Explained

1|5|17   |     |   (0) comments


Ray Le Maistre and Prayson Pate, CTO of the Ensemble division at ADVA Optical Networking, discuss the details around the recent Ensemble SmartWAN announcement from ADVA and its potential impact on the SD-WAN movement as it goes virtual.
LRTV Interviews
Telstra Shares Digital Dos & Don'ts

1|4|17   |   3:21   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Telstra's Managing Director of EMEA Tom Homer shares his insight into what makes a good partner in today's digital world.
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Ericsson: 5G Heralds 'New' New Economy
Mari Silbey, Senior Editor, Cable/Video, 1/12/2017
5G: Another Next-Generation Disappointment?
Iain Morris, News Editor, 1/10/2017
CES 2017: WIC's Picks & What Made Us Sick
Sarah Thomas, Director, Women in Comms, 1/10/2017
IBM, FDA Look to Blockchain to Secure Health Records
Scott Ferguson, Editor, Enterprise Cloud, 1/12/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.