Light Reading
Important products were delayed, and carriers are waiting.

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
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: Light Sabre
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.
Flash Poll
From The Founder
Is your network built on 'The Old IP,' or are you part of 'The New IP' revolution?
LRTV Huawei Video Resource Center
Innovating Access Technology With G.fast

10|1|14   |   3.42   |   (0) comments


Exploring the potential of G.fast technology from the point of view of the Broadband Forum, Huawei – and an end-user.
LRTV Documentaries
A Cultural Shift for an OTT World

9|26|14   |   01:41   |   (3) comments


Telcos need to embrace a new approach to partnerships if they are to generate extra revenues quickly and give customers what they want.
LRTV Documentaries
New Skills Needed as Telecom, IT Collide

9|26|14   |   4:07   |   (1) comment


As telecom and IT collide, new technologies are emerging, new skills are needed and new opportunities for women are arising.
UBB Forum News
Do IP Networks Need An Overhaul?

9|25|14   |   02:01   |   (0) comments


As traffic levels ramp, do IP networks need new technologies and topologies?
LRTV Documentaries
Sprint Wields Its Influence in the Valley

9|25|14   |   3:09   |   (11) comments


Anne-Louise Kardas, Sprint's connection to startups in the Valley, explains how telcos can be innovative and find new opportunities with partners.
LRTV Documentaries
SDN, NFV & The Future of XO's Network

9|25|14   |   3:47   |   (1) comment


XO Communications COO Don MacNeil explains how cloud, SDN and NFV are altering its network requirements as well as changing data centers of the future.
UBB Forum News
The OTT Conundrum

9|24|14   |   01:39   |   (0) comments


What is holding back prosperous partnerships between telcos and the OTT players?
LRTV Documentaries
Putting Broadband to Work

9|24|14   |   01:26   |   (0) comments


High-speed broadband network rollout is key to telco strategies, but it's what happens after the network is built that counts.
Light Reedy
Light Reading's Women in Telecom Recap

9|24|14   |   0:55   |   (4) comments


Our first Women in Telecom breakfast was a huge success, and we hope you'll join us in London for the next event on November 6.
UBB Forum News
Monetizing Ultra-Broadband

9|24|14   |   01:43   |   (2) comments


Ultra-broadband networks need to be built, with fiber-to-the-premises the ultimate goal, but they need to be monetized, too.
LRTV Huawei Video Resource Center
Sales Director of INIT on Plug & Play Switch Devices

9|19|14   |   3:21   |   (0) comments


INIT Italy uses both the Huawei S5700 and S7700 series switches for the campus LAN environment. Sales Director Andrea Curti says their company chose these Huawei devices over others because of their performance, flexible scalability and plug-and-play features.
LRTV Huawei Video Resource Center
Saudi Arabia Upgrades Vocational Training System

9|19|14   |   3:31   |   (0) comments


The Technical and Vocational Training Corporation (TVTC) has 100,000 students, 150 government-owned institutions and oversees 1000 private institutes. The CIO of TVTC explains that Huawei devices have allowed them to manage multiple datacenters using just one software program, scientifically tracking the progress of students and teachers, saving them millions.
Upcoming Live Events
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Half of the world's population will be connected to the Internet by 2017, but not just by smartphones and desktops.
Hot Topics
Facebook Pokes Around LTE Direct
Sarah Reedy, Senior Editor, 9/25/2014
Is Redbox Instant Shutting Down?
Mari Silbey, Independent Technology Editor, 9/30/2014
Sprint Wields Its Influence in the Valley
Sarah Reedy, Senior Editor, 9/25/2014
US Ignite Cultivates Gigabit Apps
Jason Meyers, Senior Editor, Utility Communications/IoT, 9/25/2014
SoftBank Eyes a DreamWorks Buy – Report
Sarah Reedy, Senior Editor, 9/29/2014
Like Us on Facebook
Twitter Feed