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Brocade Sells Router Subscriptions

Craig Matsumoto

Brocade Communications Systems Inc. (Nasdaq: BRCD) is trying out an interesting business model: You can buy or lease equipment, but now you can also subscribe to it.

Under the Brocade Network Subscription, announced Tuesday at VMworld in Las Vegas, a customer gets shipped a Brocade router for free, then pays per month depending on how many ports get used. This way, customers can add or subtract router ports at will, rather than buying a large router or switch and filling it over time.

The deal isn't open to just anybody. Brocade is targeting large enterprises and data centers, and the company will be vetting customers before offering them subscriptions. Brocade classifies the subscription as a service, which means it can come out of maintenance budgets rather than equipment budgets; that trick will especially come in handy for government customers, says Lisa Paquette-Nelson, a finance director at Brocade.

Brocade also has some data-center product announcements at VMworld, including the VDX 6730 Data Center Switch. It's a 10Gbit/s switch line analogous to the 6720, Brocade's flagship switch, but with the addition of native Fibre Channel ports. Brocade is also announcing a pizza-box switch, the 6710, that includes 1Gbit/s ports as well as 10Gbit/s ports and omits support for Fibre Channel over Ethernet.

Why this matters
Brocade isn't shy about admitting it's second fiddle to Cisco Systems Inc. (Nasdaq: CSCO) -- and even to Juniper Networks Inc. (NYSE: JNPR) and Alcatel-Lucent (NYSE: ALU) -- in many customers' eyes. This is an innovative gimmick and an interesting take on the idea of flexible capacity.

If it works, it could present a new way to sell big pieces of gear. Expect these deals to be sparse at first, though; Brocade will want to watch each one carefully and make sure it's actually going to make money at this. Eventually, the company hopes to offer subscriptions through its channel partners.

As for the new equipment, it offers a few new twists on Brocade's data-center strategy, but the overall message, articulated last year, remains the same. Brocade is offering combined blocks of server, storage and networking -- but with major OEMs providing the server part. That's in contrast to Cisco's Unified Computing System, which uses Cisco-developed servers.

For more
Brocade's subscription pricing has no precedent, but we can give you lots of links about this fabric stuff.

— Craig Matsumoto, West Coast Editor, Light Reading

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User Rank: Light Beer
12/5/2012 | 4:55:02 PM
re: Brocade Sells Router Subscriptions

Ethernet switches and the Application Delivery Controllers are also a part of the mix, Craig. In fact, the Rackspace win that we announced with this launch (http://bit.ly/pxBPtr) is an ServerIron ADX deployment.

Thank you for covering this news,

Brocade PR team

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