Where Brocade’s SAN Segment Is Headed in Fiscal 2Q17
SAN’s portion of revenue in fiscal 1Q17
Hardware technology (QQQ) firm Brocade Communications (BRCD) has two primary business segments: SAN (storage area network) and IP Networking. In fiscal 1Q17, Brocade’s SAN business accounted for 53% of the firm’s total revenue, as compared to 46% of revenue in fiscal 4Q16 and 61% of revenue in fiscal 1Q16.
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In fiscal 1Q17, Brocade’s SAN revenue fell 12% YoY (year-over-year) and rose 1% QoQ (quarter-over-quarter) to $307 million. Revenue in fiscal 1Q17 fell due to a 20% fall in Brocade’s Fibre Channel and Embedded Switch segment.
How Brocade’s Fibre Channel technology helps businesses
Brocade’s Gen 6 Fibre Channel technology helps Dell EMC (DVMT) all-flash array customers to improve performance and reliability of storage deployments. Dell EMC has a broad portfolio of storage products. In order to enhance the value of Dell’s storage products, businesses can use Brocade’s Gen 6 Fibre Channel technology, which provides “an agile and easy-to-deploy network foundation between servers and Dell EMC all-flash storage to help eliminate bottlenecks for high-transaction, mixed workloads in flash-based arrays.”
Last year, Broadcom (AVGO) acquired Brocade for $5.9 billion due to the latter’s strong cash flow and revenue. Brocade manufactures fiber channel storage area network switches that connect storage systems to data center computers and complement Broadcom’s (AVGO) networking and storage portfolio. However, Brocade’s fiber channel business is falling as fiber is being replaced by Ethernet.