Before the War, the Storage Sector Peacefully Soldiers On Page 2
But Goldman Sachs' Laura Conigliaro took a more holistic view after attending Brocade's analyst meeting Monday night. She noted that Wall Street is a bit unsure as to how the switch specialist's July quarter would fare in the bear market, but that Brocade is enjoying "enough critical mass that it can gather together an impressive number of customers." Translation: no worries yet.
Conigliaro research yielded the fact that customers are very much interested in deploying SANs, which Brocade specializes in powering. She heard from customers who claimed they would set up starter SANs with two to three switches, but pledged to expand to 10 switches by year's end. While this is certainly good news for Brocade, Conigliaro indicated the sun doesn't shine as bright on the sector in terms of interoperability, as last week's six-company, SNIA partnership indicated.
"... despite much talk about interoperability, end users remain skeptical , and are likely to remain with a homogeneous SAN for the foreseeable future," Congiliaro said.
So, the synopsis is that things look good for Brocade, an important player in the field, but hardly the only one. No, there is more than currently meets the eye and for the switch maker, king hardware company Cisco Systems Inc. looms large on the horizon. Conigliaro indicated in a research note last week that while many storage networking product makers are getting along nicely now, that there will be a period of shakeout, price undercutting, and a time for rivals to "lock horns."
"The merging of storage and networking technologies in storage networking imply that companies will be in a state of 'coopetition' for the near term but will be more competitive going forward. From the storage networking side, Brocade is emerging as the leader in providing a robust and feature rich platform. At the same time, Cisco is emerging as the leader in providing complementary tools to extend and broaden the reach of SANs, and continues to work with Brocade in developing a blade that would enable two distant fibre channel SANs to be connected via IP," Conigliaro wrote. "Since both companies have broader ambitions beyond their current capabilities -- with Brocade looking to add traditional networking features such as security and QoS to its platform as well as add multiprotocol capabilities such as IP to its switches, and Cisco looking to extend the reach of its products beyond just interconnecting SANs, including working on the development of large multi-protocol switches in its highly secretive Andiamo group -- the two are increasingly likely to be competing with each other in the future."
Rest assured, Cisco and Brocade are hardly the only contenders analysts see as duking it out in the storage ring later. There is IBM and Network Appliance, Hitachi and EMC -- the list goes on and on. Figuring out who will square up with who will no doubt prove as maddening as it will be interesting to watch in the next year.
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