Brocade bets its future on software-defined networking

• Aims for leadership position, says it has little or no legacy issues
• Customer mindset a challenge, education and awareness the key

BROCADE Communications Systems Inc, a maker of computer switches for data-storage networks, believes it has what it takes to secure the leadership position in the software-defined networking space.
 
“The company is betting big time on software-defined networking. We want to be the leader and to maintain the leadership position in this space,” said Brocade South-East Asia regional director Beni Sia (pic above).
 
“We believe we can do it because we have very little or no legacy issues,” he said at a meeting with media and analysts in Kuala Lumpur.
 
Nevertheless, Sia admitted that it’s still early days for software-defined networking (SDN), as most companies’ networking functions are still predominantly hardware-based. This means that customers are still spending on physical routers and switches, among other types of gear.
 
“I definitely think that [SDN is] the space where we will be driving a lot of activity towards, and a lot of it has been around educating customers.
 
“But then, after a while, the cycle kinds of goes through this ‘stand still’ phase where potential customers all of a sudden realise that the way they are structured doesn’t really support where they are going to,” he added.
 
Brocade also believes that the IT world is moving towards the ‘New IP’ era, a world of state-of-the-art virtualised IP (Internet Protocol) networks.
 
“The New IP is the ideal network architecture for the Third Platform [i.e. cloud, big data/ analytics, mobility and social],” said Sia, adding that the way today’s network is designed is not the best way to address the needs of the Third Platform.
 
“It’s like trying to take the network we use today, which is designed only to satisfy millions of users, to satisfy billions of users,” he said.

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Open source oomph
 
Brocade does seem to be putting in the pieces to strengthen its portfolio in SDN and network functions virtualisation (NFV).
 
First, it acquired SDN pioneer Vyatta Inc in 2012. Although financial terms were not disclosed, it is believed that prior to the acquisition, Vyatta had raised over US$40 million in venture capital funding from firms like JPMorgan, Citrix Systems, Arrowpath Venture Partners and HighBar Partners.
 
The acquisition complements Brocade’s own research and development investments in Ethernet fabrics and SDN.
 
“Vyatta also plays a key role in Brocade’s NFV offering for cloud and service providers,” said Sia.
 
Second, Brocade – via its Vyataa Controller – also became the first vendor to offer an OpenDaylight SDN controller.
 
OpenDaylight is a collaborative open source project hosted by the Linux Foundation. The project aims to speed up the adoption of SDN and create a solid foundation for NFV.
 
“The Brocade Vyatta Controller is the first commercial controller built directly from OpenDaylight code, without any proprietary extensions or platform dependencies,” Brocade said in a statement.
 
“Users can freely optimise their network infrastructure to match the needs of their workloads, and develop network applications that can be run on any OpenDaylight-based controller,” it added.
 
Sia said that the move to develop the controller entirely based on OpenDaylight code is a sign of Brocade’s long-term commitment to open source, and said he hopes that it would increase customers’ confidence in Brocade about providing resources and support for the open source platform.
 
Third is its most recent corporate development, in which it announced its intention to acquire Riverbed Technology’s SteelApp product line in an all-cash asset transaction. SteelApp is a leader in virtual applications delivery controllers.
 
“Brocade continues to execute aggressively to capitalise on the disruptive force of software in IP networking,” chief executive officer Lloyd Carney said in a statement.
 
“Brocade is the No 2 data centre networking vendor worldwide and this acquisition strengthens our unique position as the adoption of software-centric networking is accelerating,” he added.
 
More work still needs to be done
 
Although the process to educate the market has begun, Sia said that there is a lot more that still needs to be done before seeing mass adoption of SDN.
 
He said that one of the challenges Brocade is facing is changing the mindset of its customers and potential clients.
 
“It’s virtual and it is hard for them to visualise sometimes, so we need to constantly engage with them, planning a lot of activities with partners, and to increase touch points,” he added.
 
The good news is that South-East Asia, the region Sia is responsible for, is showing good progress in education and awareness.
 
“We already have small deployments. It is normal for people when adopting new technologies, they want to try a little bit first,” he said.
 
Whether or not the education and awareness efforts translate into mass adoption remains to be seen, but it is definitely showing results in one area – the sales momentum in Brocade’s overall business, Sia claimed.
 
“A customer’s buying decision, although there are processes and so forth, to a certain extent is driven by sentiment and emotion.
 
“Our software-defined networking story, in terms of our positioning, how we are executing, and where we are executing, is getting a lot of traction and that has helped us to get a fair bit of the hardware business.
 
“They want to invest with the knowledge that they are betting on the right partner,” he declared.
 
While Sia was unable to share Brocade’s latest financial results, he claimed that its fiscal first quarter performance in South-East Asia was “wonderful.”
 
Brocade is expected to report its financial results for its first quarter of 2015 on Feb 19 following the close of the market.
 
In its fourth quarter of fiscal year 2014 ending Nov 1, 2014, it reported fourth quarter revenue of US$564 million, representing an increase of 1% year-over-year and an increase of 3% quarter-over-quarter.
 
Revenue for fiscal year 2014 was US$2.21 billion, down 1% year-over-year due to the divestiture and repositioning of certain product lines.
 
“Looking at the pipeline that we have, I am comfortable to say that the momentum is sustainable,” said Sia.
 
“The good thing about the first quarter was that it wasn’t driven by one huge contract; it was driven by a number of jobs that were sizeable. We are gaining momentum,” he declared.
 
Meanwhile Brocade Malaysia country manager Sean Ong (pic) said that he is “very optimistic” that business in Malaysia will grow by double-digits this financial year.
 
“We are getting good run rates. We are seeing our customers, which started with one solution, adopting more products and solutions.
 
“This gives me strong confidence that this year will be a good year,” he added.
 
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