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Network World - Brocade plans to lean more on the reseller channel to boost its sagging fortunes in Ethernet and IP, according to the company's new marketing chief.
Sales of Brocade's Ethernet switches, obtained from its multibillion dollar acquisition of Foundry Networks in 2008, were down 24% in the first quarter while competitors all grew at least 20%. Brocade and industry analysts blamed poor sales execution, predominantly through OEMs, and a high-level executive left the company as a result.
Some view the damage as perhaps irreversible. Bernstein Research reportedly downgraded Brocade this week based on the Foundry business being "severely impaired, potentially permanently."
Now, new Chief Marketing Officer John McHugh is aiming for a more "balanced" go-to-market strategy that includes more involvement with non-OEM resellers.
"I am advocating and moving very quickly for a much more balanced strategy in terms of how we reach out to customers," McHugh says. "We need to be exceptional at the reseller channel. We have to put more wood behind that arrow. We haven't gotten as much traction or put as much emphasis on the reseller channel specifically as we should have."
McHugh is a 20-plus year veteran of HP ProCurve, which relied heavily on resellers for sales of its low-cost networking products. The reseller channel offers "efficiency and frictionless engagement" with customers, but it alone will not get the job done, McHugh stresses.
"That has always been a stated intent of Brocade's -- to do (reseller and OEM) in parallel," he says.
Brocade has two high-profile OEMs for its Foundry gear in IBM and Dell. But those channels have yet to ramp.
McHugh says Brocade is still committed to those OEMs, and vice versa, and that a progress report on those specific arrangements may come next week. In the meantime, Brocade and its watchers await the fruits of those engagements.
"We continue to believe that strategy is an appropriate strategy and we want it to be successful," McHugh says. "We're not backing away from that. Until we understand that it is absolutely unworkable or we fix it, we're going to keep diligently going after it. We're optimistic that it will be a successful part of our ecosystem."
The channels are key to Brocade's next-generation data center convergence strategy but perhaps not as vital as its installed base of FibreChannel storage-area networks (SAN). Brocade is far and away the market leader in that space, with 64% of the $843 million modular SAN switch market in 2009, compared to Cisco's 35.7% share, according to Dell'Oro Group.
With that beachhead, Brocade is emphasizing the stability and reliability of storage networks for converged FibreChannel/Ethernet data center architectures, while others play up the benefits of Ethernet as the convergence carrot.
"Most of the solutions that I see being proposed for customers… are nowhere near that level of [storage] reliability," McHugh says. "To me, that's a giant red flag that is technology driven, not customer value driven. At Brocade, you're going to see …a way to start very cautiously and very thoughtfully enabling new capabilities as your SAN becomes much more part of an integrated network strategy in your data center; not how do we infest the SAN with as many weird foreign objects as possible and expect it to continue to operate correctly."