Business as usual expected as former Foundry CFO takes over
The CFO of Brocade departed abruptly this week to “pursue other interests,” according to the company. Richard Deranleau, Brocade’s CFO for the past five years, left the company last Monday, June 20.
His replacement is Dan Fairfax, the former CFO of Foundry Networks, the switching company Brocade acquired in 2008. Analysts say the move won’t disrupt business as usual at Brocade, though it’s less likely now that the company is an acquisition target.
Recent reports had Dell again sizing up Brocade. This is still a possibility but now less likely, according to Nikos Theodosopoulos at UBS:
The CFO change, however, does suggest that recent press/analyst reports of the company being acquired is less likely in our view. While Dell could eventually decide to organically seek additional Ethernet Switch products, via acquisition BRCD is only one option they may consider, and Dell may remain content with existing OEM deals.
Theodosopoulos says the CFO change does not indicate a change in Brocade’s fundamentals either. Switching still hinges on a “snap-back” in federal spending and a gradual ramp of the new VDX line, he says. And the SAN business should benefit from a 16G upgrade cycle.
Longer term issues may still weigh, however:
(Brocade) longer term remains a bit challenged given a maturing SAN market and go to market hurdles in Switching given HP, Cisco and (Juniper) are more formidable in the Ethernet Switch market.
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