Cisco lost a huge amount of market share in SANs in the first quarter, according to Dell’Oro Group, and it may be due to its entry into the blade server market. Cisco lost almost 10 percentage points in overall SAN market share in Q1 while Brocade, its SAN rival, gained 14 percentage points in modular switches and almost four in fixed.
Dell’Oro states in its Q1 SAN report that Brocade’s and Cisco’s results “stem from both product and business issues. Brocade has a more advanced FibreChannel product and is likely benefitting from Cisco’s channel conflict.”
That channel conflict, as anyone might guess, stems from Cisco’s decision to develop and sell data center blade servers to compete with those from IBM and HP. Together, these titans contributed roughly $2 billion annually to Cisco by marketing Cisco’s networking gear as complements to their own IT equipment.
But now that Cisco is encroaching on the sacred blade server turf of IBM and HP, those channels are being shut down and Brocade is benefitting. IBM and HP are both OEMs of Brocade’s FibreChannel switches and IBM just inked an OEM agreement for Brocade’s Foundry switches. HP is expected by some to do the same.
Looks like Cisco is feeling it first in the SAN market.
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