McData executives say Cisco is a bigger threat to their company because it is the share leader in the director switch market, while Brocade dominates the midrange and low end (see Brocade & McData's Paths Diverge).
Pricing pressure caused by Ciscos entry has hit the high end harder. While McData and Brocade both had layoffs this month, McDatas was much larger in scope (see McData McDownsized and Brocade Shaves Heads). McData cut 92 employees, roughly 9 percent of its staff; while Brocade laid off 25 hardware engineers, less than 2 percent. Brocades headcount of around 1,230 is up around 30 from when it laid off 115 employees last April.
Brocade seemed to avoid the pricing pressures last quarter. Its gross margin rose slightly to 54.9 percent from 54.6 percent in the previous quarter. Reyes referred to "more stable pricing" during the call.
McData reports quarterly earnings on February 26.
Brocade's earnings report was rosier than last quarter, when it failed to meet expectations after McData and Cisco stumbled. At that time, Brocade also forecast the second quarter of 2004 to be flat with the first because of expenses associated with a series of product rollouts in April (see Did Brocade Blow an Opportunity?).
To realize the benefits of cloud-native software, an application must actually be cloud-native—designed to run in the cloud, interacting with disaggregated cloud services, fully manageable as code—to deliver the expected benefits.
By combining resources and expertise, the AI-Enabled ICT Workforce Consortium will offer a blueprint for how industries can adapt to an AI-dominated future.
IT leaders should heed the guidance of cybersecurity insurance providers who think businesses should prioritize security education, incident preparedness, regular internal audits, and ongoing vulnerability scanning and patching.
