The market ended 2002 on a high note, as quarterly sales increased 5 percent quarter-over-quarter to a record $263 million in the fourth quarter, according to Dell'Oro. This momentum is expected to continue through 2003 with more growth at the low- to mid-end of the market. "It will be interesting to see how Brocade's 3900 [32-port switch] ramps in 2003," says Barnello (see Brocade Preps 32-Port Push).
Brocade held on to its lead, with 58 percent market share, and increased revenue by 19 percent, to $551 million, compared with the previous year, according to the report. It's worth noting Vixel Corp. (Nasdaq: VIXL) and Gadzoox Networks Inc. (OTC: ZOOX) together totaled less than 3 percent of the total market (see Broadcom Gulps Gadzoox).
Table 1: SAN Switch Leaders
| Company | 2002 FC Switch Sales | Market Share | Y/Y Revenue Growth |
| Brocade | $551 million | 58% | 19% |
| McData | $279 million | 29% | 1% |
| Inrange | $57 million | 6% | 35% |
| Source: Dell'Oro Group | |||
One major consideration the Dell'Oro report does not take into account is how Cisco Systems Inc.'s (Nasdaq: CSCO) entrance into the market will affect the status quo. Dell'Oro says it concentrates on the past and the present rather than speculating on the future. Baranello declined to make any comments on Cisco.
To us, that's like ignoring the elephant in the room -- particularly when Cisco already appears to be destabilizing the incumbent players. Wall Street analysts bombarded Brocade on its recent earnings call with questions about how it plans to defend itself against the networking giant (see Brocade Puts Up Q1 Loss).
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