The Fall of Fibre Channel: Page 14 of 16

Unfortunately, this hasn’t resulted in Brocade winning the race to ship a 2-Gbit/s switch – both Vixel Corp. (Nasdaq: VIXL) and QLogic have beat it to the punch (see Vixel Ships 2-Gig Switches and QLogic Ships 2-Gig FC Switch). QLogic
represents an especially big problem, because it OEMs its 2-gig hardware to
other equipment manufacturers, spawning multiple new competitors for
Brocade. McData Corp. (Nasdaq: MCDT) is also stepping up the pressure, making inroads with Compaq, one of Brocade's key OEMs (see Compaq Markets McData).

Add to this laggard behavior the – admittedly, unconfirmed – rumors that Brocade
has run into problems getting the security and zoning codes to work on its
new, larger 12000 switch, and if I were a Brocade shareholder I’d probably
be wanting to know where all that R&D money is going. (Perhaps Brocade
hired someone from NASA or some other federal agency to run its R&D

department. Who knows?)

Brocade’s pricing strategy for its new products also leaves something to be
desired. Instead of choosing to cut its competitors’ strings by pricing its
product at the low end, it’s made the classic monopolist’s decision to try
to milk even more out of its market dominance. Sure, Brocade’s new 2-Gbit/s
switch only costs around 15 percent more than its 1-Gbit/s products, but it’s twice the price of some of its competitors’ 2-Gbit/s equipment.

But the part of Brocade’s approach to the 2-Gbit/s market that really gets my
goat (and I think we all know how painful that can be!) is its attitude to product testing.

As it happens, Byte and Switch has spent the last six months
organizing the world’s first multivendor test of 2-Gbit/s equipment. Two
vendors took the challenge, and their names shall be revealed when we
publish the test in December. Suffice it to say that Brocade is not one of
them. And it’s come up with some priceless excuses for not taking
part (see Is Brocade's SilkWorm Losing the Thread? and Brocade Ponders 2-Gbit/s Test).