The Fibre Channel SAN switch market is indeed a topsy-turvy place.
An Infonetics Research Inc. report out this week not only halves the research firm's two-year revenue forecast for the space, but also shows Brocade Communications Systems Inc. (Nasdaq: BRCD), McData Corp. (Nasdaq: MCDTA), and Cisco Systems Inc. (Nasdaq: CSCO) competing aggressively for market share (see Infonetics: Brocade Still Tops in FC).
The report estimates that revenue in this space topped $522 million in the first half of 2003 and will reach $1.1 billion by the end of this year. But while that's a 22 percent jump over the first half of 2002, according to Infonetics, the firm had been expecting revenues in the first half of this year to reach $757.4 million (see Infonetics: 2-Gig FC 90% of Market).
Perhaps even more worrying for the Fibre Channel switch market is that Infonetics now expects revenues in the space to grow to $1.6 billion by 2005. While that may sound like impressive growth in a continued depressed market, it's a far cry from the firms expectations only six months ago. In February, Infonetics forecast Fibre Channel SAN switch revenues would reach $3.3 billion by the end of 2005.
Infonetics analyst Neil Osipuk, the author of the report, says he drastically revised his outlook after end-user research revealed that large enterprises were anticipating far fewer large-scale SAN deployments over the next couple of years than earlier studies indicated. The large enterprises want to get more out of their investments in the SANs theyve already deployed, he says. The main growth will be in the midtier. (See Report: Midmarket Moving to SANs.)
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