PeakColo partner Brocade is one of the leading providers of data and storage networking services and solutions. They have been one of the chief players in the software defined networking (SDN) market, which enables the abstraction of hardware and IT data management assets. SDN is a fundamental component in IaaS clouds, and many industry leaders have touted it as a vital part of next-generation computing and connectivity. Brocade's recently released quarterly financial results indicate a positive outlook for sustained market potential and a vote of confidence for the innovative capacity of enterprise SDN solutions.
According to the California-based company, their third 2013 fiscal quarter, which closed on July 27, generated $536.6 million in revenue. While third quarter revenue dipped slightly from 2012 levels, both GAAP diluted earnings per share (EPS) and non-GAAP diluted EPS rose, to $0.26 and $0.19, respectively. Some revenue streams also took a small hit in the quarter, as deals with government agencies were pushed off due to heavy budget cuts at the federal level. Additionally, the last few quarters have seen an overall dip in the industry as several markets have matured and economic conditions have hindered some organizations from investing more aggressively in cloud and storage solutions. Ultimately, their third quarter revenue surpassed analysts' estimates, and Brocade officials reported that they were pleased with the company's performance in the quarter.
"In Q3, Brocade exceeded our guidance for revenue, non-GAAP operating margin, non-GAAP EPS, and cash flow," stated Brocade CEO Lloyd Carney. "The storage market is recovering more quickly than we had anticipated entering our third quarter and, coupled with continued strong adoption of Gen 5 Fiber Channel, contributed to good Storage Area Networking (SAN) revenue results."
IaaS cloud demand driving SDN growth
Brocade reported that they are already looking ahead to maximize market growth in the current quarter, according to Reuters. The company, whose shares increased 18 percent in after-market trading, predicted revenue from storage area networking (SAN) services to increase 1 to 4 percent in the fourth fiscal quarter of 2013. Bolstered by a rebound in the overall storage market, the company expects its services, which enable companies to better utilize enterprise IaaS clouds for storage and networking, to continue growing.
The company is also looking to expand its SDN footprint. An updated version of its SDN offering will allow enterprise cloud users to rely less on hardware for data management, according to Investor's Business Daily. In the attempt to deliver even more scalability and agility to users, the next generation of enterprise-class cloud computing solutions providers are eliminating as much hardware from their models as they can. SDN facilitates automated configuration of key data management processes, relieving IT personnel of the need to operate and oversee these systems manually. Overall, the leaders in SDN, like Brocade, understand that enterprises are seeking to deploy these solutions as fast as possible, and are leveraging their solutions for optimal functionality in demanding business-IT environments.
"The race here is a grab for market share," stated Kelly Herrell, general manager of Brocade's software business unit, according to the news source.