Posted by: Shamus McGillicuddy
Brocade, Dell, Foundry, HP ProCurve, IBM, mergers & acquisitions, Networking, nortel, Storage
Network Computing blogger Howard Marks made some good points recently about why Brocade has struggled to sell the Ethernet networking product line it acquired from Foundry back in the summer of 2008. As Marks points out, Brocade tried to sell sell Foundry products in the same way it has traditionally sold its storage networking products: via OEM agreements with big server and storage vendors like IBM and Dell. But networking pros aren’t much interested in buying networking products from server vendors. They prefer going with someone they know, such as Cisco, ProCurve or… Foundry.
Wall Street has been displeased with Brocade’s Foundry results so far. As Munjal Shah, analyst with Jefferies and Stifel Nicolaus told the Wall Street Journal:
Brocade is facing challenges in integrating the Ethernet [business] as the sales model is different and Ethernet [original equipment manufacturers sales] are slow to materialize. Brocade has solid position in data center and relative valuation is low, but we believe it will take some time to resolve the execution issues.
Brocade has responded by appointing John McHugh as its new chief marketing officer. McHugh is a veteran of HP, where he is credited with starting up the ProCurve division. More recently McHugh was the head of Nortel’s enterprise solutions business. No surprise that he’s jumping ship after the Avaya acquisition. Burnishing the Foundry business appears to be a nice challenge for him.
Marks says Brocade also got away from what made Foundry a modest success in a crowded networking market: good support from sales engineers. Brocade tried to monetize those resources by turning what used to be free support into professional services. This alienated existing customers, apparently. Now Marks says he’s hearing from internal sources that Brocade is going back to the old Foundry approach, which should help it win over some new customers and perhaps retain some existing ones.