It is PGR’s view that BRCD has solidified its hold on the FC switch market and is maintaining solid margins in a macro environment favorable to Greenfield storage deployments.  Additionally, our network continues to report BRCD is picking up HBA share but the question remains: at who’s expense?

For different reasons, our network is positive on BRCD.  Here’s a summary:

1.)  All agree BRCD is really the only game in town in core switching products and margins are robust;

2.)  But the value of BRCD’s solid market position is offset somewhat by questions about the fundamental viability of the Fibre Channel market itself.  Many of our experts see lackluster growth over the next year, the result of better traction in FCoE;

3.)  Right now, our network does not think BRCD poses an immediate threat to QLGC or ELX in HBA but their position gives customers a look at how BRCD can work both sides of the equation.  The question remains whether BRCD can get enough out of HBA to drive switch sales.  The jury’s still out on that.

Clearly, storage is a key battlefield in the war for the data center.  And no clear victor can emerge from the likes of CSCO, HPQ or IBM until a major player focuses on the idiosyncrasies of areas such as SAN switching.  So, in the meantime, BRCD is secure in its role as a profiteer selling to both sides.

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