16Gb FC Market Heats Up While SAN Revenue Cools Down

In a recently published SAN quarterly report by Dell’Oro Group, Inc., source for market information about the networking and telecommunications industries, FC switch and adapter revenues declined 10% to $594M in the first quarter 2013.

Cisco announced their new 16Gb FC director class switches, during a quarter that saw their lowest FC switch revenue since the second quarter of 2009. Sequential weakness was attributed to stalled sales as customers anticipated the release of the MDS switch platform. This product marked Cisco’s first new FC chassis since the MDS 9500 began shipping more than a decade ago.

With the release of the MDS 9710, Cisco will enter the 16Gb FC switch market a full seven quarters after Brocade.

"Brocade has been the only vendor shipping 16Gb, or Gen 5 FC, switches. The lack of new products in the ecosystem has resulted in a slower than expected migration, and I think we saw the impact of that this quarter," said Casey Quillin, senior analyst at Dell’Oro Group. "This announcement is very positive news for the market; competition is always good, and it sends the message that FC will not be going away anytime soon."

The report discusses the outlook for market migration to 16Gb FC, new product offerings, and analyzes how FCoE is affecting FC adapter revenues. Vendors currently offering FC switch and adapter offerings include: Brocade, Cisco, Emulex and QLogic.