Features - Enterprise Data Insights:

Fibre Channel SAN MARKET: GROWTH TO EXCEED 30 PERCENT

Worldwide FibreChannel SAN interconnection hardware revenue topped $522 million in the first half of 2003 and will reach $1.1 billion by the end of the year, representing a 22 percent growth from 2002, according to Infonetics Research's worldwide market share and forecast service, SAN Interconnection Hardware. Revenue is projected to grow 31 percent to $682 million between the first half of 2003 and the first half of 2004, and the total FibreChannel worldwide market is expected to reach $1.6 billion by 2005.

"Competition between Brocade and McDATA is intense in the FibreChannel segment of the market, and the intensity has increased with the emergence of Cisco on the storage networking front," said Neil Osipuk, lead analyst of the report. "Some smaller vendors have not been able to survive in this cut-throat environment. Cisco's entrance into the market has been felt most acutely by incumbents Brocade and McDATA, though Brocade has borne the brunt of Cisco's competition so far. In the coming quarters, Cisco will be licking their chops over McDATA's happy meal."

"Despite the fierce competition, Brocade is still number-one in the 2G FibreChannel market, but their revenue and port market share declined in the past year after being squeezed from above by Cisco's new high-end FibreChannel SAN switch products and from below by McDATA's mid-market FibreChannel SAN switch product."

1H03 Market Highlights

• Total FibreChannel ports increased 35 percent from the second half of 2002 to the first half of 2003, and total FibreChannel revenue increased 1 percent; strong growth for ports and revenue is projected from 2003 to 2005.
• Brocade is the revenue- and port-leading vendor for 2G FibreChannel, with 40 percent revenue market share and 49 percent port market share.
• McDATA is a strong competitor in the 2G FibreChannel space, having increased their revenue market share to 33 percent and maintained their port market share at 25 percent.
• North America is expected to decrease its revenue share among the geographic regions to 55 percent by 2005, with EMEA increasing to 32 percent and Asia Pacific to 12 percent; the incumbent FibreChannel vendors have focused the majority of their sales in North America over the past several years, resulting in higher adoption rates for SANs and an installed base of 1G FibreChannel ports that will need to be replaced over the next several years.

The SAN Interconnection Hardware market share and forecast report tracks 1G and 2G FibreChannel SAN hardware, and includes market size and forecasts for additional network protocols such as iSCSI, Gigabit Ethernet and DWDM. Companies tracked in this service include Brocade, Cisco, Inrange, McDATA, Nishan Systems, QLogic, Vixel and others.

For sales and to view the table of contents of this report, please contact Larry Howard, vice president, at larry@infonetics.com or (408)298-7999 ext.225.