Brocade to Open India Office

San Jose-based storage area network (SAN) infrastructure provider Brocade
Communications System claims 68% market share in the fabric switch market
and 29% of the director market worldwide. With over 50 global partners, Brocade
has been instrumental in SAN deployments in the Indian market. Greg Reyes,
chairman and CEO of Brocade spoke to Anurag Prasad on his India plans. Excerpts:

Brocade has been operating from Singapore. Any plans to have a permanent
office in India? 

We are setting up a 100% subsidiary in India. We are putting up a team on
the ground to help us and our partners adopt Brocade technology. But our model
would continue to be indirect. This is our global policy and all our business
would be done through our partners. The new team would help our customers and
partners understand and implement our technology better. So what ever was being
done from Singapore would now be carried out from India.

Have you set any timeframe for that? 

The organizational framework has already been set up. The team should be on
the ground by this year-end. As for their number, we are still in the process
and hopefully by this year we would be able to see the results.

There were reports last year of OEMs pressurizing vendors to bring down
the price. What has been your strategy to avoid such situations?

The strategy is to commoditize ourselves. We have been very aggressive in
centralizing all our manufacturing in China and getting certain aspects of our
software developed in India, and in driving to get maximum mileage for our
products. This makes Brocade products most cost competitive with maximum reuse.
As a result, we have been able to increase our revenues and our margins in a
very competitive pricing point of view. In the last six quarters the competition
has been very fierce and we have been able to increase our margin during these
quarters. We welcome the proliferation of technology as it decreases the cost
too.

How do you compare India with China? Which is the more lucrative market
for you?

SAN adoption in China and India are at par and it is more than any other
country. We have made significant inroads in these markets and have witnessed
excellent revenue growth in both these markets.

Any figure to the kind of investment you would be making in India? 

We cannot put a mathematical figure to our investments here. But it would be
in people and through our partners. We would be investing in technology labs in
STPI and NIC. We would be looking at more such managed relationships where it is

a win-win situation for both the parties. If the opportunities arise we would be
ready to take them on. So the area of investment is huge and diverse and we
cannot put a figure to it.

Outside the United States and sales marketing and support teams, we are
investing in software R&D and development only in India and manufacturing in
China. We are hoping to have a larger relationship with Wipro over time as
opposed to their competitors. We are trying to build a core team and
institutionalize our knowledge and learning instead of many factional teams. I
would not be surprised if we double our team, currently 100 people on contract,
at Wirpo during the next year.