INDUSTRY

Recent Reports Show Market Leadership and Growth in All SAN Segments - Directors, Switches, and Bladed Server Modules - Brocade Communications Systems continues to grow its leadership position across the major categories of the Storage Area Network (SAN) infrastructure connectivity market, according to recent reports from three industry research firms that track and analyze SAN shipments and market trends. Overall SAN Market Leader In their most recent SAN market report dated June 1, 2006, networking market research firm Dell'Oro Group reported that Brocade extended its share of the overall SAN connectivity market from 52.4 percent to 56.0 percent. More specifically, Dell'Oro estimated Brocade's revenue share of the next-generation 4 Gbit/sec market to be 83.1 percent. Brocade is the only provider of a full line of compatible and interoperable 4 Gbit/sec technology products ranging from embedded blade server modules and entry-level 8-port SAN switches to high-performance 256-port directors. The company recently expanded its industry-leading family of SilkWorm products with the industry's first 4 Gbit/sec 64-port SAN switch (the SilkWorm 4900) and new SAN routing solutions that feature iSCSI and FC-IP implementations to extend SAN connectivity. Most Directors Sold, Market Share Growth In their most recent report dated June 1, 2006, Dell'Oro Group further noted that, for the second consecutive quarter, Brocade ranked number one among all vendors in directors sold, with a share of 36.5 percent (up 2.4 percent from the prior quarter and 6.6 percent from the prior year). This finding underscores the rapid market acceptance of the Brocade SilkWorm 48000 Director, which has allowed Brocade to take a performance leadership position in both open systems (Fibre Channel) and mainframe (FICON) connectivity solutions. The SilkWorm 48000 leads the industry in power and cooling efficiency and in Fibre Channel over Internet Protocol (FCIP) performance with its available SilkWorm FR4-18i blade. Extended Leadership in the Midrange Segment In its most recent quarter, Brocade reported record sales for its switching product line. In its report of June 7, 2006, technology market research firm Gartner estimated that Brocade gained 3.3 points of market share sequentially, in the midrange switching segment, to 64 percent. Brocade switches include the SilkWorm 200E, SilkWorm 4100, and the SilkWorm 4900. These three products feature "Ports on Demand" capabilities, enabling customers to scale from 8 ports to 64 ports among the various products in the switch family. Strong Growth in SAN Modules for Bladed Servers According to an April 2006 report from IT market research firm IDC, bladed servers from the leading server manufacturers are maintaining their role as a growth driver in the overall server market. In 2005, worldwide unit shipments of bladed servers increased 63.6 percent, and spending for this sector increased to over 80 percent. Brocade's recent record quarter for SAN bladed server modules has also vaulted the company into a leadership position in this rapidly growing category. Brocade currently maintains a market leadership position in this segment with a full range of SAN switch modules for use with bladed servers from all major industry OEMs. "Enterprise IT users of all types are evolving their IT infrastructures as they strive to condense their data centers, control costs, improve service levels, and enhance business agility. IDC believes that the next-generation data centers that emerge will include bladed systems and virtualization technologies designed to meet the core business needs of the twenty-first century," said Matt Eastwood, Vice President, Enterprise Server Research for IDC. In other related news this week, Brocade announced that it is providing a new embedded SAN switch module for the next-generation HP BladeSystem c-Class and the Fujitsu Siemens Computers PRIMERGY BX600 blade server.