We were lackadaisical and out of position. The competition took it to us, and was aiming at Brocade, Greg Reyes, Brocade CEO told ComputerWire. Brocade has been rumored to have been unsuccessfully looking for somebody to buy it, and its fiscal year ending last October posted a GAAP net loss of $136m on revenue down 7% at $525m.

Going into our financial year 2003 [ending last October] we had the wrong products on our roadmap. We sucked it all up, and cancelled our plans, he said.

During last year, the company launched only one major new product, which was a software upgrade that plugged important gaps for its flagship Silkworm 12000 director.

We hurt our business by teeing off against what the competition were doing, and not against what our customers wanted.

Now the company say it has shipped a wide range of new hardware to its OEM partners that will be qualified before the end of the quarter, and which it says will open new markets for the company, and – very importantly – reduce its manufacturing costs. Meaningful revenue growth from new products will occur in the second half of the year.

The only specific forecast the company gave was a repeat of its existing guidance for almost flat growth in its current second fiscal quarter ending in April.

The steep price declines of last year have slowed, at least according to Brocade. It admitted however that a 12% sequential increase in the number of ports it shipped in its last quarter came with a mid-single digit fall in prices.

As a whole, the pricing environment has been more stable, Reyes insisted. Per-port SAN switching prices fell by as much as 20% every six months last year, but Reyes said this was due to unprecedented competition in Brocade’s mid-range strong-hold, and not because of Cisco Systems Inc’s entry into the overall market. McData came out with a sixteen-port switch with an ASP 35% to 40% lower than ours, he said. Brocade responded by cutting its prices last summer. Some of the price decline follow-on was associated with program velocity from the mid-year, Reyes said.

Reyes confidently forecast a return to pricing falls of around 3% to 4% per quarter. We’re seeing competitors respond rationally in pricing, he said. The reasons behind the forecast were not clear however, as part of his explanation was a reference to blade switches. Brocade’s OEM partners will be the first vendors to ship such gear, later this quarter. The company’s only blade hardware at present is incorporated into Hewlett Packard Corp’s MSA1000, sales of which are approaching materiality Reyes said.

The new gear will include an unprecedented range of entry-level products, possibly a new version of the company’s flagship Silkworm 12000, the Rhapsody-developed Fabric Application Platform, and a new range of switches packaged as blades.

This article is based on material originally published by ComputerWire