The bigger they are, the harder they fall.
Today, Brocade Communications Systems
Brocade shares jumped as much as 8.3% on the news. That's a lot of candy.
Reflecting Brocade's newfound appeal to large data centers, customers who represent 10% or more of total sales added up to 53% of revenue this quarter. That's up from 47% last quarter and 44% a year ago. This elite group includes reseller partners IBM
I'm not alone in viewing the networking sector in this light. Gleacher & Co analyst Brian Marshall agrees when he reiterates a "buy" rating on Brocade. Marshall notes that Cisco's entry into the server market has distanced the company from former partners such as HP and IBM: "No longer will the de facto move be to design in Cisco Catalyst switches when constructing new data center designs; rather, companies will partner with vendors that present less of a threat to the core computing business (i.e., Brocade)."
It may take years to wean the IT industry off Cisco switches, but every point of market share Cisco loses in this $35 billion market is a huge opportunity for smaller players like Brocade.
And there's more to the story. Click here to find out all about the broadband networking stock we called out as the top stock for 2011. There's a good chance you haven't heard of this obscure business, even as its products probably play a part in your everyday life already. This special report is 100% free, very detailed, and likely to open your eyes to a new opportunity.
Fool contributor Anders Bylund holds no position in any ticker mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of International Business Machines and EMC. The Fool has created a bull call spread position on Cisco Systems. Motley Fool newsletter services have recommended Cisco Systems. Motley Fool newsletter services have recommended a short position in Juniper Networks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.