Brocade Unveils Subscription Model Expansion, Including

SAN JOSE, CA--(Marketwired - May 15, 2013) - With almost 70 percent of organizations selecting vendors based on the availability of leasing/financing solutions offered ¹ , Brocade ( NASDAQ : BRCD ) today announced the expansion of its unique subscription financing model with the launch of Brocade ^® Subscription Plus. Enabling Brocade partners to offer financing on a complete customer purchase -- including all services, support and third-party equipment -- Brocade Subscription Plus gives customers the flexibility to choose the right balance of risk and capitalization, while simplifying financial management through one contract and one monthly payment.

Unveiled at Brocade Partner Summit 2013, Brocade Subscription Plus offers a fully customizable solution combining the no-risk flexibility of Brocade Network Subscription -- offering Brocade networking equipment on a monthly subscription basis where capacity can be increased or decreased as required* -- with the operating efficiency of a fixed term lease on third-party services and solutions. This model offers Brocade channel partners significant opportunities for revenue growth and net-new customer acquisition, with financed deals proving four times larger than cash deals on average, and offering a repeat business rate of more than 80 percent. 

"The number one priority for CIOs in 2013 is 'to focus the IT organization more on business strategy than IT strategy.' By providing 'capacity-as-a-service' the Brocade Subscription Plus financing model provides additional flexibility to support business-strategic imperatives, anticipating future market direction and providing a viable option for IT portfolio managers to match acquisition to business strategy and financial requirements," said Joseph C. Pucciarelli, Vice President and IT Executive Advisor at IDC. 

Broadest Choice of Vendor Financing Options Increases Channel Partner Opportunity Brocade has one of the industry's broadest financing portfolios available, giving channel partners and their customers a wide range of acquisition options. In addition to purchase, Brocade Capital Leasing offers financing on Brocade hardware and software over terms of up to 60 months. Customers can then choose to purchase or refresh their network environment at the end of the period.

Brocade Network Subscription is the most flexible financing model available today, giving customers the ability to pay for Brocade networking solutions on a monthly subscription basis, while being able to increase or decrease the number of installed ports or even cancel the agreement with 60 days' notice without penalty. Upgrades and migration are included to future-proof the network during the duration of the contract.

Brocade Subscription Plus now brings all these options together under one umbrella, enabling customers to create a tailored financing package that aligns capacity requirements and business requirements with financial choice to manage risk, Return on Assets (ROA) and Return On Invested Capital (ROIC). The first end-to-end financing solution in the marketplace, Brocade Subscription Plus enables customers to acquire all the elements within a given project -- including Brocade and third-party hardware and peripherals, support, services, software and training -- under a single contract on a monthly payment basis. The single-source acquisition model helps customers align payment schedules and budget strategy, improve financial planning and better balance CapEx and OpEx according to business requirements. The solution remains highly scalable, with an option to build technology refreshes into the contract.

"Offering customers the flexibility in financing that Brocade Subscription delivers, which creates a path for growth while enabling them to access the latest innovations and ensure their infrastructure can respond to changing business demands, is a fantastic differentiator for us. It enables us to help resolve many of the budgetary challenges customers are facing, and provide a level of support and engagement that goes beyond the purely technical, so we are trusted advisors in every sense of the term. It is something that really helps open doors and start new, positive engagements," said Alex Cruz Farmer, managing director at Netsumo Limited.

"Our customers increasingly want simplified, predictable expenditure when it comes to their technology refreshes. With its ability to reduce CAPEX and move to OPEX, Brocade Networks Subscription fits very well with those goals. However as an end to end managed service provider our solutions normally encompass many technology areas, so Brocade Network Subscription Plus will offer significant benefits to us in building complete solutions -- in turn allowing our customers in meeting their business objectives while managing their capital expenditure," said Fraser Fisher, COO at Redcentric Plc.

"The biggest challenges for our business are ensuring we can scale our cloud infrastructure at a rate determined by demand, while maintaining the adoption of cutting-edge innovation. We are dedicated to delivering the best service, while maintaining our long-term business strategy and financial flexibility. Commercially we need to provide on-demand cloud services to customers who want instant increases, with the same Service Levels Agreements. The Brocade Subscription model provides us with the financial flexibility we need to manage our investments and scale to meet our channel partners' ever-changing requirements," explained Luke Norris, CEO and Founder, PeakColo.

"It is important to our business strategy that our infrastructure is always able to support the business requirement and meet our customers' demands, no matter how much or how quickly that may change, but at the same time we need the financial flexibility to be able to balance this with our budget strategy and long-term plans. With Brocade Subscription we can continue to access the latest technology, and manage our expenditure and plan our investments at a pace and scale that helps us grow our business while reducing financial complexity," explained Berry van Waayenburg, General Manager at TechAccess.

"Brocade Network Subscription has many customers and partners signed up worldwide, with Brocade partners securing revenues off of Network Subscription transactions," said Regan McGrath, vice president of Worldwide Channel Sales and Marketing at Brocade. 

McGrath continued, "Based on partner and customer feedback, there has been a great demand to bundle all deal elements under one financial agreement, while maintaining the flexibility and simplicity Brocade Network Subscription offered. We are pleased to be able to provide this additional financing option with the launch of Brocade Subscription Plus."

Brocade Subscription Plus deals are included within Brocade Alliance Partner Network programs and incentives, including Brocade Rewards, Marketing Development Funding, Value Incentive Programs and Deal Registration, and will count towards Brocade partner growth revenue targets.

Availability and Additional Information Brocade Subscription Plus is initially being made available to customers in the United States, Canada, UK and Germany through Brocade Alliance Partner Network channel partners. The lease and subscription options are enabled by the Brocade-owned financing arm, Brocade Capital Solutions.

• IDC White Paper, sponsored by Brocade, - Brocade Network Subscription: Two Years after Product Launch - customer experiences, April 2013: http://www.brocade.com/downloads/documents/wh...nch-wp.pdf
• Brocade Capital Solutions: www.Brocade.com/SubscriptionPlus
• Brocade Network Subscription: www.NoNetworkCapEX.com
• Brocade Alliance Partner Network: www.brocade.com/apn

Source:

^1.  IDC IT Buyer Perceptions, Strategies and Requirements: Results of IDC's 2012 IT Leasing and Financing Survey, doc #235277, June 2012.

* Return is strictly 60-days without penalty, upgrade or expand at any time

About Brocade Brocade ( NASDAQ : BRCD ) networking solutions help the world's leading organizations transition smoothly to a world where applications and information reside anywhere. ( www.brocade.com )

About Peak: PeakColo is an enterprise-class Infrastructure-as-a-Service (IaaS) cloud service provider to channel partners. White-labeling PeakColo's cloud services as their own, resellers and agents rapidly enter the cloud marketplace under their own brand without capital expenditure, enjoying a faster route to profitability. With Type II SSAE 16 and SOC 1 & 2 compliant data centers in six geographies across the United States and in Europe (Seattle, Denver, Chicago, New Jersey, New York, and the United Kingdom), PeakColo offers a cloud environment that contains tens of thousands of virtual machines and multiple petabytes of storage for public, private, hybrid and disaster recovery solutions. PeakColo is VMware vCloud ^® Powered and is a Platinum-level NetApp service provider.

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