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Segment Information
 12 Months Ended
Oct. 29, 2016
Segment Reporting [Abstract]  
Segment Information
Segment Information
Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. Financial decisions and the allocation of resources are based on the information from the Company’s internal management reporting system. Currently, the Company’s CODM is its Chief Executive Officer.
Brocade is organized into three operating segments, each of which is an individually reportable segment: SAN Products, IP Networking Products, and Global Services. These reportable segments are organized principally by product category. The results of the Ruckus business are included in the IP Networking Products and Global Services reportable segments from the date of acquisition.
The types of products and services from which each reportable segment derives its revenues are as follows:
•
SAN Products include infrastructure products and solutions that help customers develop and deploy storage and server consolidation, disaster recovery, and data security, as well as meet compliance requirements regarding data management. These products are used to build storage area networks and are generally used in conjunction with servers and storage subsystems, SAN interconnection components, and server and storage management software applications and tools. Brocade’s family of Fibre Channel (“FC”) SAN backbones, directors, and fabric/embedded switches provide interconnection, bandwidth, and high-speed switching between servers and storage devices. Switches and directors support key applications such as data backup, remote mirroring, and high-availability clustering, as well as high-volume transaction processing applications such as enterprise resource planning and data warehousing. Additionally, Brocade offers a variety of FC fabric extension, analytics, switching, and routing solutions;
•
IP Networking Products include Layer 2 and Layer 3 Ethernet switches and routers that are designed to connect users over private and public networks, including local area, metro, and within and across global data centers. Brocade also offers converged network products, and a portfolio of related software and hardware-based data networking offerings. Additionally, the Company offers Layer 4-7 products that are designed for application traffic management and server load balancing. With the acquisition of Ruckus, Brocade also offers a comprehensive range of wireless products for the network edge; and
•
Global Services include break/fix maintenance, installation, consulting, network management and software maintenance, and post-contract customer support revenue.
At this time, the Company does not track its operating expenses by operating segments because management does not consider this information in its measurement of the performance of the operating segments. The Company also does not track all of its assets by operating segments. The majority of the Company’s assets as of October 29, 2016, and October 31, 2015, were attributable to its U.S. operations.
Summarized financial information by reportable segment for the fiscal years ended October 29, 2016, October 31, 2015, and November 1, 2014, based on the internal management reporting system, is as follows (in thousands):
 
SAN Products
 
IP Networking
Products
 
Global Services
 
Total
Fiscal year ended October 29, 2016
 
 
 
 
 
 
 
Net revenues
$
1,229,184

 
$
730,412

 
$
386,014

 
$
2,345,610

Cost of revenues
295,100

 
362,061

 
172,110

 
829,271

Gross margin
$
934,084

 
$
368,351

 
$
213,904

 
$
1,516,339

Fiscal year ended October 31, 2015
 
 
 
 
 
 
 
Net revenues
$
1,301,231

 
$
601,170

 
$
361,059

 
$
2,263,460

Cost of revenues
311,881

 
275,634

 
147,872

 
735,387

Gross margin
$
989,350

 
$
325,536

 
$
213,187

 
$
1,528,073

Fiscal year ended November 1, 2014
 
 
 
 
 
 
 
Net revenues
$
1,326,950

 
$
525,237

 
$
359,080

 
$
2,211,267

Cost of revenues
344,466

 
247,975

 
153,033

 
745,474

Gross margin
$
982,484

 
$
277,262

 
$
206,047

 
$
1,465,793


Revenues are attributed to geographic areas based on where the Company’s products are shipped. Geographic revenue and property and equipment information for the fiscal years ended October 29, 2016, October 31, 2015, and November 1, 2014 is presented below (in thousands):
 
Fiscal Year Ended
 
October 29,
2016
 
October 31,
2015
 
November 1,
2014
Net revenues:
 
 
 
 
 
United States
$
1,202,792

 
$
1,275,056

 
$
1,286,650

International
 
 
 
 
 
Europe, the Middle East and Africa (1)
676,685

 
610,133

 
598,196

Asia Pacific
318,758

 
229,903

 
183,035

Japan
100,034

 
93,470

 
91,062

Canada, Central and South America
47,341

 
54,898

 
52,324

Total international net revenues
1,142,818

 
988,404

 
924,617

Total net revenues
$
2,345,610

 
$
2,263,460

 
$
2,211,267

(1) 
Includes net revenues of $336.1 million, $400.0 million, and $385.2 million for the fiscal years ended October 29, 2016, October 31, 2015, and November 1, 2014, respectively, relating to the Netherlands.
 
October 29,
2016
 
October 31,
2015
 
November 1,
2014
Property and equipment, net:
 
 
 
 
 
United States
$
418,804

 
$
409,404

 
$
426,941

International
36,522

 
29,820

 
18,492

Property and equipment, net
$
455,326

 
$
439,224

 
$
445,433