Segment Information

12 Months Ended

Oct. 29, 2011

Segment Information [Abstract]

Segment Information

16. Segment Information

Operating segments are defined as components of an enterprise about 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. Currently, the CODM is the Chief Executive Officer.

Brocade is organized into four operating segments, of which two are individually reportable segments: Data Storage Products and Global Services; and the two other operating segments, Ethernet Switching & Internet Protocol Routing and Application Delivery Products ("ADP"), combine to form a third reportable segment: Ethernet Products. These segments are organized principally by product category. The types of products and services from which each reportable segment derives its revenues are as follows:

• Data Storage Products include infrastructure products and solutions that assist customers in the development and delivery of storage and server consolidation, disaster recovery and data security, and in meeting compliance issues regarding data management. These products are used to build storage area networks ("SAN"s) and are generally used in conjunction with servers and storage subsystems, SAN interconnection components such as host bus adapters ("HBAs"), and server and storage management software applications and tools. Brocade's family of Fibre Channel ("FC") SAN backbones, directors, fabric and embedded switches provide interconnections, bandwidth and high-speed routing of data between servers and storage devices. Switches and directors support 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. Brocade's storage networking products also include HBAs, which connect host computers to a FC network. Additionally, Brocade offers a variety of fabric extension, switching and routing solutions;

• Ethernet Products include Open System Interconnection Reference Model ("OSI") Layer 2 and Layer 3 switches and routers that are designed to connect users in an enterprise network, enabling network connectivity such as access to the Internet, network-based communications, and collaboration through unified messaging applications and mobility. Brocade also offers converged network products, and a portfolio of platforms designed for service provider environments as well as carrier Ethernet products. Additionally, the Company offers OSI Layer 4—7 solutions that are designed for application traffic management and server load balancing; and

• Global Services include break/fix maintenance, extended warranty, installation, consulting, network management and software maintenance and customer support revenue.

Financial decisions and the allocation of resources are based on the information from the Company's internal management reporting system. At this point in time, the Company does not track all of its assets by operating segments. The majority of the Company's assets as of October 29, 2011, October 30, 2010 and October 31, 2009 were attributable to its United States operations.

Summarized financial information by reportable segment for the years ended October 29, 2011, October 30, 2010 and October 31, 2009, based on the internal management reporting system, is as follows (in thousands):

	Data Storage Products		Ethernet Products		Global Services		Total
Fiscal year ended October 29, 2011
Net revenues	$	1,237,994	$	551,820	$	357,628	$	2,147,442
Cost of revenues (1)		356,013		321,183		186,712		863,908
Gross margin	$	881,981	$	230,637	$	170,916	$	1,283,534
Fiscal year ended October 30, 2010
Net revenues	$	1,240,626	$	488,188	$	362,339	$	2,091,153
Cost of revenues (1)		394,506		288,980		176,547		860,033
Gross margin	$	846,120	$	199,208	$	185,792	$	1,231,120
Fiscal year ended October 31, 2009
Net revenues	$	1,188,527	$	424,434	$	337,415	$	1,950,376
Cost of revenues (1)		467,496		271,858		180,072		919,426
Gross margin	$	721,031	$	152,576	$	157,343	$	1,030,950

(1) Fiscal years 2011 and 2010 reflect the classification of system engineer costs within sales and marketing expenses as opposed to cost of revenues in prior periods. Fiscal year 2009 has not been updated for the new cost classification implemented in 2010. See Note 1, "Basis of Presentation," of the Notes to Consolidated Financial Statements.

Revenues are attributed to geographic areas based on where the Company's products are shipped. Geographic information for the years ended October 29, 2011, October 30, 2010 and October 31, 2009 is presented below (in thousands):

	Fiscal Year Ended
	October 29, 2011		October 30, 2010		October 31, 2009
Net revenues:
United States	$	1,313,302	$	1,338,262	$	1,266,844
International
Europe, the Middle East and Africa (1)		502,999		482,707		450,159
Asia Pacific		212,636		173,243		141,511
Japan		75,542		58,914		59,771
Canada, Central and South America		42,963		38,027		32,091
Total international net revenues		834,140		752,891		683,532
Total net revenues	$	2,147,442	$	2,091,153	$	1,950,376

(1) Includes net revenues of $257.5 million, $254.4 million and $177.0 million for the years ended October 29, 2011, October 30, 2010 and October 31, 2009, respectively, relating to the Netherlands.

	Fiscal Year Ended
	October 29, 2011		October 30, 2010		October 31, 2009
Property and equipment, net:
United States	$	515,940	$	524,287	$	427,010
International		16,444		14,830		15,398
Total Property and equipment, net	$	532,384	$	539,117	$	442,408