Brocade launches push for much-vaunted rental service

Vendor earns channel plaudits for subscription service that allows end users to pay for their networking infrastructure on a monthly basis

Brocade is gunning for rivals Cisco and Juniper as it launches a channel push for its Brocade Network Subscription (BNS) service.

Launched last November, BNS is being hailed by resellers as the first time a major hardware vendor has offered a genuine open-ended rental model that allows enterprises to align their networking capacity with usage.

There are no minimum terms and Brocade will collect the equipment at 60 days' notice if the customer decides they do not need it. It applies only to Brocade's IP products and there is a minimum order value of $200,000 (£127,000).

Marcus Jewell, UK and Ireland manager at Brocade, told ChannelWeb: "Instead of acquiring technology from us on a capital basis, the end user pays a monthly or quarterly charge. This is not a leasing package so we are not trying to make money out of financing."

Rackspace was unveiled as the first global BNS customer last year and since then Brocade has snared five UK enterprise customers, working in tandem with reseller partner Redstone and outsourcing goliath CSC. It expects to have 25 UK customers using BNS by the end of 2012.

Jewell said the vendor is looking to recruit two or three more top-level resellers for BNS. The vendor also wants referral partners, who would sell BNS on Brocade's paperwork and then earn a monthly fee.

"We are smaller than Cisco and wish to grow our IP business at an accelerated rate," said Jewell. "Sometimes, in a straight fight, it is hard to differentiate purely on technology and this is the big thing that sways it in our favour. A substantial amount of our business will be subscription over the next three to five years."

Jewell said the growth of cloud and virtualisation means the datacentre infrastructure Brocade provides needs to be increasingly more elastic, playing to BNS' sweet spot. "When you move from a client server to a virtual environment, it is very difficult to predict what your networking requirements are," said Jewell.

Due to the financial risk, Brocade will only accept top-level Elite partners as BNS resellers, and typically only those with revenue of more than £5m. It is currently in talks with Logicalis, as well as outsourcing giants Atos Origin and Fujitsu.

"[Reseller] partners must have a strong financial background, which you would not necessarily look at in a standard capital relationship," he explained.

Mark Starkey, commercial director at Logicalis, said: "This is the only major vendor I am aware of that is offering a genuine monthly rental model. The risk lies with the vendor, not the financing company or reseller."

Richard Archer, sales director of Redstone (pictured), also hailed BNS. "All the vendors are very happy to talk about utility-based models but when it comes down to it, few operate a genuine pay-as-you-go model," he said. "We need to push back a little into the key vendors to get them to start supporting that process."