10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 27, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number: 000-25601

Brocade Communications Systems, Inc.

(Exact name of registrant as specified in its charter)

Delaware	77-0409517
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

130 Holger Way

San Jose, CA 95134

(408) 333-8000

(Address, including zip code, of registrant’s principal executive offices and telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common stock, $0.001 par value	The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ý	Accelerated filer  o	Non-accelerated filer  o	Smaller reporting company  o
	(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

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The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based upon the closing price of a share of the registrant’s common stock on April 28, 2012 as reported by the NASDAQ Global Select Market on that date, was approximately $2,521,950,135. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purpose.

The number of shares outstanding of the registrant’s common stock as of December 7, 2012 was 456,174,616 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement for its 2013 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed with the Securities and Exchange Commission, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated.

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BROCADE COMMUNICATIONS SYSTEMS, INC.

FORM 10-K

For the Fiscal Year Ended October 27, 2012

INDEX

		Page
	PART I
Item 1.	Business	5
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	27
Item 2.	Properties	27
Item 3.	Legal Proceedings	27
Item 4.	Mine Safety Disclosures	27
	PART II
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	28
Item 6.	Selected Financial Data	30
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	51
Item 8.	Financial Statements and Supplementary Data	53
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	99
Item 9A.	Controls and Procedures	99
Item 9B.	Other Information	102
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	102
Item 11.	Executive Compensation	102
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	102
Item 13.	Certain Relationships and Related Transactions, and Director Independence	102
Item 14.	Principal Accountant Fees and Services	102
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	103
	SIGNATURES	113

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Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements regarding future events and future results. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, statements regarding future revenue, margins, expenses, tax provisions, earnings, cash flows, benefit obligations, debt repayments, share repurchases or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning expected development, performance or market share relating to products or services; any statements regarding future economic conditions or performance; any statements regarding pending litigation, including claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Words such as “expects,” “anticipates,” “assumes,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are based on current expectations, estimates, forecasts and projections about the industries in which Brocade operates, and the beliefs and assumptions of management. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict, including those identified below, under “Part I—Item 1A. Risk Factors” and elsewhere herein. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Further, Brocade undertakes no obligation to revise or update any forward-looking statements for any reason.

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PART I

Item 1. Business

General

Brocade Communications Systems, Inc. (“Brocade” or the “Company”) is a leading supplier of networking equipment, including Storage Area Networking (“SAN”) solutions and Internet Protocol (“IP”) networking solutions for businesses and organizations of many types and sizes, including global enterprises and service providers such as telecommunication firms, cable operators and mobile carriers. Brocade offers a comprehensive line of high-performance networking hardware and software products as well as services that enable businesses and organizations to make their networks and data centers more efficient, reliable and adaptable to the changing demands of new network traffic patterns and volume. Brocade’s products, services and solutions simplify information technology (“IT”) infrastructure, increase resource utilization, ensure availability of mission critical applications, and support key IT services, including Internet connectivity and enterprise and end user mobile computing device connectivity (“mobility”), as well as emerging networking requirements such as virtualization, software-defined networking (“SDN”), and cloud computing.

Brocade products and services are marketed, sold and supported worldwide to end-user customers through distribution partners, including original equipment manufacturers (“OEMs”), distributors, systems integrators, value-added resellers (“VARs”) and directly to end-users by the Brocade sales force.

For revenue and other information regarding Brocade’s operating segments, see Note 14 “Segment Information,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K , which is incorporated herein by reference.

Products and Services

SAN Products

Brocade’s storage networking products and services are designed to help customers reduce the cost and complexity of managing business information within a shared data storage environment, while enabling high levels of availability of mission-critical business applications. In addition, Brocade’s products and services assist customers in the development and delivery of storage and server consolidation, disaster recovery, data security, and in meeting compliance requirements regarding data management. Customers use Brocade’s Fibre Channel (“FC”) protocol based networking products to build storage area networks. Brocade’s products are generally used in conjunction with servers and storage subsystems, SAN interconnection components such as host bus adapters (“HBAs”), which connect host computers to a FC network, and server and storage management software applications and tools. By utilizing shared storage, or networked storage solutions, enterprises of all types and sizes can more easily share and consolidate server and storage resources, centralize and simplify data management, scale and provision storage resources more effectively, and improve application efficiency, performance and availability. As a result, these enterprises are able to better utilize IT assets, improve productivity of IT personnel, reduce capital and operational expenditures, and more reliably and securely store, manage and administer business information.

Brocade’s family of FC SAN backbones, directors, HBAs, fabric and embedded switches provide interconnections, bandwidth and high-speed routing of data between servers and storage devices. Product models range from entry-level 8 port fabric switches to 512 port directors in a single chassis, addressing the needs of small departments and global enterprises alike. These high-performance solutions are available to support requirements both for open systems and mainframe operations. 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. Brocade’s storage networking products have been designed to meet the storage networking needs of end-users in environments ranging from small and medium-sized businesses to large enterprises with storage network fabrics that scale to thousands of ports, spread across multiple locations around the world.

Brocade offers a variety of fabric extension, switching and routing solutions that are designed to connect two or more data centers over long distances to enhance business continuity and disaster recovery. Brocade’s fabric extension solutions support FC SAN extension, mainframe extension (Fibre Connectivity), as well as other multiprotocol switching and routing technologies including optical, asynchronous transfer mode, and IP networks. Through its Brocade Network Advisor software, Brocade offers end-to-end management across multiple fabrics with high levels of scalability and performance designed to maximize data availability even over extended distances.

Brocade offers high-speed, highly reliable hardware in both modular and fixed-switch form factors that provides fabric-based encryption and compression services. Brocade works with industry-leading security solution vendors to offer customers a wide choice of enterprise-class key management systems options. These solutions provide high-performance disk encryption

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processing power to meet the needs of the most demanding enterprise environments with flexible, on-demand performance and enable industry-leading encryption-based security.

Brocade is now shipping the next generation of FC industry standard products, which offer 16 gigabits per second (“Gbps”) performance and deliver higher levels of scalability and advanced capabilities in network management and diagnostics. Brocade’s commitment to 16 Gbps FC builds upon its market leadership in FC storage networking solutions, which include the flagship Brocade DCX^(R) 8510 Backbone family along with SAN directors, switches and HBAs. Brocade has also been a leader in the industry in every FC technology cycle, including the evolution from 1, 2, 4, 8 and now 16 Gbps technologies.

Brocade also offers various data center networking products, including fixed port switches, fixed and modular fabric switches such as the Brocade VDX, and blades for its SAN backbones, that support other protocols such as Fibre Channel over Ethernet (“FCoE”). Brocade is one of the pioneers of these technologies and has been instrumental in driving the protocol toward standardization.

IP Networking Products—Ethernet Switching and Internet Protocol Routing

Brocade’s IP networking products are designed to connect users over an enterprise network. These products enable network connectivity such as access to the Internet, network-based communications such as voice over IP (“VoIP”), and higher levels of collaboration through unified messaging applications and greater degrees of productivity through enterprise and end user mobility. Brocade offers a variety of platforms to allow customers to design a network to meet their needs, including the Brocade BigIron, FastIron, EdgeIron, TurboIron, FCX and ICX product families. Brocade’s Layer 2 and Layer 3 Ethernet switches provide cost-effective delivery of the intelligence, speed and manageability required to support the increasing use of bandwidth-intensive and Internet-based applications.

Brocade also offers Layer 2 and Layer 3 Ethernet products that simplify the physical infrastructure of the network. These switches and software, also known as “Ethernet fabric” solutions, provide new levels of network automation, scalability, performance and operational simplicity that are essential in helping IT move to highly virtualized and cloud environments, as well as software-defined networks. Brocade delivers Ethernet fabric capabilities through its family of Brocade VDX Data Center Switches, which began shipping in early fiscal year 2011. The Brocade VDX family of switches, with Brocade Virtual Cluster Switching ("VCS") or VCS Fabric technology, provides enterprise agility through automated, zero-touch Virtual Machine (“VM”) discovery, configuration, and mobility. Brocade now offers three versions of the VDX fixed-port switches, specifically the VDX 6710, 6720 and 6730 models, as well as a modular switch, the VDX 8770 announced in September 2012, that offer differing levels of performance, port density and functionality that customers may choose based on their needs.

Brocade’s NetIron MLX, MLXe, CES, CER and XMR families of routers and carrier-class switches are designed to handle network traffic within and across service provider networks, including telecommunications providers, cable multiservice operators and mobile carriers. Brocade offers a full portfolio of Ethernet-optimized platforms designed for service provider environments including the data center, metro access, aggregation and high-capacity IP/Multiprotocol Label Switching (“MPLS”) core. Brocade also offers an industry-leading portfolio of Carrier Ethernet products from the metro edge into the network core. Brocade’s Metro and Internet routers are designed to deliver the capabilities, performance and scalability needed to provide efficient and reliable routing services to Internet data centers around the world.

Brocade is also focused on helping its large enterprise and global service provider customers fundamentally change their business and make them more agile, innovative and profitable by enabling their networks to deliver new services and capabilities based on cloud computing and SDN. Both cloud computing and SDN are transforming how these customers architect their networks and are able to deliver IT services to their end-users. Brocade believes it has taken a leadership position in delivering a variety of purpose-built innovations for cloud computing and SDN such as Ethernet fabrics, high-density 10 and 100 Gigabit Ethernet, IPv6, OpenFlow support and software networking. Brocade's strategy provides a clear upgrade path to these new networking solutions for its customers, leveraging existing network investments and enabling network operators to start with a low level of risk as they begin to provide services in a highly predictable, non-disruptive manner.

IP Networking Products—Application Delivery Products (“ADP”)

Brocade’s Layer 4 – 7 platforms, including the Brocade ServerIron and ServerIron ADX Series family of products, are designed for application traffic management and server load balancing, allowing customers to improve the performance of specific applications or improve the performance of a server farm. These high-performance data center traffic management systems with network intelligence capabilities allow enterprises and service providers to build reliable network infrastructures that efficiently manage the flow of traffic over extended distances, known as metro area networks and wide area networks.

In fiscal year 2011, Brocade introduced new software for its ServerIron ADX Series products that enables these platforms to act as a seamless gateway between existing IPv4 networks and networks built on IPv6 technology. According to networking

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experts and industry research firms, IPv4 has reached its scalability limits due to the exponential proliferation of networked devices such as smartphones, mobile tablets, laptops and smart sensors. This growth has resulted in the emergence of new IPv6-only devices requiring IT organizations to create new strategies to service these clients while limiting the disruption of large scale technology upgrades. With this new gateway functionality, Brocade is able to provide its customers with a pragmatic path to adopt IPv6 technology and support both IPv4 and IPv6 environments simultaneously, offering them a seamless and non-disruptive migration strategy.

Global Services

Brocade offers a wide range of consulting and support services that assist customers in designing, implementing, deploying and managing advanced networking solutions, as well as post-contract customer support (“PCS”). These services address a number of customer priorities that must be managed during the life cycle of a storage network or data center network infrastructure and are meaningful to customers because Brocade brings valuable experience and expertise to a customer challenge. Brocade’s services may be delivered directly to end-user customers or via partners as a component of a broader service and support offering.

Industry Initiatives and Standards Development

Brocade believes that, as the need for networking solutions continues to evolve, enterprises will look to further simplify the tasks of storing, managing and administering their data, while also looking to optimize or improve the efficiency of their IT investments and reduce both capital and operational expenditures. Brocade also believes enterprises will continue to expand the size and scope of their networks as well as the number and types of applications that these networks support.

Brocade believes that the future evolution of networking and data center management markets will be led by the providers of products and services that simplify the management of increasingly virtualized server and storage environments and improve returns on end-users’ IT investments on an ongoing basis. Brocade also believes that networking and data center infrastructure solutions will evolve to provide increased capabilities that enable new types of data management applications that simplify the management of data, increase operational efficiencies and reduce operating expense. As a result, many of Brocade’s initiatives and investments are aimed at expanding the capabilities enabled by networks, increasing end-to-end interoperability, protecting end-user investments in existing and new IT resources, and making it easier for Brocade and its partners to deliver solutions that provide efficiencies in managing large, complex and growing enterprise data center environments.

Brocade works with industry-leading organizations to facilitate the development of standards, technologies, products and services that focus on the simplification of data center infrastructure management and the implementation and management of data networking environments. Brocade has a partner-centric approach to building solutions and works with nearly every leading provider of server, storage and storage network management applications and technologies.

Brocade has a long history of being a major contributor to the evolution of industry standards ranging from FC communication technology to storage network interoperability to storage and storage network management. Brocade contributes to related industry standards committees and has authored or co-authored many of the FC protocol standards in existence today. As Brocade continues to expand its leadership presence in new technologies, Brocade’s participation in associated standards groups continues to grow. In fiscal year 2012, Brocade was a member of the Ethernet Alliance, Metro Ethernet Forum, Open Networking Foundation, OpenStack Foundation, IETF, IEEE, FCIA Board, SNIA Technical Council, DMTF Technical Council and FC-related industry associations and standards bodies. Brocade also currently chairs the INCITS T11 Committee, the lead governing body for all FC-related standards, which includes FCoE. In October 2011, the Ethernet Alliance named a Brocade senior technologist as its new president.

Education and Technical Certification Services

Brocade’s education and training organization delivers technical education and training to its partners and their customers on Brocade technology that encompasses design, implementation and management solutions. This education and training curriculum is delivered worldwide using diverse methodologies, which include instructor-led classes and an online web-based training portfolio, as well as a “live” virtual classroom capability. Brocade Education Services trained approximately 28,000 IT professionals in fiscal year 2012. The Brocade University also offers certification on Brocade solutions for IT professionals who have completed certain tests administered by an independent testing organization. The certification program is designed to measure the knowledge and proficiency of IT professionals in Brocade data center and data management solutions and technologies, and to help ensure that Brocade’s customers receive superior customer service and support. Approximately 33,000 certification tests have been delivered and 13,500 IT professionals have received Brocade credentials since inception of the program in October 2000. Brocade’s education and training services are made available through its own education facilities and through its worldwide training provider network.

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Distribution Channels

Brocade’s products and services are marketed, sold and supported worldwide to end-user customers through distribution partners, including OEMs, distributors, systems integrators, VARs, and directly to end-users by the Brocade sales force.

Brocade’s OEM partners are leading server, storage and systems providers who offer Brocade’s products under their own private label or as Brocade-branded solutions. Sales of these products through OEM partners comprise the majority of Brocade’s business. Other distribution partners include a global network of authorized distributors, systems integrators and VARs. Brocade authorizes these partners to market, sell and support its products and services. Some of these partners also sell training and other value-added services.

Brocade has OEM or distribution agreements with most of the major companies that sell enterprise servers and storage systems. In addition, Brocade employs a worldwide sales force to assist its distribution partners in marketing Brocade solutions, assessing customer requirements and designing, implementing and maintaining Brocade-based solutions.

Customers

For the fiscal years ended October 27, 2012, October 29, 2011 and October 30, 2010, Brocade’s largest OEM customers, EMC Corporation (“EMC”), Hewlett-Packard Company (“HP”) and International Business Machines Corporation (“IBM”), that each represented 10% or more of Brocade's total net revenues, accounted for combined totals of 47% (EMC with 16%, HP with 13% and IBM with 18%), 43% (EMC with 15%, HP with 13% and IBM with 15%) and 47% (EMC with 16%, HP with 14% and IBM with 17%) of Brocade's total net revenues, respectively. Sales to any OEM customer may vary from quarter to quarter. Brocade’s routes-to-market include distributors, direct to end-users, global systems integrators and VARs and the OEM channel.

In the IP networking market, Brocade cultivates business through its distributors in a number of key customer markets such as the service provider, U.S. federal government and enterprise segments. Customers in these market segments represented a significant part of Brocade’s IP networking business. Brocade’s strategy to expand its sales of IP networking products includes leveraging current investments in direct sales, two-tier distribution and channel partnerships, and international markets, as well as selling into existing customer accounts in which it has a significant SAN presence, including Global 1000 companies and other targeted end-users.

Geographic Information

For the fiscal year ended October 27, 2012, domestic and international revenues were approximately 63% and 37% of total net revenues, respectively. For the fiscal year ended October 29, 2011, domestic and international revenues were approximately 61% and 39% of total net revenues, respectively. For the year ended October 30, 2010, domestic and international revenues were approximately 64% and 36% of total net revenues, respectively. International revenues primarily consist of sales to customers in Western Europe, the greater Asia Pacific region and Japan.

Revenues are attributed to geographic areas based on where Brocade’s products are shipped. However, certain OEM customers take possession of Brocade’s products in one country and then may distribute these products to their customers in different countries. Accordingly, Brocade cannot be certain of the extent to which its domestic and international revenue mix is impacted by the practices of its OEM customers. Nevertheless, data provided by OEM customers indicate that international customers may account for a higher percentage of end-user demand than that indicated by Brocade’s mix of domestic and international revenues.

The majority of Brocade’s assets as of October 27, 2012 were attributable to its United States operations. For additional geographic information on Brocade’s revenues and longlived assets, see Note 14 “Segment Information,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K, which is incorporated herein by reference. Also, for a discussion of the risks attendant to Brocade’s international operations, see Part I, Item 1A. Risk Factors of this Form 10-K, which is incorporated herein by reference.

Acquisitions and Investments

Brocade’s acquisition and investment strategy is focused on facilitating the evolution and expansion of shared storage, data management and IP networking.

On December 18, 2008, Brocade completed its acquisition of Foundry Networks, Inc. (“Foundry”), a performance and total solutions leader for network switching and routing. This acquisition positioned Brocade as a leading supplier of end-to-end networking solutions that help enterprises and service providers connect and manage their information.

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On November 9, 2012, Brocade completed its acquisition of Vyatta Inc. (“Vyatta”), a networking industry innovator through its software-based network operating system that is highly relevant for multiple applications in network virtualization, SDN and private/public cloud computing platforms. This acquisition complements Brocade's investments in Ethernet fabrics and SDN, as well as enables Brocade to pursue new market opportunities in data center virtualization, public and enterprise virtual private cloud computing platforms, and managed services.

From time to time, Brocade has made equity investments in companies that develop technology or provide services that are complementary to or broaden the markets for its products or services and further its business objectives.

Research and Development

The industry in which Brocade competes is impacted by rapid technological developments, evolving industry standards, changes in customer requirements, new product introductions and consolidation. As a result, Brocade’s success depends, in part, on its ability to continue to enhance its existing solutions and to develop and introduce new solutions that improve performance and reduce the total cost of ownership for networking. Brocade has invested significantly in product research and development. Brocade continues to enhance and extend its products and increase the speed, performance and port-density of its switching platform. Brocade also continues to expand its products’ operating system enhancements and other software feature development to further simplify storage management and to enable more functionality for end-user customers, OEM partners and application partners.

Brocade's products are designed to support current industry standards and may continue to support emerging standards that are consistent with its product strategy. Brocade designs its products around a common platform architecture which facilitates the product design, development and testing cycle, and reduces the time to market for new products and features. Products acquired through acquisitions are mapped to existing design roadmaps that leverage common platform designs and know-how. Brocade intends to continue to leverage this common architecture to develop and introduce additional hardware and software products and enhancements in the future.

Brocade’s product development process includes the certification of certain of its products by its OEM partners as well as additional certifications to comply with the requirements of the U.S. federal government and local regulations. During this process, Brocade supports its OEM partners in the testing of its new products to ensure that they meet quality, functionality and interoperability requirements. The process is completed once the OEM partner has certified the product and announced general availability of that product to its customers.

For the years ended October 27, 2012, October 29, 2011 and October 30, 2010, Brocade’s research and development expenses totaled $363.1 million, $354.4 million and $354.3 million, respectively. All expenditures for research and development costs have been expensed as incurred.

Competition

The market for networking solutions is intensely competitive. In particular, Cisco Systems, Inc. (“Cisco”) holds a large market share in the IP networking and SAN markets and a number of its products compete directly with Brocade’s products. Brocade also competes with other IP networking companies, such as Alcatel-Lucent, Arista Networks, Aruba Networks, Inc., Avaya Inc., Enterasys Networks, Inc., Extreme Networks, Inc., F5 Networks, Inc., Dell/Force10 Networks, Inc., HP, Huawei Technologies Co. Ltd., IBM and Juniper Networks, Inc. (“Juniper”). Some of Brocade’s current and potential competitors have greater market leverage, longer operating histories, greater financial, technical, sales, marketing and other resources, more name recognition and larger installed customer bases.

In addition, Brocade faces significant competition from providers of SAN products and services for interconnecting servers and storage. These principal competitors include Cisco and QLogic Corporation (“QLogic”) in the FC switching market and QLogic and Emulex Corporation in the HBA/ converged network adapter (“CNA”) markets. In addition, EMC, one of Brocade’s top OEM customers in terms of FC sales and a go-to-market and technology partner since 1997, has formed a separate venture with Cisco and VMware called the “Virtual Computing Environment” (VCE) that enables the joint venture to sell packaged “cloud computing” and data center virtualization solutions. Brocade also faces competitors in other markets in which we participate, such as F5 Networks, Inc. and A10 Networks, Inc. in the application delivery market.

New competitors are likely to emerge from new technology trends such as SDN. There have been many key industry developments behind SDN that impact R&D, partnerships and mergers and acquisitions activity. The VMware acquisition of Nicira for network virtualization technology is a recent and significant example. These competitors may use emerging technologies and various routes-to-market to compete with Brocade. In addition, Brocade’s OEM partners, who also have relationships with some of Brocade’s current competitors, could become new competitors by developing, acquiring or introducing products and solutions that compete with Brocade’s product offerings. Competitive pressure will also likely intensify as technology trends impact long-standing alliances, partnerships and go-to-market routes.

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As the networking solutions market evolves, additional technologies may become available for interconnecting servers and storage. To the extent that products based upon these technologies provide the ability to connect network servers and storage and support high-performance storage applications, they are likely to compete with Brocade’s current and future products. Competitive technologies include, but are not limited to, emerging IP storage products such as Internet Small Computer System Interface (“iSCSI”) and Network Attached Storage (“NAS”), InfiniBand and Direct Attached Storage. In addition, networking companies, manufacturers of networking equipment, and other companies may develop competitive products and technologies. Brocade’s OEM partners or other partners could also develop and introduce products that compete with Brocade’s product offerings. Brocade believes the competitive factors in this market include product performance and features, product reliability, price, size, extent of installed base, ability to meet delivery schedules, customer service, technical support and distribution channels.

In addition, new technologies that store data in the server with flash memory could create competition for Brocade's SAN products. Fusion I/O, Inc. and Violin Memory, Inc. are two vendors that offer these solutions.

Manufacturing

Brocade has manufacturing arrangements with Hon Hai Precision Industry Co., Ltd. (“Foxconn”), Accton Wireless Broadband Corporation (“Accton”), Motorola, Inc. (“Motorola”) and Quanta Computer Incorporated (“Quanta”) (collectively the contract manufacturers or “CMs”) and a service repair arrangement with Flextronics International Ltd. (“Flextronics”). Under CMs manufacturing arrangements, Brocade provides product forecasts and places purchase orders with CMs in advance of the scheduled delivery of products to Brocade’s customers. The required lead time for placing orders with the CMs depends on the specific product. The CMs invoice Brocade based on prices and payment terms mutually agreed upon and set forth in purchase orders Brocade issues to them. Although the purchase orders Brocade places with its CMs are cancelable, the terms of the agreements require Brocade to purchase all inventory materials not returnable, usable by, or sold to other customers of the CMs.

Brocade uses the CMs for final turnkey product assembly; however, Brocade also maintains key component selection and qualification expertise internally. Brocade designs and develops the key components of its products, including application-specific integrated circuits (“ASICs”), operating system and other software, as well as certain details in the fabrication and enclosure of its products. In addition, Brocade determines the components that are incorporated into its products and selects appropriate suppliers of those components.

Although Brocade uses standard parts and components for its products where possible, Brocade’s CMs currently purchase, on Brocade’s behalf, several key components used in the manufacture of its products from single or limited supplier sources. Brocade’s principal single source components include ASICs, built by third-parties based on Brocade’s designs, and Brocade’s principal limited source components include memory, certain oscillators, microprocessors, certain connectors, certain logic chips, certain power supplies, enclosures, programmable logic devices, certain printed circuit boards, certain optical components, packet processors and switching fabrics.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 Section 1502 (the “Dodd-Frank Act”) requires certain public companies to disclose whether certain minerals, commonly known as “conflict minerals,” are necessary to the functionality or production of a product manufactured by those companies and if those minerals originated in the Democratic Republic of the Congo (DRC) or an adjoining country. It may be possible that conflict minerals may be part of the supply chain in the electronics industry and contained in Brocade’s products. To comply with the Dodd-Frank Act, as determined by the U.S. Securities and Exchange Commission (the “SEC”), Brocade will be required to perform due diligence and disclose whether or not its products contain such minerals and from which countries and source (smelter) the minerals were obtained. The implementation of these requirements by government regulators and Brocade’s partners and/or customers could adversely affect the sourcing, availability, and pricing of minerals used in the manufacture of certain components used in Brocade’s products.

In addition, Brocade licenses certain software from third parties that is incorporated into its fabric operating system and other software. See Part I, Item 1A. Risk Factors of this Form 10-K, which is incorporated herein by reference.

Environmental Matters

Brocade is subject to various environmental and other regulations governing product safety, materials usage, packaging and other environmental impacts in the various countries where its products are sold. For example, many of Brocade’s products are subject to laws and regulations that restrict the use of lead, mercury, hexavalent chromium, cadmium and other substances, and require producers of electrical and electronic equipment to assume responsibility for collecting, treating, recycling and disposing of its products when they have reached the end of their useful life. In Europe, substance restrictions apply to products Brocade sells, and certain of Brocade’s OEM partners require compliance with these or more stringent requirements. Recycling, labeling, financing and related requirements also apply to products Brocade sells in Europe. China has also enacted

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legislation with similar requirements for Brocade’s products or its OEM partners for Brocade products sold in China. Brocade may be required to redesign its products to ensure that they comply with any new requirements as well as related requirements imposed by its OEM customers. Brocade also continues to work with its suppliers to ensure they provide Brocade with compliant materials, parts and components. Various other countries and states in the United States have issued, or are in the process of issuing, other environmental regulations that may impose additional restrictions or obligations and require further changes to Brocade’s products, or may require Brocade to incur additional costs to comply.

Patents, Intellectual Property and Licensing

Brocade relies on a combination of patent, copyright, trademark and trade secret laws, and contractual restrictions on disclosure to protect its intellectual property rights in these proprietary technologies. Despite these precautions, the measures Brocade undertakes may not prevent misappropriation or infringement of its proprietary technology. These measures also may not preclude competitors from independently developing products with functionality or features similar to our products.

Brocade maintains a program to identify and obtain patent protection for its selected inventions. As of October 27, 2012, Brocade has 406 patents in the United States and 17 patents in various foreign countries (based on certain U.S. patents or patent applications) that are currently in force and has approximately 305 patent applications pending in the United States and approximately 15 patent applications pending in various foreign countries (based on certain U.S. patents or patent applications). The normal expiration dates of Brocade’s issued patents in the United States range from 2012 to approximately 2030. Although Brocade has patent applications pending, there can be no assurance that patents will be issued from pending applications or that claims allowed on any future patents will be sufficiently broad to protect its technology.

Many of Brocade’s products are designed to include software or other intellectual property licensed from third parties. While it may be necessary in the future to seek or renew licenses relating to various aspects of its products, Brocade believes that such licenses generally could be obtained on commercially reasonable terms. However, failure to obtain such licenses on commercially reasonable terms could materially harm Brocade’s business. See Part I, Item 1A. Risk Factors of this Form 10-K, which is incorporated herein by reference.

From time to time, third parties have asserted patent, copyright and trade secret rights to technologies and standards that are important to Brocade. Third parties assert patent infringement claims against Brocade from time to time in the form of letters, lawsuits and other forms of communication. In addition, from time to time, Brocade receives notification from customers claiming that they are entitled to indemnification or other obligations from Brocade related to infringement claims made against them by third parties. Litigation, even if Brocade is ultimately successful, can be costly and divert management's attention away from the day-to-day operations of Brocade. See Note 9 “Commitments and Contingencies,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.

Seasonality

Historically, Brocade's SAN products revenue in the first and fourth fiscal quarters is stronger than revenue in the second and third fiscal quarters. Historically, Brocade's IP networking products revenue is strongest in the fourth fiscal quarter while revenue in the first fiscal quarter is weakest, driven primarily by the seasonality of Brocade's federal business revenue.

The historical seasonal patterns may be materially different in any given year due to factors such as quarterly changes in SAN inventory levels at OEMs, higher or lower demand for products and services due to macroeconomic impacts, U.S. federal government budget changes, as well as other factors.

Backlog

Brocade’s business is characterized by short lead-time orders and fast delivery schedules. Sales of its products are generally made pursuant to contracts and purchase orders that are cancelable without significant penalties. These commitments are subject to price negotiations and to changes in quantities of products and delivery schedules in order to reflect changes in customers’ requirements and manufacturing availability. In addition, actual shipments depend on the manufacturing capacity of suppliers and the availability of products from such suppliers. As a result of the foregoing factors, Brocade does not believe that backlog at any given time is a meaningful indicator of its ability to achieve any particular level of overall revenue or financial performance.

Employees

As of October 27, 2012, Brocade had 4,536 employees. Brocade has not experienced any work stoppages and considers its relations with its employees to be good. Brocade’s employees are currently located in the United States headquarters in San Jose, California, as well as facilities in Broomfield, Colorado, Herndon, Virginia, Plymouth, Minnesota, Brocade’s European

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headquarters in Geneva, Switzerland, Brocade’s Asia Pacific headquarters in Singapore, and other offices throughout North America, Europe, Asia Pacific, Japan and Central and South America.

Other

Brocade was incorporated in California on August 24, 1995 and reincorporated in Delaware on May 14, 1999. Brocade’s mailing address and executive offices are located at 130 Holger Way, San Jose, California 95134. Brocade’s telephone number is (408) 333-8000.

Brocade’s corporate Web site is www.brocade.com. Brocade’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on Brocade’s Web site when such reports are available on the SEC Web site. The public may read and copy any materials filed by Brocade with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains a Web site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The content of any Web site referred to in this Form 10-K is not incorporated by reference into this filing. Further, Brocade’s references to the Uniform Resource Locators (“URLs”) for these Web sites are intended to be inactive textual references only.

ADX, Brocade, Brocade Assurance, Brocade One, the B-wing symbol, DCX, Fabric OS, ICX, MLX, MyBrocade, SAN Health, VCS, and VDX are registered trademarks, and AnyIO, HyperEdge, NET Health, OpenScript, and The Effortless Network are trademarks of Brocade Communications Systems, Inc., in the United States and/or in other countries. Other brands, products, or service names mentioned may be trademarks of their respective owners.

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Item 1A. Risk Factors

Uncertainty about or a slowdown in the domestic and global economies has adversely affected, and may increasingly adversely affect, Brocade's operating results and financial condition.

There is ongoing uncertainty about the domestic and global economies and there may be a prolonged period of significant slowdown. Such uncertainty or slowdown may result in lower growth or a decline in the networking industry as a whole and reduced demand for information technology, including high-performance data networking solutions. Information technology (“IT”) spending has historically declined as federal IT spending decreases and general economic and market conditions have worsened. The loss or delay of orders from any of Brocade's more significant customers, such as the U.S. government or individual branches or agencies within the U.S. government, such as the Department of Defense or certain intelligence agencies where Brocade's revenue is highly concentrated, or customers within the financial services, education, health sectors and service providers, could also cause its revenue and profitability to suffer. For example, if Brocade experiences governmental procurement delays due to the timing of approval of the federal budget or budget reductions that target specific agencies where Brocade's federal revenue is concentrated, Brocade's revenue and operating results could be negatively impacted. If the domestic and/or global economy undergoes a prolonged period of significant uncertainty or a significant downturn, such as the debt crisis occurring in the Eurozone economy, or if Brocade's customers believe such a period of uncertainty or a downturn will continue for a sustained period, they will likely reduce their information technology spending and future budgets. Brocade is particularly susceptible to reductions in information technology spending because the purchase of Brocade's products is often discretionary and may involve a significant commitment of capital and other resources. Future delays or reductions in information technology spending, domestically and/or internationally, could harm Brocade's business, results of operations and financial condition in a number of ways, including longer sales cycles, increased inventory provisions, intangible assets and goodwill impairment, increased production costs, lowered prices for products and reduced sales volumes. Similarly, as Brocade's suppliers face challenges in obtaining credit or otherwise in operating their businesses, they may become unable to continue to offer the materials Brocade uses to manufacture its products. These events have caused, and may cause further, reductions in Brocade's revenue, profitability and cash flows, increased price competition, increased operating costs and longer fulfillment cycles and exacerbate many other risks noted in this Form 10-K, which adversely affect Brocade's business, results of operations and financial condition.

Given the current uncertainty about the extent and duration of the global financial recovery, it is increasingly difficult for Brocade, Brocade's customers and Brocade's suppliers to accurately forecast future product demand trends, which could cause Brocade to produce excess products that would increase Brocade's inventory carrying costs and could result in obsolete inventory that would reduce Brocade's profits. Alternatively, this forecasting difficulty could cause a shortage of products or materials used in Brocade's products that would result in an inability to satisfy demand for Brocade's products and a loss of revenues and market share.

A prolonged period of economic uncertainty or a downturn may also significantly affect financing markets, the availability of capital and the terms and conditions of financing arrangements, including the overall cost of financing. Circumstances may arise in which Brocade needs, or desires, to raise additional capital. Such capital may not be available on commercially reasonable terms, or at all, which in turn could adversely affect Brocade's financial condition.

Intense competition in the market for networking solutions could prevent Brocade from increasing or maintaining revenue, profitability and cash flows with respect to its networking solutions.

The networking market is increasingly competitive. While Cisco Systems, Inc. (“Cisco”) maintains a dominant position in the IP networking market, other companies have strengthened their networking portfolios through acquisitions, including the acquisition of Force10 Networks by Dell Inc. (“Dell”), the acquisition of 3Com Corporation by Hewlett-Packard Company (“HP”), and the acquisition of Blade Network Technologies by International Business Machines Corporation (“IBM”). These acquisitions have limited Brocade's ability to sell IP networking products through these companies and may also indirectly impact the Fibre Channel (“FC”) business. HP, IBM and Dell are important OEM partners for Brocade in the FC switching market, yet are competitive with Brocade in other markets. Other competitors in the IP networking market include Arista Networks, Alcatel-Lucent, Avaya Inc., A10 Networks, Inc. (“A10”), Enterasys Networks, Inc., Extreme Networks, Inc., F5 Networks, Inc., Huawei Technologies Co. Ltd. and Juniper Networks, Inc.

Brocade also competes with providers of SAN products and services for interconnecting servers and storage. These principal competitors include Cisco and QLogic Corporation in the FC switching market and QLogic Corporation and Emulex Corporation in the HBA/ converged network adapter (“CNA”) markets. Also, our OEM partners have developed and may in the future develop partnerships with our competitors in the storage and networking markets to sell packaged solutions which may impact our business with that partner and our ability to compete in the marketplace.

The above-referenced acquisitions and business partnerships demonstrate the increasingly complex nature of relationships within the networking industry, especially as the IT industry migrates to cloud computing models. This trend has led the

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networking industry to introduce new solutions and technology architectures to support cloud computing. One development in this area is Brocade's efforts behind “Ethernet fabrics” where Brocade has introduced a new portfolio through the Brocade VDX family of Data Center Switches and the Brocade VCS software. Brocade's competitors also recently introduced and have begun shipping new products focused on cloud computing and delivering alternative flat network solutions such as Juniper Networks, Inc. with its QFabric architecture and Cisco with its FabricPath technology. Other competitors in cloud solutions include Arista Networks, Avaya Inc., Alcatel-Lucent and Dell/Force10 Networks who have all recently introduced roadmaps and solutions targeted at cloud computing users.

Another area of increased competition is the development of software-defined networking, or SDN, which reflects the need for networks to become more flexible, agile and elastic. There have been many key industry developments behind SDN that impact R&D, partnerships and mergers and acquisitions (“M&A”) activity. The VMware acquisition of Nicira for network virtualization technology is a recent and significant example. Brocade has outlined an SDN strategy comprised of internal R&D, partnerships, M&A, such as Brocade's recent acquisition of Vyatta, Inc. (“Vyatta”), and talent recruitment/development. While development of SDN is still in its early stages, a slower rate of adoption of SDN and loss of key partnerships with other SDN contributors would negatively impact Brocade's opportunity to grow in this area.

Some of Brocade's competitors have greater market leverage, longer operating histories, greater financial, technical, sales, marketing and other resources, more name recognition and larger installed customer bases. Brocade's competitors could also adopt more aggressive pricing policies than Brocade. Brocade believes that competition based on price may become more aggressive than it has traditionally experienced. As a result of these factors, Brocade's competitors could devote more resources to develop, promote and sell their own products rather than Brocade's, and, therefore, those competitors could respond more quickly to changes in customer or market requirements. Brocade's failure to successfully compete in the market would harm Brocade's business and financial results.

Brocade's failure to successfully grow a channel and direct sales model or any other significant failure to execute on Brocade's overall sales strategy could significantly reduce Brocade's revenues and negatively affect Brocade's financial results.

Brocade offers its IP networking products through a multipath distribution strategy, including through resellers, distributors, the Brocade direct sales force, and through OEMs that have historically offered Brocade Storage Area Networking (“SAN”) products. However, Brocade's efforts to increase sales through both these new and expanded channels may not generate much, if any, incremental revenue opportunities for Brocade. This is further compounded by the fact that several of our major OEM customers, including Dell, IBM and HP, have acquired companies who offer IP networking products competitive to Brocade's offerings. A loss of or significant reduction in revenue through one of Brocade's paths to market would impact Brocade's financial results.

Additionally, Brocade has focused substantial resources to emphasize the IP networking market and to increase revenues through a multi-tier channel strategy. This focus on the IP networking market may negatively impact Brocade's other businesses such as its SAN products because management's attention and limited resources such as employees may be reallocated away from Brocade's SAN products and towards IP networking products. Brocade must continually anticipate and respond to the needs of its distribution partners and their customers, and ensure that its products integrate with their solutions. Brocade's failure to successfully manage and grow its distribution relationships or the failure of its distribution partners to sell Brocade's products could reduce Brocade's revenues significantly, especially for its IP networking portfolio. In addition, Brocade's ability to respond to the needs of its distribution partners in the future may depend as well on third parties producing complementary products and applications for Brocade's products to enable these partners to be competitive in the market. There can be no assurance that Brocade will be successful in expanding its go-to-market objectives which includes effectively maintaining or expanding its distribution channels, managing distribution relationships successfully, or marketing its products through distribution partners. If Brocade fails to respond successfully to the needs of these distribution partners, its business and financial results could be harmed.

The prices of Brocade's products have declined in the past and Brocade expects the prices of Brocade's products to continue to decline in the future, which could reduce Brocade's revenues, gross margins and profitability.

The average selling price for Brocade's products has typically declined in the past and will likely continue to decline in the future as a result of competitive pricing pressure, broader macroeconomic factors, product mix, enhanced marketing programs, increased sales discounts, new product introductions by Brocade or Brocade's competitors, the entrance of new competitors and other factors. Price declines may also increase as competitors ramp up product releases that compete with Brocade's products. Furthermore, particularly as economic conditions deteriorate and drive a more cautious capital spending environment in the technology sector, Brocade and its competitors could pursue more aggressive pricing strategies in an effort to maintain or seek to increase sales levels. If Brocade is unable to offset the negative impact from the above factors on the average selling price of Brocade's products by increasing the volume of products shipped or reducing product manufacturing costs, Brocade's total revenues and gross margins will be negatively impacted.

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In addition, to maintain Brocade's gross margins, Brocade must maintain or increase the number of existing products shipped and develop and introduce new products and product enhancements with improved costs, and continue to reduce the overall costs of Brocade's products. While Brocade has successfully reduced the cost of manufacturing its products in the past, Brocade may not be able to continue to reduce cost of production at historical rates or at all. Moreover, most of Brocade's expenses are fixed in the short-term or incurred in advance of receipt of corresponding revenue. As a result, Brocade may not be able to decrease its spending quickly enough or in sufficient amounts to offset any unexpected shortfall in revenues. If this occurs, Brocade could incur losses and Brocade's operating results and gross margins could be below expectations.

Additionally, Brocade's gross margins may be negatively affected by fluctuations in manufacturing volumes, component costs, foreign currency exchange rates, the mix of product configurations sold, the mix of distribution channels through which its products are sold or, if product or related warranty costs associated with Brocade's products are greater than previously experienced. Brocade has also stated its plans to increase gross margins for its IP Networking products by a combination of initiatives, including new product introductions with improved gross margins, normalized pricing, inventory management and increased product volumes. If Brocade is not able to successfully execute on one or more of these ongoing initiatives, gross margin improvements may not be realized.

A limited number of major OEM customers comprise a significant portion of Brocade's revenues and the loss of any of these major OEM customers could significantly reduce Brocade's revenues and negatively affect Brocade's financial results.

Brocade's SAN business depends on recurring purchases from a limited number of large OEM partners for a substantial portion of its revenues. As a result, these large OEM partners have a significant influence on Brocade's quarterly and annual financial results. For fiscal years 2012, 2011 and 2010, the same three customers each represented 10% or more of Brocade's total net revenues, for a combined total of 47%, 43% and 47% of total net revenues, respectively. Brocade's agreements with its OEM partners are typically cancelable, non-exclusive, have no minimum purchase requirements and have no specific timing requirements for purchases. Brocade's OEM partners could also elect to eliminate, reduce, or rebalance the amount they purchase from Brocade and/or increase the amount purchased from Brocade's competitors or introduce their own technology. Changes to SAN inventory levels paid for and held by our OEMs at one or multiple partners can impact Brocade's revenue and earnings results and may mask underlying changes in end-user demand.

Also, one or more of Brocade's OEM partners could elect to consolidate or enter into a strategic partnership with one of Brocade's competitors, which could reduce or eliminate Brocade's future revenue opportunities with that OEM partner. Brocade anticipates that a significant portion of its revenues and operating results from its SAN business will continue to depend on sales to a relatively small number of OEM partners. The loss of any one significant OEM partner, or a decrease in the level of sales to any one significant OEM partner, or unsuccessful quarterly negotiation on key terms, conditions or timing of purchase orders placed during a quarter, would likely cause serious harm to Brocade's business and financial results.

Brocade's OEM partners evaluate and qualify Brocade's SAN products for a limited time period before they begin to market and sell them. Assisting Brocade's OEM partners through the evaluation process requires significant sales, marketing and engineering management efforts on Brocade's part, particularly if Brocade's SAN products are being qualified with multiple distribution partners at the same time. In addition, once Brocade's SAN products have been qualified, its customer agreements have no minimum purchase commitments.

Brocade's future revenue growth depends on its ability to introduce new products and services on a timely basis and achieve market acceptance of these new products and services.

Developing new offerings requires significant upfront investments that may not result in revenue for an extended period of time, if at all. Brocade must achieve widespread market acceptance of its new product and service offerings on a timely basis in order to realize the benefits of Brocade's investments. However, the market for networking solutions, driven in part by the growth and evolution of the Internet, is characterized by rapidly changing technology, accelerating product introduction cycles, changes in customer requirements and evolving industry standards. Brocade's future success depends largely upon its ability to address the rapidly changing needs of its customers by developing and supplying high-quality, cost-effective products, product enhancements and services on a timely basis and by keeping pace with technological developments and emerging industry standards. This risk may become more pronounced if the networking market becomes more competitive.

For example, adoption of IP storage technologies, such as Network Attached Storage (“NAS”) and Internet Small Computer System Interface (“iSCSI”), may displace existing products in customer IT implementations and may erode the total addressable market for FC products. Brocade recently introduced a number of FC switching products that support the new 16 gigabits per second technology standards. The transition to this new FC technology may be negatively impacted if customers accelerate their adoption of alternative storage networking technologies.

Brocade is also an early developer of, and the first-to-market with, Ethernet fabrics based on the Brocade VDX switches and Brocade VCS software, which were built to provide the features necessary to support server virtualization and cloud-based

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architectures. Brocade recently added to this portfolio with the introduction of the Brocade VDX 8770 Modular Switch, which enables customers to build larger-scale fabrics to support larger virtualized data centers and cloud deployments. The success of Ethernet fabrics will depend on customers recognizing the benefits of upgrading their data center local area networks to fabric-based networking architectures. Brocade plans to continue to invest in this area with new and enhanced Ethernet fabric solutions, therefore, Brocade's future success would be negatively impacted if this technological transition does not occur at the anticipated rate or at all.

Other factors that may affect Brocade's successful introduction of new product and service offerings include Brocade's ability to:

• Properly determine the market for and define new products and services, which can be particularly challenging for initial product offerings in new markets;

• Differentiate Brocade's new products and services from its competitors' technology and product offerings;

• Address the complexities of interoperability of Brocade's products with its installed base, OEM partners' server and storage products and its competitors' products;

• Meet or exceed customer requirements for product features, cost-effectiveness, and scalability; and

• Maintain high levels of product quality and reliability.

Various factors impacting market acceptance of Brocade's products are outside of Brocade's control, including the following:

• The availability and price of competing products and alternative technologies;

• The cost of certain product subcomponents, which could cause Brocade to modify prices to maintain adequate gross margins;

• Product qualification requirements by Brocade's OEM partners, which can cause delays in the market acceptance;

• The timing of the adoption of new industry standards relative to Brocade's development of new technologies and products; and

• The ability of Brocade's OEM partners to successfully distribute, support and provide training for its products.

If Brocade is not able to successfully develop and market new and enhanced products and services on a timely basis, its business and results of operations will likely be harmed.

As Brocade introduces new or enhanced products, Brocade must also successfully manage the transition from older products to minimize disruption in customers' ordering patterns, avoid excessive levels of older product inventories and provide sufficient supplies of new products to meet customer demands. The introduction of new or enhanced products may shorten the life cycle of Brocade's existing products, or replace sales of some of its current products, thereby offsetting the benefit of even a successful product introduction and may cause customers to defer purchasing its existing products in anticipation of the new products. When Brocade introduces new or enhanced products, Brocade faces numerous risks relating to product transitions, including the inability to accurately forecast demand, manage excess and obsolete inventories, address new or higher product cost structures, and manage different sales and support requirements due to the type or complexity of the new products. In addition, any customer uncertainty regarding the timeline for rolling out new products or Brocade's plans for future support of existing products may cause customers to delay purchase decisions or purchase competing products which would adversely affect Brocade's business and financial results.

If Brocade loses key talent or is unable to hire additional qualified talent, Brocade's business may be harmed.

Brocade's success depends, to a significant degree, upon the continued contributions of key management including executive officers, engineering, sales and other talent, many of whom would be difficult to replace. In particular, we recently announced that our chief executive officer, Michael Klayko, plans to leave Brocade and our Board of Directors is currently searching for his successor. While our Board of Directors is actively conducting a comprehensive search, the prospective change in the office of the chief executive officer, and any protracted delay in identifying a successor, may cause disruption to our business and adversely affect our operating results. Brocade currently has an interim head of worldwide sales. A continued delay in hiring a permanent head of worldwide sales could also negatively impact the sales organization and adversely affect our operating results.

Brocade believes its future success depends, in large part, upon Brocade's ability to effectively attract highly skilled sales

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talent in addition to managerial, engineering and other talent, and on the ability of management to operate effectively, both individually and as a group, in geographically diverse locations. There is limited qualified talent in each applicable market and competition for such talent has become much more aggressive. Other companies in Brocade's industry and geographic regions are recruiting from the same limited talent pool which creates further compression on the availability of qualified talent. In particular, Brocade operates in various locations with highly competitive labor markets including Bangalore, India and San Jose, California. Brocade may experience difficulty in hiring key management and qualified talent with skills in areas such as sales, application-specific integrated circuits (“ASICs”), software, system and test, product management, marketing, service and customer support.

In addition, declines in Brocade's stock price generally reduce the value of equity awards granted to its employees. To the extent Brocade's stock price declines, Brocade's ability to incentivize, retain or attract qualified talent could be negatively impacted. Additionally, such declines in stock price may result in additional “underwater” stock options held by certain employees. Brocade's ability to retain qualified talent may also be affected by future acquisitions, which may cause uncertainty and loss of key talent.

In addition, companies in the computer storage, networking and server industries whose employees accept positions with competitors may claim that their competitors have engaged in unfair hiring practices or that there will be inappropriate disclosure of confidential or proprietary information. Brocade may be subject to such claims in the future as Brocade seeks to hire additional qualified talent. Such claims could result in litigation. As a result, Brocade could incur substantial costs in defending against these claims, regardless of their merits, and be subject to additional restrictions if any such litigation is resolved against Brocade.

The loss of the services of any of Brocade's key employees, the inability to attract or retain qualified talent in the future, or delays in hiring required talent, particularly sales and engineering talent, could delay the development and introduction of Brocade's products or services, and negatively affect Brocade's ability to sell its products or services.

Brocade has a substantial amount of acquired intangible assets, goodwill and deferred tax assets on its balance sheet, and Brocade could be required to record impairment charges for these assets; any impairment of the carrying value of those assets could adversely affect Brocade's business and financial results.

Brocade has a substantial amount of acquired intangible assets, goodwill and deferred tax assets on its balance sheet. The goodwill and acquired intangibles relate to Brocade's prior acquisitions. In response to changes in industry and market conditions, Brocade may elect to realign its resources strategically and consider restructuring, selling, disposing of, or otherwise exiting businesses. Any decision to limit investment in, sell, dispose of or otherwise exit businesses may result in the recording of special charges, such as inventory and technology-related write-offs, goodwill impairment charges, intangible asset write-offs, workforce reduction costs, charges relating to consolidation of excess facilities, or claims from third parties who were resellers or users of discontinued products.

Brocade is organized into four operating segments, of which two are individually reportable segments: SAN Products and Global Services. The other two operating segments, Ethernet Switching & IP Routing and ADP, combine to form a third reportable segment: IP Networking Products. Brocade's determination of fair value of long-lived assets relies on management's assumptions of future revenues, operating costs, and other relevant factors. If management's estimates of future operating results change or if there are changes to other assumptions, such as the discount rate applied to future cash flows, the estimate of the fair value of Brocade's reporting units could change significantly, which could result in goodwill impairment charges. Brocade's estimates with respect to the useful life or ultimate recoverability of Brocade's carrying basis of assets, including purchased intangible assets, could change as a result of such assessments and decisions. Brocade is required to perform goodwill impairment tests on an annual basis and between annual tests in certain circumstances, and future goodwill impairment tests may result in a charge to earnings. Brocade conducted its annual goodwill impairment test during the second fiscal quarter of 2012, and determined that no impairment needed to be recorded (see Note 3, “Goodwill and Intangible Assets,” of the Notes to Consolidated Financial Statements, and sensitivity analysis performed in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations). If future goodwill impairment tests result in a charge to earnings, Brocade's financial results would be adversely affected.

Brocade has determined that more-likely-than-not it will realize its deferred tax assets based on positive evidence of its historical operations and projections of future income. Accordingly, Brocade only applies a valuation allowance on the deferred tax assets relating to capital loss carryforwards. In the event future income by jurisdiction is less than what is currently projected, Brocade may be required to apply a valuation allowance to these deferred tax assets in jurisdictions where realization of such assets are no longer more-likely-than-not. For example, on November 6, 2012, California voters approved Proposition 39 which mandates single sales factor apportionment for most multi-state taxpayers. This law would reduce Brocade's future income apportioned to California, making it less likely to realize California deferred tax assets. As a result, during the first quarter of fiscal year 2013, Brocade will record a charge of up to $78.0 million to reduce its previously recognized California

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deferred tax assets. This charge will not impact cash tax outlays and conformance to the new California apportionment rules is not expected to have a material impact on Brocade's future tax provision (see discussion in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, and also Notes 13, “Income Taxes,” and 19, “Subsequent Events,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of the Form 10-K).

Brocade's estimates relating to the liabilities for excess facilities are also affected by changes in real estate market conditions. In addition, Brocade has made investments in certain private companies which could become impaired, requiring a write-down of current value of such investments and a charge to earnings, if the operating results of those companies change adversely.

The failure to accurately forecast demand for Brocade's products or the failure to successfully manage the production of Brocade's products could increase Brocade's product cost or adversely affect Brocade's ability to manufacture and sell Brocade's products.

Brocade provides product forecasts to its contract manufacturers and places purchase orders with them in advance of the scheduled delivery of products to Brocade's customers. In preparing sales and demand forecasts, Brocade relies largely on input from its sales force, partners, resellers and end-user customers. Therefore, if Brocade or these third-party partners are unable to accurately forecast demand, or if Brocade fails to effectively communicate with its distribution partners about end-user demand or other time-sensitive information, the sales and demand forecasts may not reflect the most accurate, up-to-date information. If these forecasts are inaccurate, Brocade may be unable to obtain adequate manufacturing capacity from its contract manufacturers to meet customers' delivery requirements or Brocade may accumulate excess inventories. Furthermore, Brocade may not be able to identify forecast discrepancies until late in its fiscal quarter. Consequently, Brocade may not be able to make timely adjustments to its business model. If Brocade is unable to obtain adequate manufacturing capacity from its contract manufacturers, or if Brocade is unable to make necessary adjustments to Brocade's business model to offset forecast discrepancies, revenue may be delayed or even lost to Brocade's competitors and Brocade's business and financial results may be harmed. If excess inventories accumulate, Brocade's gross margins may be negatively impacted by write-downs for excess and/or obsolete inventory. In addition, Brocade may experience higher fixed costs as it expands its contract manufacturer capabilities for forecast demand, which could negatively affect Brocade's margins because Brocade will not be able to react quickly to reduce fixed costs if demand suddenly decreases.

Brocade's ability to accurately forecast demand also may become increasingly more difficult as Brocade introduces new or enhanced products, begins phasing out certain products, or acquires other companies or businesses. Forecasting demand for products that are nearing end of life or are being replaced by new versions, and decreasing production on these older products, while at the same time ramping up production on the new products, may be difficult. Brocade may be unable to obtain adequate supply of new product components and/or manufacturing capacity from its contract manufacturers to meet customers' delivery requirements and such a situation may negatively impact revenues. Brocade may also accumulate excess inventories that may negatively impact gross margins due to write-downs for excess and/or obsolete inventory.

In addition, although the purchase orders placed with Brocade's contract manufacturers are cancelable in certain circumstances, if Brocade cancels any of its contract manufacturer (“CM”) purchase orders, Brocade could be required to purchase certain unused material of the CM if that material is not returnable, usable by, or sold to other customers. This purchase commitment exposure is particularly high in periods of new product introductions and product transitions. If Brocade is required to purchase unused material from Brocade's contract manufacturers, Brocade could incur unanticipated expenses, including write-downs for excess and/or obsolete inventory, and Brocade's business and financial results could be negatively affected. In the past, Brocade has experienced delays in shipments of its IP networking products from its contract manufacturers and OEMs, which in turn delayed product shipments to its customers. Brocade may in the future experience similar delays or other problems, any of which could harm Brocade's business and operating results.

Brocade's revenues and operating results and financial position may fluctuate in future periods due to a number of factors, which make predicting results of operations difficult and could adversely affect the trading price of Brocade's stock.

Information technology spending is subject to cyclical and uneven fluctuations. It can be difficult to predict the degree to which the seasonality and uneven sales patterns of Brocade's OEM partners or other customers will affect Brocade's business in the future, particularly as Brocade releases new products. While Brocade's first and fourth fiscal quarters have typically been seasonally stronger quarters than its second and third fiscal quarters, particularly for SAN products, future buying patterns may differ from historical seasonality. In addition, the United States federal budget for government IT spending can be subject to delay, reductions and uncertainty from time to time due to political and legislative volatility, which can cause Brocade's financial results to fluctuate unevenly and unpredictably.

Uneven sales patterns are not only difficult to predict, but also can result in irregular shipment patterns that can cause shortages or underutilized capacity, increase costs due to higher inventory levels, and otherwise adversely impact inventory

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planning. For example, Brocade's IP networking business has experienced significantly higher levels of sales towards the end of a period. Orders received towards the end of the period may not ship within the period due to Brocade's manufacturing lead times. This exposes Brocade to additional inventory risk because Brocade must order products in anticipation of expected future orders and additional sales risk if Brocade is unable to fulfill unanticipated demand.

Brocade's quarterly and annual revenues and operating results and financial position may vary significantly in the future due to the factors noted above as well as other factors, including but not limited to, the following:

• Receipt of a high number of customer orders towards the end of a fiscal quarter will increase reported receivables outstanding as a fraction of reported sales for the period and result in higher days sales outstanding;

• Disruptions, or a continued decline, in general economic conditions, as well as potential impacts from lower IT spending if the Budget Control Act of 2011 goes into effect in the U.S. on December 31, 2012, particularly in the information technology industry and U.S. federal government budget cycles, especially governmental departments such as the Department of Defense and certain intelligence agencies that are likely to be negatively impacted by budget reductions and where Brocade's revenue is highly concentrated;

• Protracted delays in identifying and hiring a new chief executive officer and head of worldwide sales;

• Announcements and/or rumors of pending or completed acquisitions or other strategic transactions by Brocade, its competitors or its partners;

• Announcements, introductions and transitions of new products by Brocade, its competitors or its partners;

• The timing of customer orders, product qualifications and product introductions of Brocade's partners;

• Long and complex sales cycles;

• Internal supply and inventory management objectives of Brocade's OEM partners and other customers;

• Brocade's ability to timely produce products that comply with new environmental restrictions or related requirements of its customers;

• Brocade's ability to obtain sufficient supplies of sole- or limited-sourced components, including ASICs, microprocessors, certain connectors, certain logic chips and programmable logic devices;

• Availability of supply or increases in prices of components used in the manufacture of Brocade's products;

• Variations in the mix of Brocade's products sold and the mix of distribution channels and geographies through which they are sold;

• Pending or threatened litigation, including any settlements or judgments related to such litigation;

• Stock-based compensation expense that is affected by Brocade's stock price;

• Examinations by government tax authorities that may have unfavorable outcomes and subject Brocade to additional tax liabilities;

• New legislation and regulatory developments, including increases to tax rates or changes to treatment of an income or expense item; and

• Other risk factors detailed in this section.

Accordingly, Brocade's quarterly and annual revenues and operating results may vary significantly in the future. The results of any prior periods should not be relied upon as an indication of future performance. Brocade cannot assure you that in future quarters, Brocade's revenues or operating results will not be below Brocade's projections or the expectations of stock market analysts or investors, which could cause Brocade's stock price to decline.

Brocade has extensive international operations, which subjects it to additional business risks.

Brocade has significant international operations and a significant portion of Brocade's sales occur in international jurisdictions. In addition, Brocade's contract manufacturers have significant operations in China. Brocade plans to continue to expand its international operations and sales activities. Brocade's international sales of its IP networking products have primarily depended on a variety of its resellers, including Tech Data Corporation and Avnet Inc. in Europe and Net One Systems in Japan. The failure by international resellers to sell Brocade's products could limit its ability to sustain and grow revenue. Maintenance or expansion of international sales or international operations involves inherent risks that Brocade may not be able to control, including:

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• Exposure to economic instability or fluctuations in international markets that could cause reductions in customer and public sector IT spending;

• Exposure to inflationary risks in China and the continuing sovereign debt risk and economic instability in Europe;

• Reduced or limited protection of intellectual property rights, particularly in jurisdictions that have less developed intellectual property regimes such as China and India;

• Managing research and development teams in geographically diverse locations, including teams divided between the United States and India;

• Significant wage inflation in certain growing economies such as India;

• Increased exposure to foreign currency exchange rate fluctuations, including the appreciation of foreign currencies such as the Chinese yuan or European Union's euro;

• Communicating effectively across multiple geographies, cultures and languages;

• Recruiting sales and technical support personnel with the skills to design, manufacture, sell and support Brocade's products in international markets;

• Complying with governmental regulation of encryption technology and regulation of imports and exports, including obtaining required import or export approval for its products;

• Increased complexity and costs of managing international operations;

• Commercial laws and business practices that favor local competition;

• Multiple, potentially conflicting, and changing governmental laws, regulations and practices, including differing export, import, tax, labor, anti-bribery and employment laws;

• Longer sales cycles and manufacturing lead times;

• Increased complexity and cost of providing customer support and maintenance for international customers;

• Difficulties in collecting accounts receivable; and

• Increased complexity of logistics and distribution arrangements.

Failure to manage effectively our international operations or expansion of those operations could seriously harm Brocade's business, financial condition and prospects. In addition, international political instability may halt or hinder Brocade's ability to do business and may increase Brocade's costs. Various events, including the occurrence or threat of terrorist attacks, increased national security measures in the United States and other countries, and military action and armed conflicts, may suddenly increase international tensions. Such events may have an adverse effect on the world economy and could adversely affect Brocade's business operations or the operations of Brocade's OEM partners, end-user customers and channel customers, contract manufacturers and suppliers.

To date, no material amount of Brocade's international revenues and cost of revenues have been denominated in foreign currencies. As a result, an increase in the value of the U.S. dollar relative to foreign currencies could make Brocade's products more expensive and, thus, not competitively priced in foreign markets. Additionally, a decrease in the value of the U.S. dollar relative to foreign currencies could increase Brocade's product and operating costs in foreign locations (e.g., appreciation of the European Union's euro, Chinese yuan and Indian rupee). In the future, a larger portion of Brocade's international revenues may be denominated in foreign currencies, which will subject Brocade to additional risks associated with fluctuations in those foreign currencies. In addition, Brocade may be unable to successfully hedge against any such fluctuations.

Brocade may not realize the anticipated benefits of past or future acquisitions, divestitures and strategic investments, and integration of acquired companies or technologies or divestiture of businesses may negatively impact Brocade's overall business.

Brocade has in the past acquired, or made strategic investments in, other companies, products or technologies, for example, Brocade acquired Foundry in December 2008 and most recently acquired Vyatta in November 2012, and Brocade expects to make additional acquisitions and strategic investments in the future. Brocade may not realize the anticipated benefits of any of its acquisitions or strategic investments, which involve numerous risks, including:

• Difficulties in successfully integrating the acquired businesses and realizing any expected synergies;

• Inability to effectively coordinate sales and marketing efforts to communicate the capabilities of the combined company;

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• Customer uncertainty that may cause delays or cancellations of customer purchases, as well as revenue attrition in excess of anticipated levels if existing customers alter or reduce their historical buying patterns;

• Unanticipated costs, litigation and other contingent liabilities;

• Diversion of management's attention from Brocade's daily operations and business;

• Adverse effects on existing business relationships with suppliers and customers;

• Risks associated with entering into markets in which Brocade has limited or no prior experience, including potentially less visibility into demand;

• Inability to attract and retain key employees;

• Inability to retain key customers, distributors, vendors and other business partners of the acquired business;

• Inability to successfully develop new products and services on a timely basis that address the market opportunities of the combined company;

• Inability to compete effectively against companies already serving the broader market opportunities expected to be available to the combined company;

• Inability to qualify the combined company's products with OEM partners on a timely basis, or at all;

• Inability to successfully integrate and harmonize financial reporting and information technology systems;

• Failure to successfully manage additional remote locations, including the additional infrastructure and resources necessary to support and integrate such locations;

• Assumption or incurrence of debt and contingent liabilities and related obligations to service such liabilities and Brocade's ability to satisfy financial and other negative operating covenants;

• Additional costs such as increased costs of manufacturing and service costs, costs associated with excess or obsolete inventory, costs of employee redeployment, relocation and retention, including salary increases or bonuses, accelerated amortization of deferred equity compensation and severance payments, reorganization or closure of facilities, taxes, advisor and professional fees, and termination of contracts that provide redundant or conflicting services;

• Incurrence of significant exit charges if products acquired in business combinations are unsuccessful;

• Incurrence of significant charges if Brocade divests, disposes of or otherwise exits all or part of a business;

• Incurrence of acquisition and integration related costs, accounting charges, or amortization costs for acquired intangible assets, that could negatively impact Brocade's operating results and financial condition; and

• Potential write-down of goodwill, acquired intangible assets and/or deferred tax assets, which are subject to impairment testing on an annual basis, and could significantly impact Brocade's operating results.

Brocade may also divest certain businesses from time to time. Such divestitures will likely involve risks, such as difficulty splitting up businesses, distracting employees, potential loss of revenue and negatively impacting margins, and potentially disrupting customer relationships.

If Brocade is not able to successfully integrate or divest businesses, products, technologies or personnel that Brocade acquires or divests, or to realize expected benefits of Brocade's acquisitions, divestitures or strategic investments, Brocade's business and financial results would be adversely affected.

Brocade is subject to, and may in the future be subject to other, intellectual property infringement claims and litigation that are costly to defend and/or settle, and that could result in significant damage and cost awards against Brocade and limit Brocade's ability to use certain technologies in the future.

Brocade competes in markets that are frequently subject to claims and related litigation regarding patent and other intellectual property rights. From time to time, third parties have asserted patent, copyright, trade secret, and/or other intellectual property related claims against Brocade and/or employees of Brocade. These claims may be, and have been in the past, made against Brocade's products and services, subcomponents of its products, methods performed by its products, or a combination of products, including third party products, methods used in its operations or uses of its products by its customers, or may concern Brocade's hiring of a former employee of the third party claimant. Brocade and companies acquired by Brocade, such as Foundry, have in the past incurred, are currently incurring, and will in the future incur, substantial expenses to defend against such third-party claims. For instance, Brocade currently is defending patent-related lawsuits, including lawsuits

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filed by A10 and Enterasys Networks, Inc. Brocade's suppliers and customers also may be subject to third party intellectual property claims, which could negatively impact their ability to supply Brocade or their willingness to purchase from Brocade, respectively. In addition, Brocade may be subject to claims and indemnification obligations with respect to third-party intellectual property rights pursuant to Brocade agreements with suppliers, OEM and channel partners, or customers. The third party asserters of such intellectual property claims may be unreasonable in their demands, or may simply refuse to settle, which could lead to expensive settlement payments, prolonged periods of litigation expenses, additional burden on employees or other resources, distraction from Brocade's business initiatives and operations, component supply stoppages and lost sales.

In the event of an adverse determination, Brocade could incur substantial monetary liability and be prohibited from utilizing certain intellectual property or technology, hiring certain people, selling, shipping, importing or servicing certain products or incorporating necessary components into Brocade's products. Suppliers of components or OEM systems to Brocade may be unwilling to, or not be able to, defend or indemnify Brocade against third party assertions directed at, or based in part on, the components or systems they supply to Brocade, and may be unwilling to take licenses that would assure Brocade's supply of such components or OEM systems. Suppliers subject to third party intellectual property claims also may choose to, or be forced by litigation to, discontinue or alter components or services supplied to Brocade, with little or no advance notice to Brocade. Customers may perceive such third-party intellectual property claims as risks, and may, as a result, be less willing to do business with Brocade. Such third party claims or litigation could also negatively impact Brocade's recruiting efforts or ability to retain its employees. Any of the above scenarios could have a material adverse effect on Brocade's financial position, results of operations, cash flows, and future business prospects.

Brocade's intellectual property rights may be infringed or misappropriated by others, and Brocade may not be able to protect or enforce its intellectual property rights.

Brocade's intellectual property rights may be infringed or misappropriated by others. In some cases, such infringement or misappropriation may be undetectable, or enforcement of Brocade's rights may be impractical. From time to time, Brocade sends notice to third parties to assert its intellectual property rights and to request that those third parties take steps to address Brocade's concerns. In addition, Brocade has filed, and may in the future file, lawsuits against third parties in an effort to enforce its intellectual property rights. For instance, in the fourth quarter of fiscal year 2010, Brocade filed a patent infringement, copyright infringement, trade secret misappropriation and unfair competition lawsuit against A10 and certain individuals and, although Brocade received a favorable result, the appeals process is expected to continue (see Note 9, "Commitments and Contingencies," of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K). Intellectual property litigation is expensive and unpredictable. There can be no assurance that Brocade will prevail in such assertions or enforcement efforts, either on the merits, or with respect to particular relief sought, such as damages or an injunction. Further, the opposing party may attempt to prove that the asserted intellectual property rights are invalid or unenforceable, and, if successful, may seek recompense for its attorney fees and costs. Further, the opposing party may counterclaim against Brocade, for example, for infringement of its own patents or other intellectual property rights, or may assert other tort or contract claims, which could lead to further expense and potential exposure for Brocade.

Brocade relies on a combination of patent, copyright, trademark and trade secret laws, and measures such as physical and operational security and contractual restrictions, to protect its intellectual property rights in its proprietary technologies, but none of these methods of protection may be entirely appropriate to address the particular risk, or reliable, due to, for instance, employee hiring and turnover, geographic dispersion of employees, technology disclosures with suppliers, customers, and partners, unpredictable events, misappropriation or negligence, operations in various countries that do not have well-established or reliable enforcement institutions or customs, or other aspects of doing business on the scale of Brocade's operations. The measures Brocade has taken to protect its intellectual property rights in its proprietary technologies including, for instance, by contractual, security, patent or trademark applications, or other means, may prove inadequate, which could result in a loss of intellectual property rights. Brocade attempts to identify its technological developments for assessment of whether to file patent applications, but there can be no assurance that all patentable technological developments will be captured in patent applications. Further, although Brocade has patent applications pending, there can be no assurance that patents will be issued from pending applications, or that claims allowed on any future patents will be sufficiently broad to protect its technology. Further, physical and operational security can be adversely affected, and associated policies and training rendered ineffective, by employee attitudes, carelessness or disregard for policies, malfeasors or changes in technology, such as the now-near-ubiquitous availability of portable memory devices, or cyber attacks due to the rise of the Internet. In addition, due to less developed intellectual property regimes in certain jurisdictions, Brocade may not be able to protect fully its intellectual property as Brocade expands its operations globally.

Brocade relies on licenses from third parties and the loss or inability to obtain any such license could harm its business.

Many of Brocade's products are designed to include software or other intellectual property licensed from third parties. While it may be necessary in the future to seek or renew licenses relating to various aspects of its products, Brocade believes

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that, based upon past experience and standard industry practice, such licenses generally can be obtained on commercially reasonable terms. Nonetheless, there can be no assurance that the necessary licenses will be available on acceptable terms, if at all. Brocade's inability to obtain certain licenses or other rights on favorable terms could have an adverse effect on Brocade's business, operating results and financial condition, including its ability to continue to distribute or support affected products.

In addition, if Brocade has failed or in the future fails to adequately manage the use of “open source” software in Brocade's products, or if companies acquired by Brocade, such as Foundry, McDATA or Vyatta, failed in such regard, Brocade may be required to license key portions of Brocade's products on a royalty-free basis or expose key parts of source code, or to commence costly product redesigns, which could result in a loss of intellectual property rights, product performance degradation or delay in shipping products to customers.

Brocade is dependent on sole source and limited source suppliers for certain key components, the loss of which may significantly impact results of operations.

Although Brocade uses standard parts and components for its products where possible, Brocade's contract manufacturers currently purchase, on Brocade's behalf, several key components used in the manufacture of its products from single or limited supplier sources. Brocade's single source components include, but are not limited to, its ASICs, and Brocade's principal limited source components include memory, certain oscillators, microprocessors, certain connectors, certain logic chips, power supplies, programmable logic devices, printed circuit boards, certain optical components, packet processors and switching fabrics. Brocade generally acquires these components through purchase orders and has no long-term commitments regarding supply or pricing with such suppliers. If Brocade is unable to obtain these and other components when required, or if Brocade experiences component defects, Brocade may not be able to deliver Brocade's products to Brocade's customers in a timely manner and may be required to repair or retro-fit products previously delivered to customers at significant expense to Brocade. In addition, a challenging economic or industry environment could cause some of these sole source or limited source suppliers to delay or halt production or to go out of business or be acquired by third parties, which could result in a disruption in Brocade's supply chain. Brocade's supply chain could also be disrupted in a variety of other circumstances that may impact its suppliers and partners, including adverse results from intellectual property litigation or natural disasters. Any manufacturing disruption by these sole source or limited source suppliers could severely impair Brocade's ability to fulfill orders. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 Section 1502 (the “Dodd-Frank Act”) requires certain public companies to disclose whether certain minerals, commonly known as “conflict minerals,” are necessary to the functionality or production of a product manufactured by those companies and if those minerals originated in the Democratic Republic of the Congo (DRC) or an adjoining country. It may be possible that conflict minerals may be part of the supply chain in the electronics industry and contained in Brocade’s products. To comply with the Dodd-Frank Act, as determined by the U.S. Securities and Exchange Commission, Brocade will be required to perform due diligence and disclose whether or not its products contain such minerals and from which countries and source (smelter) the minerals were obtained. The implementation of these requirements by government regulators and Brocade’s partners and/or customers could adversely affect the sourcing, availability, and pricing of minerals used in the manufacture of certain components used in Brocade’s products. In addition, Brocade will incur additional costs to comply with the disclosure requirements for conflict minerals, including costs related to determining the source of any of the relevant minerals and metals used in our products. As a result, Brocade's business and financial results could be harmed.

In addition, the loss of any of Brocade's major third-party contract manufacturers, or portions of their capacity, could significantly impact Brocade's ability to produce its products for an indefinite period of time. Qualifying a new contract manufacturer and commencing volume production is typically a lengthy and expensive process. If Brocade changes any of its contract manufacturers or if any of its contract manufacturers experience delays, disruptions, capacity constraints, component parts shortages or quality control problems in its manufacturing operations, shipment of Brocade's products to Brocade's customers could be delayed and result in loss of revenues and Brocade's competitive position and relationship with customers could be harmed.

Undetected software or hardware errors could increase Brocade's costs, reduce Brocade's revenues and delay market acceptance of Brocade's products.

Networking products frequently contain undetected software or hardware errors, or bugs, when first introduced or as new versions are released. Brocade's products are becoming increasingly complex and particularly, as Brocade continues to expand its product portfolio to include software-centric products, including software licensed from third parties, errors may be found from time to time in Brocade's products. In addition, through its acquisitions, Brocade has assumed, and may in the future assume, products previously developed by an acquired company that have not been through the same level of product development, testing and quality control processes used by Brocade, and may have known or undetected errors. Some types of errors may not be detected until the product is installed in a heavy production or user environment. In addition, Brocade's products are often combined with other products, including software, from other vendors, and these products often need to

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interface with existing networks, each of which have different specifications and utilize multiple protocol standards and products from other vendors. As a result, when problems occur, it may be difficult to identify the source of the problem. These problems may cause Brocade to incur significant warranty and repair costs, may divert the attention of engineering personnel from product development efforts, and may cause significant customer relations problems such as reputational problems with customers. Moreover, the occurrence of hardware and software errors, whether caused by another vendor's storage, data management or IP Networking products or Brocade's, could delay market acceptance of Brocade's new products.

Brocade's business is subject to increasingly complex corporate governance, public disclosure, accounting and tax requirements, and environmental regulations that could adversely affect Brocade's business and financial results.

Brocade is subject to changing rules and regulations of federal and state government as well as the stock exchange on which Brocade's common stock is listed. These entities, including the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, the SEC, the IRS and NASDAQ, have issued a significant number of new and increasingly complex requirements and regulations over the course of the last several years and continue to develop additional regulations and requirements in response to laws enacted by Congress. In addition, the Department of Treasury, the SEC and various Congressional representatives have recently proposed additional rules and regulations that may go into effect in the near future. In 2010, the Dodd-Frank Wall Street Reform and Protection Act was enacted. The Act included significant corporate governance and executive compensation-related provisions and also required the SEC to adopt additional rules and regulations in areas such as “say on pay” and proxy access. Brocade is also subject to various rules and regulations of certain foreign jurisdictions, including applicable tax regulations. Brocade's efforts to comply with these requirements have resulted in, and are likely to continue to result in, an increase in expenses and a diversion of management's time from other business activities. Similarly, any change in the tax law in the jurisdictions in which Brocade does business, including an increase in tax rates or an adverse change in the treatment of an item of income or expense, could result in a material increase in Brocade's tax expense. For example, the federal credit for research and experimentation expired on December 31, 2011, resulting in an increase to Brocade's overall tax rate. In addition, in the 2012 and 2013 budget proposals, the President of the United States and the U.S. Treasury Department have proposed changing certain of the U.S. tax rules for U.S. corporations doing business outside the United States. Furthermore, California Proposition 39 was passed in the November 2012 general elections and will affect future state income tax apportionment and will have a significant impact on our ability to realize California deferred tax assets, resulting in an impairment of these assets and a charge to earnings during the first quarter of fiscal year 2013. This charge will not impact cash tax outlays and conformance to the new California apportionment rules is not expected to have a material impact on Brocade's future tax provision (see discussion in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, and also Notes 13, “Income Taxes,” and 19, “Subsequent Events,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of the Form 10-K). With increasing discussions around overall U.S. tax reform, and other legislation that have not yet been proposed or enacted, these or other changes in the federal or state tax laws could increase Brocade's U.S. income tax liability in the future.

Brocade is subject to periodic audits or other reviews by such governmental agencies. For example, in the second quarter of fiscal 2012, Brocade accepted a notice of proposed adjustment issued by the IRS to settle its federal research and experimentation tax credit for fiscal years 2009 and 2010. However, Brocade is still under examination by the IRS for fiscal years 2007 through 2010 and in several state and foreign tax jurisdictions for various years. All of these examination cycles remain open as of October 27, 2012. To the extent federal and state carryforwards from closed tax years are used in the future, the tax authorities have the right to audit the carryforward amounts. These examinations frequently require management's time and diversion of internal resources and, in the event of an unfavorable outcome, may result in additional liabilities or adjustments to Brocade's historical financial results.

The IRS has contested Brocade's transfer pricing for the cost sharing and buy-in arrangements with its foreign subsidiaries. Brocade appealed the Revenue Agent's Report to the Appeals Office of the IRS for the fiscal years 2007 and 2008. The IRS may make similar claims against Brocade's transfer pricing arrangements for fiscal years 2009 and 2010 and in future examinations. Audits by the IRS are subject to inherent uncertainties and an unfavorable outcome could occur, such as fines or penalties. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on Brocade's results of operations for that period or future periods. The expense of defending and resolving such an audit may be significant. The amount of time to resolve an audit is unpredictable and defending Brocade may divert management's attention from Brocade's day-to-day business operations, which could adversely affect its business.

Brocade is subject to various environmental and other regulations governing product safety, materials usage, packaging and other environmental impacts in the various countries where Brocade's products are sold. For example, many of Brocade's products are subject to laws and regulations that restrict the use of lead, mercury, hexavalent chromium, cadmium and other substances, and require producers of electrical and electronic equipment to assume responsibility for collecting, treating, recycling and disposing of Brocade's products when they have reached the end of their useful life.

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For example, in Europe, substance restrictions apply to products sold, and certain of Brocade's partners require compliance with these or more stringent requirements. In addition, recycling, labeling, financing and related requirements apply to products Brocade sells in Europe. China has also enacted similar legislation with similar requirements for Brocade's products or its partners. Despite Brocade's efforts to ensure that its products comply with new and emerging requirements, Brocade cannot provide absolute assurance that its products will, in all cases, comply with such requirements. If Brocade's products do not comply with the substance restrictions under local environmental laws, Brocade could become subject to fines, civil or criminal sanctions and contract damage claims. In addition, Brocade could be prohibited from shipping non-compliant products into one or more jurisdictions and required to recall and replace any non-compliant products already shipped, which would disrupt its ability to ship products and result in reduced revenue, increased obsolete or excess inventories, and harm to Brocade's business and customer relationships. Brocade's suppliers may also fail to provide it with compliant materials, parts and components despite Brocade's requirement to do so, which could impact Brocade's ability to timely produce compliant products and, accordingly, could disrupt its business.

Business interruptions could adversely affect Brocade's business.

Brocade's operations and the operations of its suppliers, contract manufacturers and customers are vulnerable to interruptions by fire, earthquake, tsunami, nuclear reactor leak, hurricane, power loss, telecommunications failure and other events beyond Brocade's control. For example, a substantial portion of Brocade's facilities, including its corporate headquarters, is located near major earthquake faults. Brocade does not have multiple site capacity for all of its services in the event of any such occurrence. In the event of a major earthquake, Brocade could experience business interruption, destruction of facilities and loss of life. Brocade carries a limited amount of earthquake insurance, which may not be sufficient to cover earthquake-related losses, and has not set aside funds or reserves to cover other potential earthquake-related losses. Additionally, major public health issues such as an outbreak of a pandemic or epidemic may interrupt business operations of Brocade or its suppliers in those geographic regions affected by that particular health issue. In addition, one of Brocade's contract manufacturers has a major facility located in an area that is subject to hurricanes, and Brocade's suppliers could face other natural disasters, such as flood, earthquake, weather and fire. In the event that a material business interruption occurs that affects Brocade, its suppliers, contract manufacturers or customers, shipments could be delayed and Brocade's business and financial results could be harmed. Brocade's servers may be vulnerable to computer viruses, break-ins, and similar disruptions from unauthorized tampering with its computer systems despite Brocade's implementation of network security measures. Brocade may not successfully limit attacks by malicious third parties if they attempt to undermine or disrupt Brocade's network security. Any such event could have a material adverse effect on Brocade's business, operating results and financial condition, and could expose Brocade to significant third party claims of liability and damages. In addition, Brocade may suffer reputational harm and may not carry sufficient insurance to compensate for financial losses that may occur as a result of any of these events.

Brocade is exposed to various risks related to legal proceedings or claims that could adversely affect its operating results.

Brocade is a party to lawsuits in the normal course of its business. Litigation in general can be expensive, lengthy and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. Responding to lawsuits brought against Brocade, or legal actions initiated by Brocade, can often be expensive and time-consuming. Unfavorable outcomes from these claims and/or lawsuits could adversely affect Brocade's business, results of operations, or financial condition, and Brocade could incur substantial monetary liability and/or be required to change its business practices.

Brocade has incurred substantial indebtedness that decreases Brocade's business flexibility and access to capital, and increases its borrowing costs, which may adversely affect Brocade's operations and financial results.

As of October 27, 2012, Brocade owed $600 million of senior secured notes (see Note 8, “Borrowings,” of the Notes to Consolidated Financial Statements). The financial and other covenants agreed to by Brocade in connection with such indebtedness have the effect, among other things, of reducing Brocade's flexibility to respond to changing business and economic conditions and increasing borrowing costs, and may adversely affect Brocade's operations and financial results. This indebtedness may also adversely affect Brocade's ability to access sources of capital or incur certain liens, including without limitation, funding acquisitions or repurchasing Brocade stock.

In addition, Brocade's failure to comply with these covenants could result in a default under any applicable debt financing agreements, which could permit the holders to accelerate such debt or demand payment in exchange for a waiver of such default. If any of Brocade's debt is accelerated, Brocade may not have sufficient funds available to repay such debt. In addition, any negative changes by rating agencies to Brocade's credit rating may negatively impact the value and liquidity of Brocade's debt and equity securities and Brocade's ability to access sources of capital.

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Provisions in Brocade's charter documents, customer agreements and Delaware law could prevent or delay a change in control of Brocade, which could hinder stockholders' ability to receive a premium for Brocade's stock.

Provisions of Brocade's certificate of incorporation and bylaws may discourage, delay or prevent a merger or mergers that a stockholder may consider favorable. These provisions include:

•Authorizing the issuance of preferred stock without stockholder approval;

•Prohibiting cumulative voting in the election of directors;

•Limiting the persons who may call special meetings of stockholders; and

•Prohibiting stockholder actions by written consent.

Certain provisions of Delaware law also may discourage, delay or prevent someone from acquiring or merging with Brocade, and Brocade's agreements with certain of Brocade's customers require that Brocade give prior notice of a change of control and grant certain manufacturing rights following a change of control. Brocade's various change-of-control provisions could prevent or delay a change in control of Brocade, which could hinder stockholders' ability to receive a premium for Brocade's stock.

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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Brocade’s principal administrative, sales, marketing, education, customer support, and research and development facilities include approximately 562,000 square feet owned by Brocade in San Jose, California. Additional administrative and research and development facilities are located in an aggregate of approximately 322,000 square feet in Broomfield, Colorado, Plymouth, Minnesota and Bangalore, India. Approximately 154,000 square feet of such space is leased and 168,000 square feet is owned. Brocade believes that its existing properties, including both owned and leased, are in good condition and are suitable for the conduct of its business. Brocade also productively utilizes the majority of the space in its facilities.

Brocade’s leased properties have expirations through December 2020. In addition to the noted facilities, Brocade leases approximately 414,000 square feet of administrative, sales and marketing office space in various locations to serve its customers throughout the world.

Brocade has four operating segments. Due to the interrelation of these segments, these segments use substantially all of the properties at least in part, and Brocade retains the flexibility to use each of the properties in whole or in part for each of the segments.

Brocade’s properties are subject to a perfected first interest in and mortgages on its tangible and intangible assets as further described in Note 8, “Borrowings,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.

Item 3. Legal Proceedings

The information set forth in Note 9, “Commitments and Contingencies” (see “Legal Proceedings” of Note 9) of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K is incorporated herein by reference.

Item 4. Mine Safety Disclosures

None.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Brocade’s common stock is listed on the NASDAQ Global Select Market under the symbol “BRCD.” Information regarding the high and low closing sales prices per share of Brocade’s common stock as reported on the NASDAQ Global Select Market for each full quarterly period for the last two fiscal years is set forth in “Quarterly Summary” in Part II, Item 8 of this Form 10-K. According to records of Brocade’s transfer agent, Brocade had 853 stockholders of record as of December 7, 2012 and it believes there are a substantially greater number of beneficial holders. Brocade has never declared or paid any dividends on its common stock. Brocade currently expects to retain any future earnings for use in the operation and expansion of its business, manage its secured debt, and repurchase the Company’s stock and does not anticipate paying any dividends in the foreseeable future. Information with respect to restrictions on paying dividends is set forth in Note 8, “Borrowings,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.

There were no unregistered sales of equity securities during the three months ended October 27, 2012.

Issuer Purchases of Equity Securities

The following table summarizes share repurchase activity for the three months ended October 27, 2012 (in thousands, except per share amounts):

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
July 29, 2012 – August 25, 2012	5,861	$	5.13	5,861	$	578,232
August 26, 2012 – September 22, 2012	—	$	—	—	$	578,232
September 23, 2012 – October 27, 2012	5,335	$	5.62	5,335	$	548,233
Total	11,196	$	5.36	11,196	$	548,233

(1) As of October 27, 2012, Brocade’s Board of Directors had authorized a stock repurchase program for an aggregate amount of up to $1.3 billion (consisting of an original $100 million authorization on August 18, 2004, plus subsequent authorizations of an additional $200 million on January 16, 2007, $500 million on November 29, 2007 and $500 million on May 16, 2012), which was used for determining the amounts in this column. The number of shares purchased and the timing of purchases are based on the level of the Company’s cash balances, the trading price of our common stock, general business and market conditions, and other factors, including alternative investment opportunities.

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Stock Performance Graph

The graph below shows a comparison for the period commencing on October 26, 2007 and ending on October 27, 2012 of the annual percentage change in the cumulative total stockholder return for Brocade common stock, assuming the investment of $100.00 on October 26, 2007, with the cumulative total stockholder returns for the NASDAQ Composite Index and the NASDAQ Telecommunications Index, assuming the investment of $100.00 respectively on October 26, 2007. The stockholder returns over the indicated periods below are weighted based on market capitalization at the beginning of each measurement point and are not indicative of, or intended to forecast, future performance of Brocade’s common stock. Data for the NASDAQ Composite Index and the NASDAQ Telecommunications Index assume reinvestment of dividends and was prepared based on publicly available information.

	10/26/2007	10/25/2008	10/31/2009	10/30/2010	10/29/2011	10/27/2012
Brocade Communications Systems, Inc.	100	34	95	70	50	59
NASDAQ Composite	100	56	74	92	101	112
NASDAQ Telecommunications	100	49	69	78	70	64

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Item 6. Selected Financial Data

The following selected financial data should be read in conjunction with the Consolidated Financial Statements and related notes, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and other financial information appearing elsewhere in this Annual Report on Form 10-K. The information set forth below is not necessarily indicative of Brocade’s future financial condition or results of operations.

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010		October 31, 2009 (1)			October 25, 2008 (2)
	(In thousands, except per share amounts)
Selected Financial Data:
Net revenues	$	2,237,770	$	2,147,442	$	2,091,153	$	1,950,376		$	1,463,246
Net income (loss)	$	195,181	$	50,610	$	116,523	$	(83,189	)	$	166,367
Net income (loss) per share—basic	$	0.43	$	0.11	$	0.26	$	(0.21	)	$	0.44
Net income (loss) per share—diluted	$	0.41	$	0.10	$	0.24	$	(0.21	)	$	0.43
Shares used in per share calculation—basic	456,629		474,259		446,996		398,948			375,303
Shares used in per share calculation—diluted	472,343		497,030		482,741		398,948			385,641
Net cash provided by operating activities	$	590,870	$	449,232	$	298,513	$	115,562		$	438,495
Cash, cash equivalents, investments, and marketable equity securities	$	713,226	$	414,976	$	335,982	$	338,871		$	820,125
Total assets	$	3,581,261	$	3,474,308	$	3,646,012	$	3,665,625		$	3,301,287
Non-current liabilities associated with facilities lease losses	$	1,606	$	2,496	$	3,984	$	10,150		$	15,007
Term loan	$	—	$	186,858	$	325,897	$	898,936		$	1,055,005
Senior secured notes	$	596,264	$	595,803	$	595,373	$	—		$	—
Convertible subordinated debt	$	—	$	—	$	—	$	169,332		$	159,157
Capital lease obligations	$	4,916	$	6,782	$	8,543	$	—		$	—

(1) The fiscal year ended October 31, 2009 includes the impact of the acquisition of Foundry, which was completed in the first fiscal quarter and the nonrecurring $26.9 million in-process research and development charge in connection with this acquisition. The fiscal year ended October 31, 2009 also includes the impact of $53.3 million impairment of goodwill and intangible assets in the Files reporting unit.

(2) The fiscal year ended October 25, 2008 includes the impact of the release of the valuation allowance of deferred tax assets which resulted in a tax benefit of $174.4 million during the year ended October 25, 2008. The fiscal year ended October 25, 2008 also includes the provision for a class action lawsuit of $160.0 million relating to the settlement reached between Brocade and the lead plaintiffs for the federal securities class action on May 30, 2008.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and the related Notes included in Part II, Item 8 of this Form 10-K.

Overview

We are a leading supplier of networking equipment for businesses and organizations of many types and sizes, including global enterprises, and service providers such as telecommunication firms, cable operators and mobile carriers. Our business model is focused on two key markets, namely our Storage Area Networking ("SAN") business, where we offer Fibre Channel ("FC") SAN backbones, directors, fabrics, embedded switches, host bus adapters ("HBAs"), and server virtualization solutions, and our IP Networking business, where we offer modular and stackable solutions, Ethernet routers, Ethernet switches, Ethernet fabrics, converged adapters, as well as application delivery, security and wireless solutions.

Growth opportunities in the SAN market are expected to be driven by key customer IT initiatives such as server virtualization, enterprise mobility, data center consolidation, migration to higher performance technologies and cloud computing initiatives. Our IP Networking business strategies are intended to increase new customer accounts and expand our market share. We plan to continue to support our SAN and IP Networking growth plans by leveraging the strategic investments we have made in our core businesses and emerging technologies, continuous innovation, new product introductions, and enhancing our existing partnerships and forming new ones through our two-tier distribution channel.

We continue to face multiple challenges, including aggressive price discounting from competitors, rapid adoption of new technologies by customers, the uncertainty in the worldwide macroeconomic climate and its impact on IT spending patterns globally, as well as uncertain federal government spending in the United States. We are also cautious about the stability and health of certain international markets, including China and Europe, and current global and country specific dynamics, including inflationary risks in China and the continuing sovereign debt risk and economic uncertainty in Europe. These factors may impact our business and that of our partners. While the diversification of our business model helps mitigate the effect of some of these challenges and we expect IT spending levels to generally rise in the long-term, it is difficult to offset short-term reductions of IT spending, which may adversely affect our financial results and stock price.

We expect the number of SAN and IP Networking products we ship to fluctuate depending on the demand for our existing and recently introduced products, sales support for our products from our distribution and resale partners, as well as the timing of product transitions by our OEM partners. The average selling prices per port for our SAN and IP Networking products have typically declined over time and will likely continue to decline in the future.

Our plans for our operating cash flows are to provide liquidity for operations, to manage our secured debt and to use our operating cash flows to repurchase our stock to reduce the dilutive effects of our equity award programs and, from time-to-time, we may also opportunistically repurchase our stock under our previously announced stock repurchase programs. In addition, we may opportunistically use our operating cash flows to strengthen our networking portfolios through acquisitions and strategic investments.

Results of Operations

We report our fiscal year on a 52/53-week period ending on the last Saturday in October. As is customary for companies that use the 52/53-week convention, every fifth year contains a 53-week year. Fiscal years 2012, 2011 and 2010 were 52-week fiscal years. Our next 53-week fiscal year will be fiscal year 2014 and our next 14-week quarter will be in the second quarter of fiscal year 2014.

Our results of operations for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 are reported in this discussion and analysis as a percentage of total net revenues, except for gross margin with respect to each segment, which is indicated as a percentage of the respective segment net revenues.

Revenues. Our revenues are derived primarily from sales of our SAN products, IP Networking products, and support and services related to these products, which we call Global Services.

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Our total net revenues are summarized as follows (in thousands, except percentages):

	Fiscal Year Ended
	October 27, 2012		% of Net Revenues		October 29, 2011		% of Net Revenues		Increase/ (Decrease)			% Change
SAN Products	$	1,356,099	60.6	%	$	1,237,994	57.6	%	$	118,105		9.5	%
IP Networking Products	534,757		23.9	%	551,820		25.7	%	(17,063		)	(3.1	)%
Global Services	346,914		15.5	%	357,628		16.7	%	(10,714		)	(3.0	)%
Total net revenues	$	2,237,770	100.0	%	$	2,147,442	100.0	%	$	90,328		4.2	%

	Fiscal Year Ended
	October 29, 2011		% of Net Revenues		October 30, 2010		% of Net Revenues		Increase/ (Decrease)			% Change
SAN Products	$	1,237,994	57.6	%	$	1,240,626	59.3	%	$	(2,632	)	(0.2	)%
IP Networking Products	551,820		25.7	%	488,188		23.4	%	63,632			13.0	%
Global Services	357,628		16.7	%	362,339		17.3	%	(4,711		)	(1.3	)%
Total net revenues	$	2,147,442	100.0	%	$	2,091,153	100.0	%	$	56,289		2.7	%

The increase in total net revenues for the fiscal year ended October 27, 2012 compared with the fiscal year ended October 29, 2011 reflects higher sales of our SAN products, partially offset by lower revenues from our IP Networking products and Global Services offerings.

• The increase in SAN product revenues was driven by a shift in mix to our high-end, higher bandwidth director and switch products, including strong growth in sales of our 16 Gbps products. The number of ports shipped during the fiscal year ended October 27, 2012 increased by 3.5%, and average selling price per port increased by 5.7%.

• The decrease in IP Networking product revenues reflects lower revenues from our IP routing and application delivery products while Ethernet switching product revenue was flat year-over-year. As more of our IP Networking products are being sold through our two-tier distribution channel, it has become increasingly difficult to consistently identify the customer split of our end users. Based on our estimated customer split, revenues from our enterprise customers decreased, partially offset by an increase in revenues from both service provider and U.S. federal government customers. Our IP Networking business has been impacted by slower enterprise customer spending and the competitive enterprise environment. In addition, enterprise product revenue decreased in part due to our transition to a two-tier distribution channel model. This transition resulted in lower average selling prices through the distribution channel which was not yet compensated by an increase in distribution channel sales volumes; and

• The decrease in Global Services revenues was primarily attributed to the sale of Strategic Business Systems, Inc. ("SBS"), a wholly-owned subsidiary, in September 2011, partially offset by an increase in IP Networking support revenues.

The increase in total net revenues for the fiscal year ended October 29, 2011 compared with the fiscal year ended October 30, 2010 reflects higher sales of our IP Networking products, partially offset by lower revenues from our SAN products and Global Services offerings.

• The marginal decrease in SAN product revenues for the fiscal year ended October 29, 2011 reflects a 2.0% decrease in average selling price per port which includes the impact of lower pricing and a reduction in inventory held at our OEM partners. This decrease was slightly offset by a favorable mix shift from 4 Gb and 8 Gb director and switch products to 8 Gb and 16 Gb director and switch products, which carry a higher price per port, and by an increase of 1.9% in the number of ports shipped.

• The increase in IP Networking product revenues for the fiscal year ended October 29, 2011 reflects higher revenues from our enterprise and service provider customers, which we believe was influenced by the implementation of initiatives to drive both immediate and long-term growth in our IP Networking business. The higher enterprise and service provider revenue was partially offset by lower pricing and lower revenues from United States federal customers; and

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• The decrease in Global Services revenues for the fiscal year ended October 29, 2011 was primarily a result of lower SAN support and lower service revenues during the year as a result of the sale of SBS in September 2011, partially offset by an increase in IP Networking support revenues.

Our total net revenues by geographical area are summarized as follows (in thousands, except percentages):

	Fiscal Year Ended
	October 27, 2012		% of Net Revenues		October 29, 2011		% of Net Revenues		Increase/ (Decrease)			% Change
United States	$	1,414,390	63.2	%	$	1,313,302	61.2	%	$	101,088		7.7	%
Europe, the Middle East and Africa (1)	493,979		22.1	%	502,999		23.4	%	(9,020		)	(1.8	)%
Asia Pacific	186,244		8.3	%	212,636		9.9	%	(26,392		)	(12.4	)%
Japan	99,887		4.5	%	75,542		3.5	%	24,345			32.2	%
Canada, Central and South America	43,270		1.9	%	42,963		2.0	%	307			0.7	%
Total net revenues	$	2,237,770	100.0	%	$	2,147,442	100.0	%	$	90,328		4.2	%
	Fiscal Year Ended
	October 29, 2011		% of Net Revenues		October 30, 2010		% of Net Revenues		Increase/ (Decrease)			% Change
United States	$	1,313,302	61.2	%	$	1,338,262	64.0	%	$	(24,960	)	(1.9	)%
Europe, the Middle East and Africa (1)	502,999		23.4	%	482,707		23.1	%	20,292			4.2	%
Asia Pacific	$	212,636	9.9	%	$	173,243	8.3	%	$	39,393		22.7	%
Japan	75,542		3.5	%	58,914		2.8	%	16,628			28.2	%
Canada, Central and South America	$	42,963	2.0	%	$	38,027	1.8	%	$	4,936		13.0	%
Total net revenues	$	2,147,442	100.0	%	$	2,091,153	100.0	%	$	56,289		2.7	%

(1) Includes net revenues of $259.2 million, $257.5 million and $254.4 million for the years ended October 27, 2012, October 29, 2011 and October 30, 2010, respectively, relating to the Netherlands.

Revenues are attributed to geographic areas based on where our products are shipped. However, certain OEM partners take possession of our products domestically and then distribute these products to their international customers. Because we account for all of those OEM revenues as domestic revenues, we cannot be certain of the extent to which our domestic and international revenue mix is impacted by the practices of our OEM partners, but we believe that international revenues comprise a larger percentage of our total net revenues than the attributed revenues may indicate.

International revenues for the fiscal year ended October 27, 2012 decreased as a percentage of total net revenues compared to the prior year primarily due to higher revenues from our SAN product sales to U.S. OEM partners, which strengthened U.S. revenues, as well as lower product sales in EMEA due to a weak macroeconomic environment. International revenues for the fiscal year ended October 29, 2011 increased as a percentage of total net revenues compared to the prior year primarily due to growth in Japan and the Asia Pacific region.

A significant portion of our revenues are concentrated among a relatively small number of OEM customers. For the fiscal years ended October 27, 2012, October 29, 2011 and October 30, 2010, the same three customers each represented 10% or more of our total net revenues for a combined total of 47% (EMC with 16%, HP with 13% and IBM with 18%), 43% (EMC with 15%, HP with 13% and IBM with 15%) and 47% (EMC with 16%, HP with 14% and IBM with 17%), respectively, of our total net revenues. We expect that a significant portion of our future revenues will continue to come from sales of products to a relatively small number of OEM partners and to the U.S. federal government and its individual agencies through our distributors and resellers. Therefore, the loss of, or a significant decrease in the level of sales to, or a change in the ordering pattern of any one of these customers could seriously harm our financial condition and results of operations.

Gross margin. Gross margin as stated below is indicated as a percentage of the respective segment net revenues, except for total gross margin, which is stated as a percentage of total net revenues.

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Gross margin is summarized as follows (in thousands, except percentages):

	Fiscal Year Ended
	October 27, 2012		% of Net Revenues		October 29, 2011		% of Net Revenues		Increase/ (Decrease)			% Points Change
SAN Products	$	993,491	73.3	%	$	881,981	71.2	%	$	111,510		2.1	%
IP Networking Products	207,509		38.8	%	230,637		41.8	%	(23,128		)	(3.0	)%
Global Services	182,019		52.5	%	170,916		47.8	%	11,103			4.7	%
Total gross margin	$	1,383,019	61.8	%	$	1,283,534	59.8	%	$	99,485		2.0	%

	Fiscal Year Ended
	October 29, 2011		% of Net Revenues		October 30, 2010		% of Net Revenues		Increase/ (Decrease)			% Points Change
SAN Products	$	881,981	71.2	%	$	846,120	68.2	%	$	35,861		3.0	%
IP Networking Products	230,637		41.8	%	199,208		40.8	%	31,429			1.0	%
Global Services	170,916		47.8	%	185,792		51.3	%	(14,876		)	(3.5	)%
Total gross margin	$	1,283,534	59.8	%	$	1,231,120	58.9	%	$	52,414		0.9	%

For the fiscal year ended October 27, 2012 compared with the fiscal year ended October 29, 2011, total gross margin increased in absolute dollars and percentage primarily due to an increase in margins on SAN products and Global Services offerings, and a favorable product mix resulting from a year over year increase in the relative percentage of SAN products sold, which yield higher gross margins. This was partially offset by a decrease in margins on IP Networking products.

Gross margin percentage by reportable segment increased or decreased for the fiscal year ended October 27, 2012 compared with the fiscal year ended October 29, 2011 primarily due to the following factors (the percentages below reflect the impact on gross margin):

• SAN gross margins relative to net revenues increased due to a 1.1% decrease in product costs relative to net revenues. Additionally, amortization of SAN-related intangible assets decreased by 0.9% relative to net revenues;

• IP Networking gross margins relative to net revenues decreased due to a 4.3% increase in manufacturing costs, as well as a 1.1% increase in product costs relative to net revenues, which is primarily due to the impact of a decrease in average selling prices and an unfavorable mix due to an increase in the percentage of sales of our fixed form products which yield lower gross margins. These increases were partially offset by a 2.6% decrease in other costs relative to net revenues, primarily by a decrease in inventory excess and obsolescence charges and warranty expense; and

• Global Services gross margins relative to net revenues increased due to a 4.7% decrease in service and support costs relative to net revenues, primarily from decreased headcount as a result of the sale of SBS.

For the fiscal year ended October 29, 2011 compared with the fiscal year ended October 30, 2010, total gross margin increased in absolute dollars and percentage primarily due to higher revenues, as well as higher margins on SAN products and IP Networking products. This was partially offset by a decrease in Global Services gross margins, and increased mix of IP Networking Products revenues, which carry a lower overall gross margin.

Gross margin percentage by reportable segment increased or decreased for the fiscal year ended October 29, 2011 compared with the fiscal year ended October 30, 2010 primarily due to the following factors (the percentages below reflect the impact on gross margin):

• SAN gross margins relative to net revenues increased primarily due to a benefit of 1.2% from the release of a provision for certain litigation originally recorded in cost of sales, and a 1.3% decrease in direct product costs relative to net revenues, which more than offset the decline in average selling price. Additionally, amortization of intangible assets related to the McDATA acquisition decreased by 0.2%, and other manufacturing costs relative to net revenues decreased by 0.3%;

• IP Networking gross margins relative to net revenues increased due to a 1.0% decrease in amortization of intangible assets related to the Foundry acquisition, improved overhead absorption from higher revenues, and a 0.3% decrease in direct product costs, partially offset by a 0.3% increase in other manufacturing costs.

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• Global Services gross margins relative to net revenues decreased due to a 2.9% increase in service and support costs, primarily due to increased headcount, which offset the impact of a one-time settlement of a litigation matter during the first fiscal quarter of 2010. Additionally, stock-based compensation relative to net revenues increased by 0.6% due to increased headcount.

Stock-based compensation expense. Stock-based compensation expense is summarized as follows (in thousands, except percentages):

	October 27, 2012		% of Net Revenues		October 29, 2011		% of Net Revenues		Increase/ (Decrease)			% Change
Fiscal year ended	$	77,169	3.4	%	$	83,076	3.9	%	$	(5,907	)	(7.1	)%
	October 29, 2011		% of Net Revenues		October 30, 2010		% of Net Revenues		Increase/ (Decrease)			% Change
Fiscal year ended	$	83,076	3.9	%	$	101,625	4.9	%	$	(18,549	)	(18.3	)%

The decrease in stock-based compensation expense for the fiscal year ended October 27, 2012 compared with the fiscal year ended October 29, 2011 was due to fewer restricted stock units granted to employees in fiscal year 2012, and a recognition of a benefit as a result of actual forfeitures exceeding prior estimates in fiscal year 2012.

The decrease in stock-based compensation expense for the fiscal year ended October 29, 2011 compared with the fiscal year ended October 30, 2010 was primarily due to the decrease in Foundry-related deferred compensation and lower expenses related to our 2009 Employee Stock Purchase Plan (“ESPP”) for which higher compensation expense was recognized under the graded vesting methodology in fiscal year 2010. This was partially offset by higher expenses from an increase in new equity grants in fiscal year 2011.

Research and development expenses. Research and development (“R&D”) expenses consist primarily of compensation and related expenses for personnel engaged in engineering and R&D activities, fees paid to consultants and outside service providers, engineering expenses, which primarily consist of nonrecurring engineering charges and prototyping expenses related to the design, development, testing and enhancement of our products, depreciation related to engineering and test equipment, and related IT and facilities expenses.

R&D expenses are summarized as follows (in thousands, except percentages):

	October 27, 2012		% of Net Revenues		October 29, 2011		% of Net Revenues		Increase/ (Decrease)		% Change
Fiscal year ended	$	363,090	16.2	%	$	354,401	16.5	%	$	8,689	2.5	%
	October 29, 2011		% of Net Revenues		October 30, 2010		% of Net Revenues		Increase/ (Decrease)		% Change
Fiscal year ended	$	354,401	16.5	%	$	354,260	16.9	%	$	141	—	%

R&D expenses increased for the fiscal year ended October 27, 2012 compared with the fiscal year ended October 29, 2011 due to the following (in thousands):

	Increase (Decrease)
Salaries and wages	$	6,999
Outside services expense	4,143
Depreciation and amortization expense	1,905
Engineering expenses	1,187
The increase in R&D expenses was partially offset by decreases in the following:
Engineering equipment expenses	(3,615		)
Stock-based compensation expense	(1,007		)
Various individually insignificant items	(923		)
Total change	$	8,689

Salaries and wages increased primarily due to an increase in our variable compensation due to improved financial results during fiscal year 2012. Outside services expense increased primarily due to increased certification and technical publication expenses as we penetrated new markets and fulfilled additional U.S. federal government customer testing requirements. In addition, depreciation and amortization expense increased due to additional depreciation expenses related to equipment for our

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laboratories. These increases were partially offset by the decrease in engineering equipment expenses mainly due to reduced spending on equipment for product testing. In addition, stock-based compensation expense decreased mainly because of fewer grants of restricted stock units in fiscal year 2012, and forfeiture-related expense adjustments due to employee terminations.

R&D expenses increased for the fiscal year ended October 29, 2011 compared with the fiscal year ended October 30, 2010 due to the following (in thousands):

	Increase (Decrease)
Salaries and wages	$	14,288
Outside services expense	3,647
Depreciation and amortization expense	2,586
Various individually insignificant items	625
The increase in R&D expenses was partially offset by decreases in the following:
Stock-based compensation expense	(8,835		)
Nonrecurring engineering charges	(8,548		)
Sustaining engineering expenses allocated to cost of revenues	(3,622		)
Total change	$	141

Salaries and wages increased primarily due to increased headcount and higher bonuses, partially offset by five days of unpaid time resulting from the implementation of a company-wide unpaid time-off program during the fourth fiscal quarter of 2011. Outside services expense increased primarily due to projects related to our new IP Networking product offerings. Depreciation and amortization expense increased primarily due to the continued build-up of our development and testing labs. Nonrecurring engineering charges decreased primarily due to lower prototype costs and lower chip design expenses. Sustaining engineering expenses allocated to cost of revenues increased primarily as a result of new IP Networking products launched, partially offsetting the increase in R&D expenses.

Sales and marketing expenses. Sales and marketing expenses consist primarily of salaries, commissions and related expenses for personnel engaged in sales, marketing and customer service functions, costs associated with promotional and marketing programs, travel and entertainment expenses, and expenses related to IT and facilities and other shared functions.

Sales and marketing expenses are summarized as follows (in thousands, except percentages):

	October 27, 2012		% of Net Revenues		October 29, 2011		% of Net Revenues		Increase/ (Decrease)			% Change
Fiscal year ended	$	608,502	27.2	%	$	608,513	28.3	%	$	(11	)	—	%
	October 29, 2011		% of Net Revenues		October 30, 2010		% of Net Revenues		Increase/ (Decrease)			% Change
Fiscal year ended	$	608,513	28.3	%	$	534,458	25.6	%	$	74,055		13.9	%

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Sales and marketing expenses remained flat for the fiscal year ended October 27, 2012 compared with the fiscal year ended October 29, 2011 due to the following (in thousands):

	Increase (Decrease)
Salaries and wages	$	(9,958	)
Stock-based compensation expense	(2,810		)
Outside services expense	(1,443		)
Sales office facilities expenses	(1,094		)
Travel and entertainment expenses	(961		)
Various individually insignificant items	(460		)
The decrease in sales and marketing expenses was offset by increases in the following:
Marketing and advertising expenses	9,714
Expenses related to shared functions	7,001
Total change	$	(11	)

Salaries and wages decreased primarily due to a reduction in variable compensation mainly attributable to lower sales commissions and lower headcount. Stock-based compensation expense decreased primarily due to fewer grants of restricted stock units in fiscal year 2012, and forfeiture-related expense adjustments due to employee terminations. Outside services expense decreased primarily due to a decrease in the use of outside consultants for business development and operational projects in fiscal year 2012. Sales office facilities expenses decreased due to lower headcount and office consolidation. Travel and entertainment expenses decreased due to lower headcount and lower spending due to cost control initiatives. These decreases were offset by an increase in marketing and advertising expenses primarily due to our marketing awareness campaigns and various other marketing activities. In addition, expenses related to shared functions increased primarily due to an increase in legal expenses allocated to sales and marketing.

Sales and marketing expenses increased for the fiscal year ended October 29, 2011 compared with the fiscal year ended October 30, 2010 (in thousands):

	Increase (Decrease)
Salaries and wages	$	64,508
Marketing and advertising expenses	10,442
Expenses related to shared functions	3,799
Travel and entertainment expenses	1,931
Depreciation and amortization expense	1,683
Various individually insignificant items	856
The increase in sales and marketing expenses was partially offset by the decrease in the following:
Stock-based compensation	(9,164		)
Total change	$	74,055

Salaries and wages, expenses related to shared functions, travel and entertainment expenses, and depreciation and amortization increased primarily due to headcount growth. Additionally, salaries and wages increased due to higher bonuses and commissions, partially offset by five days of unpaid time resulting from the implementation of a company-wide unpaid time-off program during the fourth fiscal quarter of 2011. Marketing and advertising expenses increased primarily due to our new marketing awareness campaign, and consulting expenses related to our business model and growth strategy.

General and administrative expenses. General and administrative (“G&A”) expenses consist primarily of compensation and related expenses for corporate executives, finance, human resources, legal and investor relations, as well as recruiting expenses, professional fees, other corporate expenses, and related IT and facilities expenses.

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G&A expenses are summarized as follows (in thousands, except percentages):

	October 27, 2012		% of Net Revenues		October 29, 2011		% of Net Revenues		Increase/ (Decrease)		% Change
Fiscal year ended	$	74,583	3.3	%	$	69,506	3.2	%	$	5,077	7.3	%
	October 29, 2011		% of Net Revenues		October 30, 2010		% of Net Revenues		Increase/ (Decrease)		% Change
Fiscal year ended	$	69,506	3.2	%	$	67,848	3.2	%	$	1,658	2.4	%

G&A expenses increased for the fiscal year ended October 27, 2012 compared with the fiscal year ended October 29, 2011 due to the following (in thousands):

	Increase (Decrease)
Outside services expense	$	6,408
Salaries and wages	6,007
The increase in G&A expenses was partially offset by decreases in the following:
Facilities expenses	(2,675		)
Stock-based compensation expense	(1,917		)
Equipment and furniture expenses	(1,888		)
Various individually insignificant items	(858		)
Total change	$	5,077

Outside services expense increased primarily due to increased costs for our ongoing litigation matters. Salaries and wages increased due to merit increases in salaries and increased severance costs in fiscal year 2012, as well as an increase in our variable compensation due to improved financial results during fiscal year 2012. These increases were partially offset by a decrease in various facilities expenses, stock-based compensation expense and spending on equipment and furniture.

G&A expenses increased for the fiscal year ended October 29, 2011 compared with the fiscal year ended October 30, 2010 due to the following (in thousands):

	Increase (Decrease)
Depreciation and amortization expense	$	8,849
Salaries and wages	7,206
Outside services expense	1,026
The increase in G&A expenses was partially offset by decreases in the following:
Facilities expenses	(11,217		)
Stock-based compensation expense	(2,605		)
Various individually insignificant items	(1,601		)
Total change	$	1,658

Depreciation and amortization expense increased primarily due to additional furniture and equipment, and depreciation related to our new campus that was completed in the third fiscal quarter of 2010. Salaries and wages increased due to headcount growth and higher bonuses, partially offset by five days of unpaid time resulting from the implementation of a company-wide unpaid time-off program during the fourth fiscal quarter of 2011. Outside services expense increased primarily due to higher legal expenses related to disputes. Other facility expenses decreased primarily due to a decrease in rent and related expenses after moving into our new campus in the third fiscal quarter of 2010.

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Amortization of intangible assets. Amortization of intangible assets is summarized as follows (in thousands, except percentages):

	October 27, 2012		% of Net Revenues		October 29, 2011		% of Net Revenues		Increase/ (Decrease)			% Change
Fiscal year ended	$	59,204	2.6	%	$	60,713	2.8	%	$	(1,509	)	(2.5	)%
	October 29, 2011		% of Net Revenues		October 30, 2010		% of Net Revenues		Increase/ (Decrease)			% Change
Fiscal year ended	$	60,713	2.8	%	$	65,623	3.1	%	$	(4,910	)	(7.5	)%

The decrease in amortization of intangible assets for the fiscal year ended October 27, 2012 compared with the fiscal year ended October 29, 2011, as well as for the fiscal year ended October 29, 2011 compared with the fiscal year ended October 30, 2010, was primarily due to the full amortization of certain of our intangible assets.

Intangible assets are recorded based on estimates of fair value at the time of the acquisition and identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives (see Note 3, “Goodwill and Intangible Assets,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K).

Restructuring, integration and indemnification costs (recoveries). Restructuring, integration and indemnification costs (recoveries) are summarized as follows (in thousands, except percentages):

	October 27, 2012			% of Net Revenues		October 29, 2011		% of Net Revenues		Increase/ (Decrease)			% Change
Fiscal year ended	$	(89	)	—	%	$	125	—	%	$	(214	)	(171.2	)%
	October 29, 2011			% of Net Revenues		October 30, 2010		% of Net Revenues		Increase/ (Decrease)			% Change
Fiscal year ended	$	125		—	%	$	1,100	0.1	%	$	(975	)	(88.6	)%

We did not incur any restructuring and integration costs during the fiscal years ended October 27, 2012 and October 29, 2011.

Restructuring costs for the fiscal year ended October 30, 2010 was primarily due to $0.5 million of severance payments related to certain realignment within our Global Services segment, and $0.5 million related to estimated facility lease losses, net of expected sublease income recorded during the fiscal year ended October 30, 2010. Integration costs for the fiscal year ended October 30, 2010 was primarily for consulting services and other professional fees in connection with our integration of Foundry which we acquired on December 18, 2008.

Indemnification costs (recoveries) were immaterial for the fiscal years ended October 27, 2012, October 29, 2011 and October 30, 2010.

Loss on sale of subsidiary. We did not incur any loss on sale of subsidiary during the fiscal years ended October 27, 2012 and October 30, 2010. During the fiscal year ended October 29, 2011, a loss of $12.8 million was recorded in connection with the sale of SBS, consisting primarily of loss on disposal of goodwill of $1.7 million and write-down of intangible assets of $11.1 million (see Note 17, “Loss on Sale of Subsidiary,” of the Notes to Consolidated Financial Statements).

Interest income and other expense, net. Interest income and other expense, net, are summarized as follows (in thousands, except percentages):

	October 27, 2012			% of Net Revenues		October 29, 2011			% of Net Revenues		Increase/ (Decrease)			% Change
Fiscal year ended	$	(814	)	—		$	(378	)	—	%	$	(436	)	(115.3	)%
	October 29, 2011			% of Net Revenues		October 30, 2010			% of Net Revenues		Increase/ (Decrease)			% Change
Fiscal year ended	$	(378	)	—	%	$	(6,452	)	(0.3	)%	$	6,074		94.1	%

Interest income and other expense, net, were immaterial for the fiscal years ended October 27, 2012 and October 29, 2011.

For the fiscal year ended October 29, 2011 compared with the fiscal year ended October 30, 2010, the decrease in interest income and other expense, net, was primarily due to after-tax loss from the effective portion of the foreign currency cash flow

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hedge reclassified from accumulated other comprehensive loss in stockholders’ equity into other expense, net during the fiscal year ended October 30, 2010. Beginning in the first fiscal quarter of 2011, gains or losses relating to the effective portion of foreign currency cash flow derivatives are recorded in cost of revenues and operating expenses to match the underlying exposure to the related hedge results (see Note 10, “Derivative Instruments and Hedging Activities,” of the Notes to Consolidated Financial Statements). In the prior periods, net losses recorded in other expenses were not material, and have not been reclassified.

Interest expense. Interest expense primarily represents the interest cost associated with our term loan, senior secured notes and convertible subordinated debt (see Note 8, “Borrowings,” of the Notes to Consolidated Financial Statements). Interest expense is summarized as follows (in thousands, except percentages):

	October 27, 2012			% of Net Revenues		October 29, 2011			% of Net Revenues		(Increase)/ Decrease			% Change
Fiscal year ended	$	(52,488	)	(2.3	)%	$	(97,838	)	(4.6	)%	$	45,350		(46.4	)%
	October 29, 2011			% of Net Revenues		October 30, 2010			% of Net Revenues		(Increase)/ Decrease			% Change
Fiscal year ended	$	(97,838	)	(4.6	)%	$	(85,858	)	(4.1	)%	$	(11,980	)	14.0	%

Interest expense decreased for the fiscal year ended October 27, 2012 compared with the fiscal year ended October 29, 2011 as a result of a reduction in the principal amount of our outstanding debt, and refinancing our term debt credit agreement in June 2011, as described further below in “Liquidity and Capital Resources.” In addition, as a result of the June 2011 refinancing, in accordance with the applicable accounting guidance for debt modification and extinguishment, we recorded an expense of $25.5 million of debt issuance costs and original issue discount relating to the portion of the term loan that was extinguished.

Interest expense increased for the fiscal year ended October 29, 2011 compared with the fiscal year ended October 30, 2010 primarily as a result of the write-off of debt issuance costs and original issue discount of $25.5 million related to the refinancing of the term loan facility, and capitalization of a portion of interest cost in connection with the development of our San Jose, California campus in fiscal year 2010. This was partially offset by a reduction in debt, because of voluntary accelerated payments we made towards the principal of the term loan, as well as lower interest rates on amending the term debt credit agreement.

We obtained the term loan during the fourth fiscal quarter of 2008. In January 2010, we issued $600 million of long-term fixed rate notes and used the proceeds to pay down a substantial portion of the outstanding term loan, and retire the convertible subordinated debt we assumed in connection with our acquisition of McDATA in fiscal year 2007. In June 2011, we amended our credit agreement to refinance all of the outstanding term loan that effectively reduced interest rates, and is intended to provide us greater flexibility by, among other things, extending the maturity date on the term loan to October 31, 2014, reducing the required principal payments on a quarterly basis, and providing more flexibility in the use of our cash from operations, including for our share repurchase program. We paid the remaining balance of $190.0 million of our term loan during the fiscal year ended October 27, 2012. As of October 29, 2011, the carrying value of the outstanding balance of our term loan was $186.9 million. We were in compliance with applicable debt covenants as of October 27, 2012 and October 29, 2011.

Gain (loss) on sale of investments and property, net. Gain (loss) on sale of investments and property, net, is summarized as follows (in thousands, except percentages):

	October 27, 2012			% of Net Revenues		October 29, 2011			% of Net Revenues		Increase/ (Decrease)			% Change
Fiscal year ended	$	(26	)	—	%	$	124		—	%	$	(150	)	121.0	%
	October 29, 2011			% of Net Revenues		October 30, 2010			% of Net Revenues		Increase/ (Decrease)			% Change
Fiscal year ended	$	124		—	%	$	(8,551	)	(0.4	)%	$	8,675		101.5	%

Gain (loss) on sale of investments and property, net, were immaterial for the fiscal years ended October 27, 2012 and October 29, 2011.

For the fiscal year ended October 29, 2011 compared with the fiscal year ended October 30, 2010, the increase in gain (loss) on sale of investments and property, net, was primarily due to an immaterial gain on sale of investments, net, for the fiscal year ended October 29, 2011 as compared to an $8.7 million loss on the sale of owned property in San Jose, California to

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an unrelated third party during the first quarter of fiscal year 2010 (see Note 16, “Sale-Leaseback Transaction,” of the Notes to Consolidated Financial Statements).

Income tax expense (benefit). Income tax expense (benefit) and the effective tax rates are summarized as follows (in thousands, except effective tax rates):

	Fiscal Year Ended
	October 27, 2012			October 29, 2011			October 30, 2010
Income tax expense (benefit)	$	29,220		$	28,818		$	(9,553	)
Effective tax rate	13.0		%	36.3		%	(8.9		)%

In general, our provision for income taxes differs from the tax computed at the U.S. federal statutory income tax rate due to state taxes, the effect of non-U.S. operations, non-deductible stock-based compensation expense and adjustments to unrecognized tax benefits (additionally, see Note 13, “Income Taxes,” of the Notes to Consolidated Financial Statements).

For the fiscal year ended October 27, 2012, we recorded an income tax expense of $29.2 million compared with an income tax expense of $28.8 million for the fiscal year ended October 29, 2011. The tax provision in fiscal year 2012 was impacted by a decrease in benefit from the federal research and development tax credit which expired on December 31, 2011, offset by discrete benefits from reserve releases of settled tax audits, and the expiration of certain statutes of limitations. The effective tax rate in fiscal year 2012 is lower than the 35% U.S. federal statutory rate primarily due to earnings in our subsidiaries outside of the U.S. in jurisdictions where our effective tax rate is lower than in the U.S. Earnings of our subsidiaries outside of the U.S. primarily relate to our European and Asia Pacific businesses, which are headquartered in Switzerland.

For the fiscal year ended October 29, 2011, we recorded an income tax expense of $28.8 million compared with an income tax benefit of $9.6 million for the fiscal year ended October 30, 2010. The tax provision in fiscal year 2011 was primarily a result of cash repatriated from our foreign subsidiary and foreign tax expenses, partially offset by discrete benefits from the retroactive reinstatement of the federal research and development tax credit provision, reserve releases of settled tax audits, and the expiration of certain statutes of limitations.

Based on the fiscal year 2013 financial forecast, we expect the effective tax rate to be higher than fiscal year 2012. Factors such as the mix of IP Networking versus SAN products, and domestic versus international profits, could affect our tax expense. As estimates and judgments are used to project such domestic and international earnings, the impact to our tax provision could vary if the current planning or assumptions change. Our income tax provision could change from either effects of changing tax laws and regulations, or differences in international revenues and earnings from those historically achieved, a factor largely influenced by the buying behavior of our OEM and channel partners. In addition, we do not forecast discrete events, such as settlement of tax audits with governmental authorities due to their inherent uncertainty. Such settlements could materially impact our tax expense. Given that the tax rate is driven by several different factors, it is not possible to estimate our future tax rate with a high degree of certainty.

The IRS and other tax authorities regularly examine our income tax returns. The IRS is currently examining fiscal years 2009 and 2010. In addition, the IRS has also examined our income tax returns for fiscal years 2007 and 2008, and in May 2011, we received the IRS Revenue Agent's Report. The IRS is contesting our transfer pricing for the cost sharing and buy-in arrangements with our foreign subsidiaries. The IRS' proposed adjustment would offset approximately $317.4 million of our net operating loss carryforwards. We have filed a protest to appeal the amount of proposed adjustments in the Revenue Agent's Report with the Appeals Office of the IRS. We believe we have sufficient reserves recorded for the ultimate settlement of this issue. Furthermore, we are in negotiations with foreign tax authorities to obtain correlative relief on transfer pricing adjustments settled with the IRS. We believe that our reserves for unrecognized tax benefits are adequate for all open tax years. The timing of the resolution of income tax examinations, as well as the amounts and timing of related settlements, is highly uncertain. We believe that before the end of fiscal year 2013, it is reasonably possible that either certain audits will conclude or the statutes of limitations relating to certain income tax examination periods will expire, or both. After we reach settlement with the tax authorities, we expect to record a corresponding adjustment to our unrecognized tax benefits. Given the uncertainty as to settlement terms, the timing of payments and the impact of such settlements on other uncertain tax positions, we believe that the range of estimated potential decreases in underlying uncertain tax positions is between $0 and $24 million in the next twelve months. For additional discussion, see Note 13, “Income Taxes,” of the Notes to Consolidated Financial Statements.

We believe that sufficient positive evidence exists from historical operations and projections of taxable income in future years to conclude that it is more likely than not that we will realize our deferred tax assets. Accordingly, we apply a valuation allowance only on certain deferred tax assets relating to capital loss carryforwards due to the limited carryforward periods of these tax assets.

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On November 6, 2012, subsequent to the end of our fiscal year 2012, California voters approved Proposition 39 which revised certain provisions of the California State Tax Code, requiring mandatory single sales factor apportionment in California for most multi-state taxpayers for tax years beginning on or after January 1, 2013. We currently expect that in fiscal year 2013 and beyond, our income subject to tax in California will be lower than under prior tax law and that our California deferred tax assets are, therefore, less likely to be realized. As a result, during the first quarter of fiscal year 2013, we will record a charge of up to $78 million to reduce our previously recognized California deferred tax assets. This charge will not impact cash tax outlays and conformance to the new California apportionment rules is not expected to have a material impact on our future tax provision.

Liquidity and Capital Resources

	October 27, 2012			October 29, 2011			Increase/ (Decrease)
	(in thousands)
Cash and cash equivalents	$	713,226		$	414,202		$	299,024
Short-term investments	—			774			(774		)
Total	$	713,226		$	414,976		$	298,250
Percentage of total assets	20		%	12		%

We use cash generated by operations as our primary source of liquidity. We expect that cash provided by operating activities will fluctuate in future periods as a result of a number of factors, including fluctuations in our revenues, the timing of product shipments during the quarter, accounts receivable collections, inventory and supply chain management, and the timing and amount of tax and other payments. For additional discussion, see “Part I—Item 1A. Risk Factors.”

Based on past performance and current expectations, we believe that internally generated cash flows and cash on hand are generally sufficient to support business operations, capital expenditures, contractual obligations, and other liquidity requirements associated with our operations for at least the next twelve months. Also, we have up to $125 million available under our revolving credit facility, and we can factor our trade receivables up to the maximum amount available at any time under our $50 million factoring facility to provide additional liquidity. There are no other transactions, arrangements, or other relationships with unconsolidated entities or other persons that are reasonably likely to materially affect liquidity and availability of and our requirements for capital resources.

Our existing cash, cash equivalents and short-term investments totaled $713.2 million as of October 27, 2012. Of this amount, approximately 60% was held by our foreign subsidiaries. Under current tax laws and regulations, if these funds are distributed to the United States in the form of dividends or otherwise, we may be subject to additional U.S. income taxes and foreign withholding taxes.

Financial Condition

Cash, cash equivalents and short-term investments as of October 27, 2012 increased by $298.3 million over the balance as of October 29, 2011 primarily due to increased cash inflow from operating activities and net proceeds from the issuance of common stock under our employee equity compensation arrangements, partially offset by our payments towards the principal of the term loan and cash used to repurchase our common stock.

For the fiscal year ended October 27, 2012, we generated $590.9 million in cash from operating activities, which was higher than our net income for the same period, primarily as a result of adjustments to net income for non-cash items related to depreciation and amortization and stock-based compensation expense, in addition to increases in accrued employee compensation, deferred revenue and other accrued liabilities.

Net cash used in investing activities for the fiscal year ended October 27, 2012 totaled $71.8 million and was primarily the result of $72.8 million in purchases of property and equipment.

Net cash used in financing activities for the fiscal year ended October 27, 2012 totaled $218.1 million and was primarily the result of stock repurchases of $130.2 million and debt payments related to the term loan facility of $190.0 million, partially offset by proceeds from the issuance of common stock from ESPP purchases and stock option exercises of $98.8 million. For the fiscal year ended October 27, 2012, we fully paid our term loan facility and repurchased approximately 24.3 million shares of our stock.

A majority of our accounts receivable balance is derived from sales to our OEM partners. As of October 27, 2012, three customers accounted for 16%, 12% and 10%, respectively, of total accounts receivable. As of October 29, 2011, two customers accounted for 16% and 14%, respectively, of total accounts receivable. We perform ongoing credit evaluations of our customers

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and generally do not require collateral or security interests on accounts receivable balances. We have established reserves for credit losses, sales allowances, and other allowances. While we have not experienced material credit losses in any of the periods presented, there can be no assurance that we will not experience material credit losses in the future.

Accounts receivable days sales outstanding, which is a measure of the average number of days that a company takes to collect revenue after a sale has been made, for the year ended October 27, 2012 was 38 days, down from 42 days for the year ended October 29, 2011, primarily due to improved sales linearity in 2012.

Net proceeds from the issuance of common stock in connection with employee participation in our equity compensation plans have historically been a significant component of our liquidity. The extent to which our employees participate in these programs generally increases or decreases based upon changes in the market price of our common stock. As a result, our cash flow resulting from the issuance of common stock in connection with employee participation in equity compensation plans will vary.

Fiscal Year 2012 Compared to Fiscal Year 2011

Operating Activities. Net cash provided by operating activities increased by $141.6 million for the fiscal year ended October 27, 2012 compared with fiscal year ended October 29, 2011. The increase was primarily due to an increase in net income during fiscal year 2012 and decreased payments with respect to accrued employee compensation.

Investing Activities. Net cash used in investing activities decreased by $19.5 million for the fiscal year ended October 27, 2012 compared with fiscal year ended October 29, 2011. The decrease was primarily due to lower purchases of property and equipment.

Financing Activities. Net cash used in financing activities decreased by $59.0 million for the fiscal year ended October 27, 2012 compared with fiscal year ended October 29, 2011. The decrease was primarily due to lower repurchases of our Company's stock during fiscal year 2012.

Fiscal Year 2011 Compared to Fiscal Year 2010

Operating Activities. Net cash provided by operating activities increased by $150.7 million for the fiscal year ended October 29, 2011 compared with fiscal year ended October 30, 2010. The increase was primarily due to increased accounts receivable collections and decreased payments with respect to accrued employee compensation and other accrued liabilities, partially offset by a decrease in net income during fiscal year 2011.

Investing Activities. Net cash used in investing activities decreased by $77.1 million for the fiscal year ended October 29, 2011 compared with fiscal year ended October 30, 2010. The decrease was primarily due to lower purchases of property and equipment and proceeds from the sale of SBS in the fiscal year 2011, partially offset by proceeds of $30.2 million from sale of property in fiscal year 2010. Construction of our San Jose, California campus was completed in the third fiscal quarter of 2010.

Financing Activities. Net cash used in financing activities increased by $149.4 million for the fiscal year ended October 29, 2011 compared with fiscal year ended October 30, 2010. The increase was primarily due to higher repurchases of our Company’s stock during the fiscal year 2011, partially offset by lower net debt payments and higher proceeds from issuance of common stock during fiscal year 2011.

Liquidity

Manufacturing and Purchase Commitments. We have manufacturing arrangements with contract manufacturers under which we provide twelve-month product forecasts and place purchase orders in advance of the scheduled delivery of products to our customers. Our purchase commitments reserve reflects our estimate of purchase commitments we do not expect to consume in normal operations within the next twelve months, in accordance with our policy (see Note 9, “Commitments and Contingencies,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K).

Income Taxes. We accrue U.S. income taxes on the earnings of our foreign subsidiaries unless the earnings are considered indefinitely reinvested outside of the U.S. We intend to reinvest current and accumulated earnings of our foreign subsidiaries for expansion of our business operations outside the U.S. for an indefinite period of time. Based on past performance and current expectations, we believe that U.S. generated cash flows are sufficient to support our U.S. business operations, capital expenditures, contractual obligations, and other liquidity requirements associated with our operations.

Our existing cash, cash equivalents and short-term investments totaled $713.2 million as of October 27, 2012. Of this amount, approximately 60% was held by our foreign subsidiaries. Under current tax laws and regulations, if these funds are distributed to the U.S. in the form of dividends or otherwise, we may be subject to additional U.S. income taxes and foreign withholding taxes.

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The IRS and other tax authorities regularly examine our income tax returns (see Note 13, “Income Taxes,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K). We believe we have adequate reserves for all open tax years.

Senior Secured Credit Facility. In October 2008, we entered into a credit facility agreement for (i) a five-year $1,100 million term loan facility and (ii) a five-year $125 million revolving credit facility, which includes a $25 million swing line loan sub-facility and a $25 million letter of credit sub-facility (the “Credit Agreement”). The Credit Agreement was subsequently amended in January 2010 and June 2011 to reduce interest rates on the term loan facility, and to provide us with greater operating flexibility, including extending the maturity date of the term loan facility to October 31, 2014 and removing certain restrictions on the repurchase of our shares, provided the consolidated senior secured leverage ratio is under 2.00 (see Note 8, “Borrowings,” of the Notes to Consolidated Financial Statements).

During the fiscal year ended October 27, 2012, we paid $190.0 million to pay in full the term loan facility, $170.7 million of which were voluntary prepayments. We have the following resources available under the Senior Secured Credit Facility to obtain short-term or long-term financing, if we need additional liquidity, as of October 27, 2012 (in thousands):

	Original Amount		October 27, 2012
	Available		Used		Available
Revolving credit facility	$	125,000	$	—	$	125,000

Senior Secured Notes. In January 2010, we issued $300 million in aggregate principal amount of senior secured notes due 2018 (the “2018 Notes”) and $300 million in aggregate principal amount of senior secured notes due 2020 (the “2020 Notes” and together with the 2018 Notes, the “Senior Secured Notes”), see Note 8, “Borrowings,” of the Notes to Consolidated Financial Statements. We used the proceeds to pay down a substantial portion of the outstanding term loan, and retire the convertible subordinated debt due on February 15, 2010, which had been assumed in connection with our acquisition of McData.

Trade Receivables Factoring Facility. We have an agreement with a financial institution to sell certain of our trade receivables from customers with limited, non-credit related, recourse provisions. The sale of receivables eliminates our credit exposure in relation to these receivables. Total trade receivables sold under our factoring facility are summarized as follows (in thousands):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011
Trade receivables sold under factoring agreement	$	—	$	50,534

Under the terms of the factoring agreement, the total and available amounts of the factoring facility as of October 27, 2012 were $50.0 million.

Covenant Compliance.

Senior Secured Notes covenants.The Senior Secured Notes were issued pursuant to two separate indentures (together, the “Indentures”), among the Company, the Subsidiary Guarantors and Wells Fargo Bank, National Association, as trustee. Each of the Indentures contains covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries to:

• pay dividends, make investments or make other restricted payments;

• incur additional indebtedness;

• sell assets;

• enter into transactions with affiliates;

• incur liens;

• permit consensual encumbrances or restrictions on the Company’s restricted subsidiaries’ ability to pay dividends or make certain other payments to the Company;

• consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s or its restricted subsidiaries’ assets; and

• designate subsidiaries as unrestricted.

These covenants are subject to a number of other limitations and exceptions set forth in the Indentures. The Company was in compliance with all applicable covenants under the Indentures as of October 27, 2012.

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Each of the Indentures provides for customary events of default, including, but not limited to, cross defaults to specified other debt of the Company and its subsidiaries. In the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding senior secured notes will become due and payable immediately without further action or notice. If any other event of default under either Indenture occurs or is continuing, the applicable trustee or holders of at least 25% in aggregate principal amount of the then outstanding 2018 Notes or 2020 Notes, as applicable, may declare all of the 2018 Notes or 2020 Notes, respectively, to be due and payable immediately.

Senior Secured Credit Facility covenants.The Senior Secured Credit Facility agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries, including, among other things, restrictions on liens, indebtedness, investments, fundamental changes, dispositions, capital expenditures, prepayment of other indebtedness, redemption or repurchase of subordinated indebtedness, share repurchases, dividends and other distributions. The credit agreement contains financial covenants that require the Company to maintain a minimum consolidated fixed charge coverage ratio, a maximum consolidated leverage ratio and a maximum consolidated senior secured leverage ratio, each as defined in the credit agreement and described further below. The credit agreement also includes customary events of default, including cross-defaults on the Company’s material indebtedness and change of control. The Company was in compliance with all applicable covenants as of October 27, 2012.

Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), as defined in the credit agreement, is used to determine the Company’s compliance with certain covenants in the Senior Secured Credit Facility. Consolidated EBITDA is defined as:

• Consolidated net income

Plus:

• Consolidated interest charges;

• Provision for federal, state, local and foreign income taxes;

• Depreciation and amortization expense;

• Fees, costs and expenses incurred on or prior to the closing date of the Foundry acquisition in connection with the acquisition and the financing thereof;

• Any cash restructuring charges and integration costs in connection with the Foundry acquisition, in an aggregate amount not to exceed $75.0 million;

• Approved non-cash restructuring charges incurred in connection with the Foundry acquisition and the financing thereof;

• Other non-recurring expenses reducing consolidated net income which do not represent a cash item in such period or future periods;

• Any non-cash stock-based compensation expense; and

• Legal fees associated with the indemnification obligations for the benefit of former officers and directors in connection with Brocade’s historical stock option litigation;

Minus:

• Federal, state, local and foreign income tax credits; and

• All non-cash items increasing consolidated net income.

The Senior Secured Credit Facility financial covenants are defined as below:

Consolidated Fixed Charge Coverage Ratio

Consolidated fixed charge coverage ratio means, at any date of determination, the ratio of (a) (i) consolidated EBITDA (excluding interest expense, if any, attributable to the campus sale-leaseback), plus (ii) rentals payable under leases of real property, less (iii) the aggregate amount of all capital expenditures to (b) consolidated fixed charges; provided that, for purposes of calculating the consolidated fixed charge coverage ratio for any period ending prior to the first anniversary of the closing date, consolidated interest charges shall be an amount equal to actual consolidated interest charges from the closing date through the date of determination multiplied by a fraction the numerator of which is 365 and the denominator of which is the number of days from the closing date through the date of determination.

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In accordance with the amendment and waiver to the credit agreement, the Company has agreed that it will not permit the consolidated fixed charge coverage ratio as of the end of any fiscal quarter during any period set forth below to be less than the ratio set forth below opposite such period:

Four Fiscal Quarters Ending During Period:	Minimum Consolidated Fixed Charge Coverage Ratio
October 31, 2010 through October 29, 2011	1.50:1.00
October 30, 2011 through October 27, 2012	1.75:1.00
October 28, 2012 and thereafter	1.75:1.00

Consolidated Leverage Ratio

Consolidated leverage ratio means, as of any date of determination, the ratio of (a) consolidated funded indebtedness as of such date to (b) consolidated EBITDA for the measurement period ending on such date.

In accordance with the amendment and waiver to the credit agreement, the Company has agreed that it will not permit the consolidated leverage ratio at any time during any period set forth below to be greater than the ratio set forth below opposite such period:

Four Fiscal Quarters Ending During Period:	Maximum Consolidated Leverage Ratio
October 31, 2010 through October 29, 2011	3.00:1.00
October 30, 2011 through October 27, 2012	2.75:1.00
October 28, 2012 and thereafter	2.75:1.00

Consolidated Senior Secured Leverage Ratio

Consolidated senior secured leverage ratio means, as of any date of determination, the ratio of (a) consolidated funded indebtedness as of such date, minus, without duplication, all unsecured senior subordinated or subordinated indebtedness of Brocade or its subsidiaries on a consolidated basis as of such date (including the McDATA Corporation ("McDATA") convertible subordinated debt prior to being retired on February 16, 2010), to (b) consolidated EBITDA for the measurement period ending on such date.

In accordance with the amendment and waiver to the credit agreement, the Company has agreed that it will not permit the consolidated senior secured leverage ratio at any time during any period set forth below to be greater than the ratio set forth below opposite such period:

Four Fiscal Quarters Ending During Period:	Maximum Consolidated Senior Secured Leverage Ratio
October 31, 2010 through October 29, 2011	2.50:1.00
October 30, 2011 through October 27, 2012	2.25:1.00
October 28, 2012 and thereafter	2.00:1.00

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Contractual Obligations

The following table summarizes our contractual obligations, including interest expense, and commitments as of October 27, 2012 (in thousands):

	Total		Less than 1 Year		1 – 3 Years		3 – 5 Years		More than 5 Years
Contractual Obligations:
Senior secured notes due 2018 (1)	$	404,343	$	19,875	$	39,750	$	39,750	$	304,968
Senior secured notes due 2020 (1)	449,531		20,625		41,250		41,250		346,406
Non-cancelable operating leases (2)	82,390		22,471		33,888		19,446		6,585
Non-cancelable capital lease	5,305		2,221		3,084		—		—
Purchase commitments, gross (3)	212,044		212,044		—		—		—
Total contractual obligations	$	1,153,613	$	277,236	$	117,972	$	100,446	$	657,959
Other Commitments:
Standby letters of credit	$	235	n/a		n/a		n/a		n/a
Unrecognized tax benefits and related accrued interest (4)	$	121,707	n/a		n/a		n/a		n/a

(1) Amount reflects total anticipated cash payments, including anticipated interest payments.

(2) Amount excludes contractual sublease income of $28.7 million, which consists of $6.7 million to be received in less than one year, $13.8 million to be received in one to three years, and $8.2 million to be received in three to five years.

(3) Amount reflects total gross purchase commitments under our manufacturing arrangements with third-party contract manufacturers. Of this amount, we have accrued $4.3 million for estimated purchase commitments that we do not expect to consume in normal operations within the next twelve months, in accordance with our policy.

(4) As of October 27, 2012, we had a liability for unrecognized tax benefits of $119.3 million and a net accrual for the payment of related interest and penalties of $2.4 million.

Share Repurchase Program. As of October 27, 2012, our Board of Directors had authorized, since the inception of the program in August 2004, a total of $1.3 billion for the repurchase of our common stock. The purchases may be made, from time to time, in the open market or by privately negotiated transactions and will be funded from available working capital. The number of shares to be purchased and the timing of purchases will be based on the level of our cash balances, general business and market conditions, our debt covenants, the trading price of our common stock and other factors, including alternative investment opportunities. For the fiscal year ended October 27, 2012, we repurchased 24.3 million shares for an aggregate purchase price of $130.2 million. Approximately $548.2 million remained authorized for future repurchases under this program as of October 27, 2012. We are subject to certain covenants relating to our borrowings that restrict the amount of our Company’s shares that we can repurchase. There is no restriction on the repurchase of our Company’s shares under the terms of our Senior Secured Credit Facility, provided our consolidated senior secured leverage ratio as defined in the credit agreement is under 2.00.

Off-Balance Sheet Arrangements

As part of our ongoing business, we do not participate in transactions that generate material relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes. As of October 27, 2012, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Critical Accounting Estimates

Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of

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these Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate, on an ongoing basis, our estimates and judgments, including, but not limited to, those related to sales allowances and programs, bad debts, stock-based compensation, commissions, allocation of purchase price of acquisitions, excess inventory and purchase commitments, restructuring costs, facilities lease losses, impairment of goodwill and intangible assets, litigation, uncertain tax positions and investments. We base our estimates on historical experience and assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The methods, estimates and judgments we use in applying our most critical accounting policies have a significant impact on the results that we report in our Consolidated Financial Statements. We believe the following critical accounting policies, among others, require significant estimates and judgments used in the preparation of our consolidated financial statements.

Revenue recognition. Our multiple-element product offerings include networking hardware with embedded software products and support, which are considered separate units of accounting. For certain of our products, software and non-software components function together to deliver the tangible products’ essential functionality. We allocate revenue to each element in a multiple-element arrangement based upon their relative selling price. When applying the relative selling price method, we determine the selling price for each deliverable using vendor-specific objective evidence (“VSOE”) of selling price, if it exists, or third-party evidence (“TPE”) of selling price. If neither VSOE nor TPE of selling price exist for a deliverable, we use our best estimate of selling price for that deliverable. Revenue allocated to each element is then recognized when the basic revenue recognition criteria are met for each element.

We determine VSOE based on our normal pricing and discounting practices for the specific product or service when sold separately. In determining VSOE, we require that a substantial majority of the selling prices for a product or service fall within a reasonably narrow pricing range. For post-contract customer support, we consider stated renewal rates in determining VSOE.

In most instances, we are not able to establish VSOE for all deliverables in an arrangement with multiple elements. This may be due to us infrequently selling each element separately, not pricing products within a narrow range, or only having a limited sales history. When VSOE cannot be established, we attempt to establish selling price for each element based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, our go-to-market strategy differs from that of our competitors and our offerings contain a significant level of customization and differentiation such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, we are unable to reliably determine what similar competitor products’ selling prices are on a stand-alone basis. Therefore, we are typically not able to determine TPE.

When we are unable to establish selling price using VSOE or TPE, we use estimated selling price (“ESP”) in our allocation of the arrangement consideration. The objective of ESP is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. ESP is generally used for offerings that are not typically sold on a stand-alone basis or for new or highly customized offerings.

We determine ESP for a product by considering multiple factors including, but not limited to, geographies, market conditions, competitive landscape, internal costs, gross margin objectives and pricing practices. The determination of ESP is made through consultation with and formal approval by our management, taking into consideration the go-to-market strategy. If circumstances related to our estimates for revenue recognition change, our allocation of revenue to each element in a multiple-element arrangement may also change.

Stock-based compensation. We grant stock options for shares in the Company’s common stock, restricted stock units and other types of equity compensation awards to our employees and directors under various equity compensation plans. For additional discussion, see Note 12, “Stock-Based Compensation,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.

The compensation expense for stock-based awards is adjusted for an estimated impact of forfeitures and is recognized over the expected term of the award under a graded or straight-line vesting method. In addition, we record stock-based compensation expense in connection with shares issued under our employee stock purchase plan using the graded vesting method over the twenty-four month offering period.

We use the Black-Scholes option pricing model to determine the fair value of stock options granted when the measurement date is certain. We also use the Black-Scholes option pricing model to determine the fair value of the option component of employee stock purchase plan shares. The determination of the fair value of stock-based awards using the option pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the expected term of the awards, projected and actual employee stock option exercise behaviors, risk-free interest rates, estimated forfeitures and expected dividends.

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We estimate the expected term of stock options granted by calculating the average term from our historical stock option exercise experience. We do not anticipate paying any cash dividends in the foreseeable future, and therefore we use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. We use historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest. We use implied volatilities from traded options of the Company’s common stock and historical volatilities of the Company’s common stock to estimate volatility over the expected term of the awards.

The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future.

Acquisitions—Purchase Price Allocation. We allocate the purchase price of an acquired business to the assets acquired and liabilities assumed, including identifiable intangible assets, based on their respective fair values at the acquisition date. The excess of the purchase price over the fair value of the underlying acquired net tangible and intangible assets, if any, is recorded as goodwill. Management estimates the fair value of assets and liabilities based upon quoted market prices, the carrying value of the acquired assets and widely accepted valuation techniques. We adjust the preliminary purchase price allocation, as necessary, typically up to one year after the acquisition closing date as we obtain more information regarding asset valuations and liabilities assumed.

Inventory valuation and purchase commitment liabilities. We write down inventory and record purchase commitment liabilities for estimated excess and obsolete inventory equal to the difference between the cost of inventory and the estimated fair value based upon forecast of future product demand, product transition cycles and market conditions. Any significant unanticipated changes in demand or technological development could have a significant impact on the value of our inventory and purchase commitments, and our reported results. If actual market conditions are less favorable than those projected, additional inventory write-downs, purchase commitment liabilities and charges against earnings may be required.

Restructuring costs. We monitor and regularly evaluate our organizational structure and associated operating expenses. Depending on events and circumstances, we may decide to take additional actions to reduce future operating costs as our business requirements evolve. In determining restructuring charges, we analyze our future operating requirements, including the required headcount by business functions and facility space requirements. Our restructuring costs and any resulting accruals involve significant estimates made by management using the best information available at the time the estimates are made. In recording severance accruals, we record a liability when all of the following conditions have been met: employees’ rights to receive compensation for future absences is attributable to employees’ services already rendered; the obligation relates to rights that vest or accumulate; payment of the compensation is probable; and the amount can be reasonably estimated. In recording facilities lease loss accruals, we make various assumptions, including the time period over which the facilities are expected to be vacant, expected sublease terms, expected sublease rates, expected future operating costs, and expected future use of the facilities. Our estimates involve a number of risks and uncertainties, some of which are beyond our control, including future real estate market conditions and our ability to successfully enter into subleases or lease termination agreements with terms as favorable as those assumed when arriving at our estimates. We regularly evaluate a number of factors to determine the appropriateness and reasonableness of our restructuring accruals, including the various assumptions noted above. If actual results differ significantly from our estimates, we may be required to adjust our restructuring accruals in the future.

Impairment of goodwill and intangible assets. Goodwill is generated as a result of business combinations. We conduct our goodwill impairment test annually, as of the first day of the second fiscal quarter, and whenever events or changes in facts and circumstances indicate that the fair value of the reporting unit may be less than its carrying amount. Events which might indicate impairment include, but are not limited to, strategic decisions made in response to economic and competitive conditions, the impact of the economic environment on our customer base, material negative changes in relationships with significant customers, and/or a significant decline in our stock price for a sustained period. Consistent with prior years, we performed our annual goodwill impairment test using measurement data as of the first day of the second fiscal quarter of 2012.

We use the income approach, the market approach, or a combination thereof, in testing goodwill for impairment for each reporting unit, which we have determined to be at the operating segment level. The reporting units are determined by the components of our operating segments that constitute a business for which both (i) discrete financial information is available and (ii) segment management regularly reviews the operating results of that component. Our four reporting units are: Storage Area Networking (“SAN”) Products; Ethernet Switching & Internet Protocol (“IP”) Routing, which includes Open Systems Interconnection Reference Model (“OSI”) Layer 2-3 products; Application Delivery Products (“ADP”), which includes OSI Layer 4-7 products; and Global Services.

The first step tests for potential impairment by comparing the fair value of reporting units with reporting units’ net asset values. If the fair value of the reporting unit exceeds the carrying value of the reporting unit’s net assets, then goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is below the reporting unit’s carrying value,

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then the second step is required to measure the amount of potential impairment. The second step requires an assignment of the reporting unit’s fair value to the reporting unit’s assets and liabilities, using the initial acquisition accounting guidance in ASC 805 Business Combinations, to determine the implied fair value of the reporting unit’s goodwill. The implied fair value of the reporting unit’s goodwill is then compared with the carrying amount of the reporting unit’s goodwill to determine the goodwill impairment loss to be recognized, if any. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, we record an impairment loss equal to the difference.

To determine the reporting unit’s fair values, we use the income approach, the market approach, or a combination thereof. The income approach provides an estimate of fair value based on discounted expected future cash flows. The market approach provides an estimate of the fair value of our four reporting units using various prices or market multiples applied to the reporting unit’s operating results and then applying an appropriate control premium. During our fiscal year 2012 annual goodwill impairment test under the first step, we used a combination of approaches to estimate reporting units’ fair values. We believe that at the time of impairment testing performed in the second fiscal quarter of 2012, the income approach and the market approach were equally representative of a reporting unit’s fair value.

Determining the fair value of a reporting unit or an intangible asset is judgmental in nature and involves the use of significant estimates and assumptions. We based our fair value estimates on assumptions we believe to be reasonable, but inherently uncertain. Estimates and assumptions with respect to the determination of the fair value of our reporting units using the income approach include, among other inputs:

• The Company’s operating forecasts;

• Revenue growth rates; and

• Risk-commensurate discount rates and costs of capital.

Our estimates of revenues and costs are based on historical data, various internal estimates and a variety of external sources, and are developed as part of our regular long-range planning process. The control premium used in market or combined approaches is determined by considering control premiums offered as part of acquisitions that have occurred in a reporting unit’s comparable market segments.

Based on the results of our step one analysis, we believe that all our reporting units pass the step one test and no further testing is required. However, because some of the inherent assumptions and estimates used in determining the fair value of these reportable segments are outside the control of management, changes in these underlying assumptions can adversely impact fair value. The sensitivity analysis below quantifies the impact of key assumptions on certain reporting units’ fair value estimates. The principal key assumptions impacting our estimates were (i) discount rates and (ii) DCF terminal value multipliers. As the discount rates, ultimately, reflect the risk of achieving reporting units’ revenue and cash flow projections, we do not believe that a separate sensitivity analysis for changes in revenue and cash flow projections is meaningful or useful.

The estimated fair value of the Ethernet Switching & IP Routing reporting unit exceeded its carrying value by approximately $117 million and the ADP reporting unit exceeded its carrying value by approximately $40 million. The respective fair values of our remaining reporting units exceeded carrying value by significant amounts and were not subject to the sensitivity analysis presented below.

The following table summarizes the approximate impact that a change in principal key assumptions would have on the estimated fair value of Ethernet Switching & IP Routing reporting unit, leaving all other assumptions unchanged:

	Change	Approximate Impact on Fair Value (In millions)	Excess of Fair Value over Carrying Value (In millions)
Discount rate	±1%	$ (28) - 30	$ 88 - 146
DCF terminal value multiplier	±0.5x	$ (58) - 58	$ 59 - 175

The following table summarizes the approximate impact that a change in principal key assumptions would have on the estimated fair value of the ADP reporting unit, leaving all other assumptions unchanged:

	Change	Approximate Impact on Fair Value (In millions)	Excess of Fair Value over Carrying Value (In millions)
Discount rate	±1%	$ (5) – 5	$ 35 – 45
DCF terminal value multiplier	±0.5x	$ (5) – 5	$ 35 – 45

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Accounting for income taxes. The determination of our tax provision is subject to estimates and judgments due to operations in multiple tax jurisdictions inside and outside the United States. Sales to our international customers are principally taxed at rates that are lower than the United States statutory rates. The ability to maintain our current effective tax rate is contingent upon existing tax laws in both the United States and in the respective countries in which our international subsidiaries are located. Future changes in domestic or international tax laws could affect the continued realization of the tax benefits we are currently receiving and expect to receive from international sales. In addition, an increase in the percentage of our total revenue from international customers or in the mix of international revenue among particular tax jurisdictions could change our overall effective tax rate. We intend to reinvest current and remaining accumulated earnings of our foreign subsidiaries for expansion of our business operations outside the United States for an indefinite period of time. These earnings could become subject to United States federal and state income taxes and foreign withholding taxes, as applicable, should they be either deemed or actually remitted from our international subsidiaries to the United States. In addition, we evaluate the expected realization of our deferred tax assets and assess the need for a valuation allowance on a quarterly basis. As of October 27, 2012, our net deferred tax asset balance was $227.7 million. We believe that sufficient positive evidence exists from historical operations and projections of U.S. taxable income in future years to conclude that it is more likely than not that we would realize our deferred tax assets. Historical operations showed that we have cumulative profits for the prior 12 quarters ended October 27, 2012. Accordingly, we only apply a valuation allowance on the deferred tax assets relating to capital loss carryforwards due to limited carryforward periods and the character of such tax attributes. In the event future income by jurisdiction is less than what is currently projected, we may be required to apply a valuation allowance to these deferred tax assets in jurisdictions for which realization is no longer determined to be more likely than not.

On November 6, 2012, subsequent to the end of our fiscal year 2012, California voters approved Proposition 39 which revised certain provisions of the California State Tax Code, requiring mandatory single sales factor apportionment in California for most multi-state taxpayers for tax years beginning on or after January 1, 2013. We currently expect that in fiscal year 2013 and beyond, our income subject to tax in California will be lower than under prior tax law and that our California deferred tax assets are, therefore, less likely to be realized. As a result, during the first quarter of fiscal year 2013, we will record a charge of

up to $78 million to reduce our previously recognized California deferred tax assets. This charge will not impact cash tax outlays and conformance to the new California apportionment rules is not expected to have a material impact on our future tax provision.

Accounting for uncertain tax benefits. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws. We apply a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Recognition of a tax position is determined when it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority. The threshold and measurement attribute requires significant judgment by management. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our results of operations.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on our consolidated financial statements, see Note 2, “Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, we are exposed to market risks related to changes in interest rates, foreign currency exchange rates and equity prices that could impact our financial position and results of operations. Our risk management strategy with respect to these three market risks may include the use of derivative financial instruments. We use derivative contracts only to manage existing underlying exposures of the Company. Accordingly, we do not use derivative contracts for speculative purposes. Our risks and risk management strategy are outlined below. Actual gains and losses in the future may differ materially from the sensitivity analysis presented below based on changes in the timing and amount of interest rates and our actual exposures and hedges.

Interest Rate Risk

Our exposure to market risk due to changes in the general level of United States interest rates relates primarily to our cash equivalents. Our cash and cash equivalents are primarily maintained at five major financial institutions. The primary objective of our investment activities is the preservation of principal while maximizing investment income and minimizing risk.

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The Company did not have any material investments as of October 27, 2012 and October 29, 2011 that are sensitive to changes in interest rates.

Foreign Currency Exchange Rate Risk

We are exposed to foreign currency exchange rate risk inherent in conducting business globally in numerous currencies. We are primarily exposed to foreign currency fluctuations related to operating expenses denominated in currencies other than the U.S. dollar, of which the most significant to our operations for fiscal year 2012 were the Chinese yuan, the euro, the Japanese yen, the Indian rupee, the British pound, the Singapore dollar and the Swiss franc. As such, we benefit from a stronger U.S. dollar and may be adversely affected by a weaker U.S. dollar relative to the foreign currency. We use foreign currency forward and option contracts designated as cash flow hedges to protect against the foreign currency exchange rate risks inherent in our forecasted operating expenses denominated in currencies other than the U.S. dollar. We recognize the gains and losses on foreign currency forward contracts in the same period as the remeasurement losses and gains of the related foreign currency denominated exposures.

We also may enter into other non-designated derivatives that consist primarily of forward contracts to minimize the risk associated with the foreign exchange effects of revaluing monetary assets and liabilities. Monetary assets and liabilities denominated in foreign currencies and any associated outstanding forward contracts are marked-to-market with realized and unrealized gains and losses included in earnings.

Alternatively, we may choose not to hedge the foreign currency risk associated with our foreign currency exposures if we believe such exposure acts as a natural foreign currency hedge for other offsetting amounts denominated in the same currency or if the currency is difficult or too expensive to hedge. As of October 27, 2012, we held $117.2 million in cash flow derivative instruments. The maximum length of time over which we are hedged as of October 27, 2012 is through October 1, 2013.

We have performed a sensitivity analysis as of October 27, 2012, using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant. The analysis covers all of our foreign currency contracts offset by the underlying exposures. The foreign currency exchange rates we used were based on market rates in effect on October 27, 2012. The sensitivity analysis indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would not result in a material foreign exchange loss as of October 27, 2012.

Equity Price Risk

We had no investments in publicly traded equity securities as of October 27, 2012. The aggregate cost of our equity investments in non-publicly traded companies was $7.0 million as of October 27, 2012. We monitor our equity investments for impairment on a periodic basis. In the event that the carrying value of the equity investment exceeds its fair value, and we determine the decline in value to be other-than-temporary, we reduce the carrying value to its current fair value. Generally, we do not attempt to reduce or eliminate our market exposure on these equity securities. We do not purchase our equity securities with the intent to use them for speculative purposes.

Our common stock is quoted on the NASDAQ Global Select Market under the symbol “BRCD.” On October 26, 2012, the last business day of our fourth fiscal quarter of 2012, the last reported sale price of our common stock on the NASDAQ Global Select Market was $5.30 per share.

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Item 8. Financial Statements and Supplementary Data

BROCADE COMMUNICATIONS SYSTEMS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	54
Consolidated Statements of Operations	55
Consolidated Balance Sheets	56
Consolidated Statements of Cash Flows	57
Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Loss)	59
Notes to Consolidated Financial Statements	60
Quarterly Summary (Unaudited)	98

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Brocade Communications Systems, Inc.:

We have audited the accompanying consolidated balance sheets of Brocade Communications Systems, Inc. and subsidiaries (the Company) as of October 27, 2012 and October 29, 2011, and the related consolidated statements of operations, stockholders’ equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended October 27, 2012. In connection with our audits of the consolidated financial statements, we also have audited the accompanying financial statement schedule. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Brocade Communications Systems, Inc. and subsidiaries as of October 27, 2012 and October 29, 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended October 27, 2012, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of October 27, 2012, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated December 14, 2012, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/    KPMG LLP        

Santa Clara, California

December 14, 2012

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BROCADE COMMUNICATIONS SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
	Fiscal Year Ended
	October 27, 2012			October 29, 2011			October 30, 2010
	(In thousands, except per share amounts)
Net revenues
Product	$	1,890,856		$	1,789,814		$	1,728,814
Service	346,914			357,628			362,339
Total net revenues	2,237,770			2,147,442			2,091,153
Cost of revenues
Product	689,856			677,196			683,486
Service	164,895			186,712			176,547
Total cost of revenues	854,751			863,908			860,033
Gross margin	1,383,019			1,283,534			1,231,120
Operating expenses:
Research and development	363,090			354,401			354,260
Sales and marketing	608,502			608,513			534,458
General and administrative	74,583			69,506			67,848
Amortization of intangible assets	59,204			60,713			65,623
Restructuring, integration and indemnification costs (recoveries)	(89		)	125			1,100
Loss on sale of subsidiary	—			12,756			—
Total operating expenses	1,105,290			1,106,014			1,023,289
Income from operations	277,729			177,520			207,831
Interest income	659			597			763
Other expense, net	(1,473		)	(975		)	(7,215		)
Interest expense	(52,488		)	(97,838		)	(85,858		)
Gain (loss) on sale of investments and property, net	(26		)	124			(8,551		)
Income before income tax	224,401			79,428			106,970
Income tax expense (benefit)	29,220			28,818			(9,553		)
Net income	$	195,181		$	50,610		$	116,523
Net income per share—basic	$	0.43		$	0.11		$	0.26
Net income per share—diluted	$	0.41		$	0.10		$	0.24
Shares used in per share calculation—basic	456,629			474,259			446,996
Shares used in per share calculation—diluted	472,343			497,030			482,741

See accompanying notes to consolidated financial statements.

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BROCADE COMMUNICATIONS SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS
	October 27, 2012			October 29, 2011
	(In thousands, except par value)
ASSETS
Current assets:
Cash and cash equivalents	$	713,226		$	414,202
Short-term investments	—			774
Total cash, cash equivalents and short-term investments	713,226			414,976
Accounts receivable, net of allowances for doubtful accounts of $833 and $1,388 at October 27, 2012 and October 29, 2011, respectively	233,139			249,141
Inventories	68,179			74,172
Deferred tax assets	91,539			53,604
Prepaid expenses and other current assets	49,496			52,308
Total current assets	1,155,579			844,201
Property and equipment, net	518,940			532,384
Goodwill	1,624,089			1,630,967
Intangible assets, net	109,265			214,697
Non-current deferred tax assets	136,175			210,028
Other assets	37,213			42,031
Total assets	$	3,581,261		$	3,474,308
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	117,350		$	109,471
Accrued employee compensation	182,597			118,298
Deferred revenue	216,283			201,421
Current liabilities associated with facilities lease losses	976			1,456
Current portion of long-term debt	1,977			40,539
Other accrued liabilities	91,285			94,802
Total current liabilities	610,468			565,987
Long-term debt, net of current portion	599,203			748,904
Non-current liabilities associated with facilities lease losses	1,606			2,496
Non-current deferred revenue	76,907			69,024
Non-current income tax liability	47,370			63,593
Other non-current liabilities	9,887			10,166
Total liabilities	1,345,441			1,460,170
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000 shares authorized, no shares issued and outstanding	—			—
Common stock, $0.001 par value, 800,000 shares authorized:
Issued and outstanding: 456,913 and 448,022 shares at October 27, 2012 and October 29, 2011, respectively	457			448
Additional paid-in capital	2,009,190			1,984,830
Accumulated other comprehensive loss	(9,864		)	(11,996		)
Retained earnings	236,037			40,856
Total stockholders’ equity	2,235,820			2,014,138
Total liabilities and stockholders’ equity	$	3,581,261		$	3,474,308

See accompanying notes to consolidated financial statements.

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BROCADE COMMUNICATIONS SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
	Fiscal Year Ended
	October 27, 2012			October 29, 2011			October 30, 2010
	(In thousands)
Cash flows from operating activities:
Net income	$	195,181		$	50,610		$	116,523
Adjustments to reconcile net income to net cash provided by operating activities:
Excess tax benefits from stock-based compensation	(5,141		)	(312		)	(2,161		)
Depreciation and amortization	192,218			206,352			199,637
Loss on disposal of property and equipment	883			2,325			10,412
Loss on sale of subsidiary	—			12,756			—
Amortization of debt issuance costs and original issue discount	7,788			13,183			21,100
Write-off of debt issuance costs and original issue discount on debt extinguishment	—			25,465			—
Net gains on investments	(179		)	(340		)	(523		)
Provision for doubtful accounts receivable and sales allowances	11,301			9,343			11,811
Non-cash compensation expense	77,169			83,076			101,625
Non-cash facilities lease loss expense	—			—			513
Capitalization of interest cost	—			—			(7,755		)
Changes in assets and liabilities:
Restricted cash	—			—			12,502
Accounts receivable	4,701			53,561			(39,248		)
Inventories	4,656			1,327			(4,657		)
Prepaid expenses and other assets	3,987			(1,688		)	13,657
Deferred tax assets	1,256			(2,158		)	(1,134		)
Accounts payable	7,720			(38,917		)	(26,421		)
Accrued employee compensation	47,679			216			(100,826		)
Deferred revenue	22,744			19,579			15,420
Other accrued liabilities	20,277			20,878			(10,731		)
Liabilities associated with facilities lease losses	(1,370		)	(6,024		)	(11,231		)
Net cash provided by operating activities	590,870			449,232			298,513

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BROCADE COMMUNICATIONS SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)
	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
	(In thousands)
Cash flows from investing activities:
Purchases of short-term investments	—		(38	)	(53	)
Purchases of non-marketable minority equity investments	—		—		(200	)
Proceeds from maturities and sale of short-term investments	952		1,604		3,255
Purchases of property and equipment	(72,797	)	(96,797	)	(201,621	)
Proceeds from sale of property	—		—		30,185
Proceeds from sale of subsidiary	35		3,905		—
Net cash used in investing activities	(71,810	)	(91,326	)	(168,434	)
Cash flows from financing activities:
Payment of fees related to the term loan	—		(1,167	)	—
Payment of debt issuance costs related to the senior secured notes	—		—		(3,666	)
Payment of principal related to the convertible subordinated debt	—		—		(172,500	)
Payment of principal related to the term loan	(190,000	)	(359,898	)	(583,029	)
Payment of principal related to capital leases	(1,866	)	(1,761	)	(1,173	)
Common stock repurchases	(130,209	)	(210,698	)	(25,004	)
Proceeds from senior secured notes	—		—		587,968
Proceeds from issuance of common stock	98,791		97,152		81,593
Proceeds from term loan	—		198,950		—
Payment of principal related to the revolving credit facility	—		—		(14,050	)
Excess tax benefits from stock-based compensation	5,141		312		2,161
Net cash used in financing activities	(218,143	)	(277,110	)	(127,700	)
Effect of exchange rate fluctuations on cash and cash equivalents	(1,893	)	(578	)	(2,588	)
Net increase (decrease) in cash and cash equivalents	299,024		80,218		(209	)
Cash and cash equivalents, beginning of year	414,202		333,984		334,193
Cash and cash equivalents, end of year	713,226		414,202		333,984
Supplemental disclosures of cash flow information:
Cash paid for interest	44,686		56,576		59,549
Cash paid for income taxes	4,999		1,148		8,801
Supplemental schedule of non-cash investing activities:
Note assumed on sale of subsidiary	—		1,218		—
Acquisition of property and equipment through capital leases	—		—		9,716

See accompanying notes to consolidated financial statements.

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BROCADE COMMUNICATIONS SYSTEMS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS)
	Common Stock					Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings (Accumulated Deficit)			Total Stockholders’ Equity			Comprehensive Income (Loss)
	Number of Shares		Amount
	(In thousands)
Balance at October 31, 2009	433,988		$	434		$	1,901,200		$	(5,920	)	$	(126,277	)	$	1,769,437
Issuance of common stock	31,757		32			68,900									68,932
Common stock repurchases	(4,454	)	(5		)	(24,999		)							(25,004		)
Settlement of stock awards assumed upon acquisition						(1,362		)							(1,362		)
Tax benefit from employee stock plans						2,161									2,161
Stock-based compensation						101,625									101,625
Change in net unrealized gains on cash flow hedges									5,346						5,346			5,346
Change in cumulative translation adjustments									(2,253		)				(2,253		)	(2,253		)
Net income												116,523			116,523			116,523
Balance at October 30, 2010	461,291		$	461		$	2,047,525		$	(2,827	)	$	(9,754	)	$	2,035,405		$	119,616
Issuance of common stock	34,735		35			70,119									70,154
Common stock repurchases	(48,004	)	(48		)	(210,650		)							(210,698		)
Tax detriment from employee stock plans						(5,240		)							(5,240		)
Stock-based compensation						83,076									83,076
Change in net unrealized gains on cash flow hedges									(8,275		)				(8,275		)	(8,275		)
Change in cumulative translation adjustments									(894		)				(894		)	(894		)
Net income												50,610			50,610			50,610
Balance at October 29, 2011	448,022		$	448		$	1,984,830		$	(11,996	)	$	40,856		$	2,014,138		$	41,441
Issuance of common stock	33,198		33			82,138									82,171
Common stock repurchases	(24,307	)	(24		)	(130,185		)							(130,209		)
Tax detriment from employee stock plans						(4,762		)							(4,762		)
Stock-based compensation						77,169									77,169
Change in net unrealized gains on cash flow hedges									3,965						3,965			3,965
Change in cumulative translation adjustments									(1,833		)				(1,833		)	(1,833		)
Net income												195,181			195,181			195,181
Balance at October 27, 2012	456,913		$	457		$	2,009,190		$	(9,864	)	$	236,037		$	2,235,820		$	197,313

See accompanying notes to consolidated financial statements.

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BROCADE COMMUNICATIONS SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

Brocade Communications Systems, Inc. (“Brocade” or the “Company”) is a leading supplier of networking equipment, including Internet Protocol (“IP”) based Ethernet networking solutions and Storage Area Networking (“SAN”) solutions for businesses and organizations of many types and sizes, including global enterprises, and service providers such as telecommunication firms, cable operators and mobile carriers. Brocade’s products, services and solutions simplify information technology (“IT”) infrastructure, increase resource utilization, ensure availability of mission critical applications, and support key IT services including Internet connectivity, enterprise mobility, virtualization, and cloud computing.

The fiscal year for the Company is the 52 or 53 weeks ending on the last Saturday in October. As is customary for companies that use the 52/53-week convention, every fifth year contains a 53-week year. Fiscal years 2012, 2011 and 2010 were 52-week fiscal years. The Company’s next 53-week fiscal year will be fiscal year 2014 and its next 14-week quarter will be in the second quarter of fiscal year 2014.

The Consolidated Financial Statements include the accounts of Brocade and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates in Preparation of Consolidated Financial Statements

The preparation of consolidated financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to sales allowances and programs, allowance for doubtful accounts, stock-based compensation, purchase price allocations, warranty obligations, inventory valuation and purchase commitments, restructuring costs, commissions, facilities lease losses, impairment of goodwill and intangible assets, litigation, income taxes and investments. Actual results may differ materially from these estimates.

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents.

Investments and Equity Securities

Investment securities with an original maturity of more than three months that mature less than one year from the Consolidated Balance Sheet date are considered short-term investments. Investment securities with an original or remaining maturity of one year or more and which the Company has the ability and intent to hold are considered long-term investments. Investments are classified as available-for-sale and are recorded on the accompanying Consolidated Balance Sheets at fair value.

Unrealized holding gains and losses related to the Company’s investments are included as a separate component of accumulated other comprehensive loss on the accompanying Consolidated Balance Sheets, net of any related tax effect. Realized gains and losses are calculated based on the specific identification method and are included in “Other expense, net” on the Consolidated Statements of Operations.

The Company recognizes an impairment charge when the fair values of its investments have fallen below their cost basis and the decline in fair value is assessed to be other-than-temporary. An other-than-temporary impairment is triggered when there is an intent to sell the security, it is more likely than not that the security will be required to be sold before recovery, or the Company is not expected to recover the entire amortized cost basis of the security. The Company also considers various factors in determining whether to recognize an impairment charge, including the length of time and extent to which the fair value has been less than the cost basis and the financial condition and near-term prospects of the issuer. For impairments involving credit losses, the Company recognizes the credit loss component in earnings and the remainder of the impairment is recorded in accumulated other comprehensive loss.

From time to time the Company makes equity investments in non-publicly traded companies. These investments are included in “Other assets” on the accompanying Consolidated Balance Sheets and are generally accounted for under the cost method as the Company does not have the ability to exercise significant influence over the respective issuer’s operating and financial policies nor does it have a liquidation preference that is substantive. The Company monitors its investments in non-publicly traded companies for impairment on a quarterly basis and makes appropriate reductions in carrying values when such

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impairments are determined to be other-than-temporary. Impairment charges are included in “Other expense, net” on the Consolidated Statements of Operations. Factors considered in determining an impairment include, but are not limited to, the current business environment including competition and uncertainty of financial condition, going concern considerations such as the rate at which the issuer company utilizes cash and the issuer company’s ability to obtain additional private financing to fulfill its stated business plan, the need for changes to the issuer company’s existing business model due to changing business environments and its ability to successfully implement necessary changes, and comparable valuations.

Fair Value of Financial Instruments

The fair value of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate cost because of their short maturities. The fair value of the Company’s investments is primarily determined using quoted market prices for those securities or similar financial instruments.

Derivative Financial Instruments

In the normal course of business, the Company is exposed to fluctuations in interest rates and the exchange rates associated with foreign currencies. The derivatives entered into by the Company qualify for and are designated as foreign currency cash flow hedges.

The derivatives are recognized on the Consolidated Balance Sheets at their respective fair values. Changes in fair values of outstanding cash flow hedges that are highly effective are recorded in accumulated other comprehensive loss until earnings are affected by the variability of cash flows of the underlying hedged transaction. In most cases, amounts recorded in accumulated other comprehensive loss will be released to earnings at maturity of the related derivative. The recognition of effective hedge results offsets the gains or losses on the underlying exposure. Cash flows from derivative transactions are classified according to the nature of the risk being hedged.

The Company formally documents all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking hedge transactions. This documentation includes linking all derivatives either to specific assets and liabilities on the consolidated balance sheets or specific firm commitments or forecasted transactions. The Company also formally assesses both at the hedge’s inception and on an ongoing basis whether the derivatives used in hedging transactions have been highly effective in offsetting changes in the cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods.

The Company discontinues hedge accounting prospectively when (i) the derivative is no longer highly effective in offsetting changes in the cash flows of a hedged item (including hedged items such as firm commitments or forecasted transactions); (ii) the derivative expires or is sold, terminated or exercised; (iii) it is no longer probable that the forecasted transaction will occur; or (iv) management determines that designating the derivative as a hedging instrument is no longer appropriate.

When the Company discontinues hedge accounting, but it continues to be probable that the forecasted transaction will occur in the originally expected period, the gain or loss on the derivative remains in accumulated other comprehensive loss and is reclassified into earnings when the forecasted transaction affects earnings. However, if it is no longer probable that a forecasted transaction will occur by the end of the originally specified time period or within an additional two-month period of time thereafter, the gain or loss that was in accumulated other comprehensive loss will be recognized immediately in earnings. In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the Company will carry the derivative at its fair value on the Consolidated Balance Sheet until maturity and will recognize future changes in the fair value in current period earnings. Any hedge ineffectiveness is recorded in current period earnings within “Other expenses.” Effectiveness is assessed based on the comparison of current forward rates to the rates established on the Company’s hedges.

Inventories

Inventories are stated at the lower of cost or market, using the first-in, first-out method. Inventory costs include material, labor and overhead. The Company records inventory write-downs based on excess and obsolete inventory determined primarily by its forecast of future demand. A portion of the Company’s inventory is located offsite at customers, third party managed service depots and at contract manufacturers’ locations. Cash flows related to the sale of inventories are classified as cash flows from operating activities.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. An estimated useful life of 3 years is used for computer equipment and 4 to 7 years is used for software based on the nature of the software purchased. Estimated useful lives

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of up to 4 years are used for engineering and other equipment, 7 years is used for furniture and an estimated useful life of 39 years is used for buildings. Leasehold improvements are amortized using the straight-line method over the shorter of 10 years or the remaining term of the lease.

Interest costs related to major construction projects are capitalized until the asset is ready for service. Capitalized interest is calculated by multiplying the weighted-average interest rate on the Company long-term debt by the qualifying construction costs. Interest capitalized may not exceed gross interest expense for the period. As the qualifying asset is moved to the depreciation and amortization pool, the related capitalized interest is also transferred and is amortized over the useful life of the related asset. Interest cost of $7.8 million was capitalized for the year ended October 30, 2010 specifically the Company campus project. No interest costs were capitalized during the years ended October 27, 2012 and October 29, 2011 since the construction of the Company campus project was completed in the third quarter of fiscal year 2010.

Brocade evaluates long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable in accordance with Accounting Standards Codification (“ASC”) 360-10 Property, Plant and Equipment. Brocade assesses the fair value of the assets based on the undiscounted future cash flow the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flow expected to result from the use of the asset plus net proceeds expected to result from the disposition of the asset, if any, are less than the carrying value of the asset. When Brocade identifies an impairment, Brocade reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values.

Goodwill and Intangible Assets

The Company evaluates goodwill on an annual basis during its second fiscal quarter or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized to the extent that the carrying amount of goodwill exceeds the asset’s implied fair value. Events which might indicate impairment include, but are not limited to, strategic decisions made in response to economic and competitive conditions, the impact of the economic environment on the Company’s customer base, material negative changes in relationships with significant customers, and/or a significant decline in the Company’s stock price for a sustained period.

Intangible assets are carried at cost less accumulated amortization. Amortization is recognized on a straight-line basis over the estimated useful life of the respective asset. The Company evaluates intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Examples of such events or circumstances include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of acquired assets or the strategy for the Company’s business, significant negative industry or economic trends, and/or a significant decline in the Company’s stock price for a sustained period. Impairment is recognized based on the difference between the fair value of the asset and its carrying value. For additional discussion, see Note 4, “Goodwill and Intangible Assets,” of the Notes to Consolidated Financial Statements.

Litigation Costs

The Company is subject to the possibility of legal actions arising in the ordinary course of business. The Company regularly monitors the status of pending legal actions to evaluate both the magnitude and likelihood of any potential losses. An accrual for these potential losses is made when they are probable and the amount of loss, or possible range of loss, can be reasonably estimated. Legal costs related to such potential losses are expensed as incurred. In addition, recoveries are shown as a reduction in litigation costs in the period in which they are realized.

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. Cash, cash equivalents and short-term investments are primarily maintained at five major financial institutions. Deposits held with banks may be redeemed upon demand and may exceed the amount of insurance provided on such deposits.

A majority of the Company’s accounts receivable balance is derived from sales to original equipment manufacturer (“OEM”) partners in the computer storage and server industry. As of October 27, 2012, three customers accounted for 16%, 12% and 10% respectively, of total accounts receivable, for a combined total of 38% of total accounts receivable. As of October 29, 2011, two customers accounted for 16% and 14%, respectively, of total accounts receivable, for a combined total of 30% of total accounts receivable. The Company performs ongoing credit evaluations of its customers and generally does not require collateral on accounts receivable balances. The Company has established reserves for credit losses, sales allowances, and other allowances.

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For the years ended October 27, 2012, October 29, 2011 and October 30, 2010, the same three customers accounted for a combined total of 47% (EMC Corporation (“EMC”) with 16%, Hewlett-Packard Company (“HP”) with 13% and International Business Machines Corporation (“IBM”) with 18%), 43% (EMC with 15%, HP with 13% and IBM with 15%) and 47% (EMC with 16%, HP with 14% and IBM with 17%) of total net revenues, respectively.

The Company currently relies on single and limited sources for multiple key components used in the manufacture of its products. Additionally, the Company relies on multiple contract manufacturers for the production of its products, including Hon Hai Precision Industry Co., Ltd., Accton Wireless Broadband Corporation, Motorola, Inc. and Quanta Computer Incorporated (collectively the contract manufacturers or “CMs”). Although the Company uses standard parts and components for its products where possible, the Company’s CMs currently purchase, on their behalf, several key components used in the manufacture of products from single or limited supplier sources.

Revenue Recognition

Product revenue. Substantially all of the Company’s products are integrated with software that is essential to the functionality of the equipment. Additionally, the Company provides unspecified software upgrades and enhancements related to the equipment through its maintenance contracts for most of its products. Product revenue is generally recognized when all of the following criteria have been met:

• Persuasive evidence of an arrangement exists;

• Delivery has occurred;

• The fee is fixed or determinable; and

• Collectability is reasonably assured.

For newly introduced products, many of the Company’s large OEM customers require a product qualification period during which the Company’s products are tested and approved by the OEM customers for sale to their customers. Revenue recognition and related cost are deferred for shipments to new OEM customers and for shipments of newly introduced products to existing OEM customers until satisfactory evidence of completion of the product qualification has been received from the OEM customer. In addition, revenue from sales to the Company’s distributor customers is recognized in the same period in which the product is actually sold by the distributor (sell-through).

The Company reduces revenue for estimated sales allowances at the time of shipment and sales programs at the later of revenue recognition or communication of the commitment for sales incentives. Sales allowances are estimated based on historical sales returns. Sales programs are estimated based on approved sales programs versus claims under such sales programs, current trends and the Company’s expectations regarding future activity. In addition, the Company maintains an allowance for doubtful accounts, which is also accounted for as a reduction in revenue. The Company establishes the allowance for doubtful accounts to ensure accounts receivables are not overstated due to uncollectability. The Company maintains bad debt reserves based upon the analysis of accounts receivable, historical collection patterns, customer concentrations, customer creditworthiness, current economic trends, changes in customer payment terms and practices, and customer communication. The Company records a specific reserve for individual accounts when it becomes aware of a customer’s likely inability to meet its financial obligations, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position. If circumstances related to customers change, the Company would further adjust estimates of the recoverability of receivables.

Multiple-element arrangements. The Company’s multiple-element product offerings include networking hardware with embedded software products and support, which are considered separate units of accounting. For certain of the Company’s products, software and non-software components function together to deliver the tangible products’ essential functionality.

The Company allocates revenue to each element in a multiple-element arrangement based upon their relative selling price. When applying the relative selling price method, the Company determines the selling price for each deliverable using vendor-specific objective evidence (“VSOE”) of selling price, if it exists, or third-party evidence (“TPE”) of selling price. If neither VSOE nor TPE of selling price exist for a deliverable, the Company uses its best estimate of selling price for that deliverable. Revenue allocated to each element is then recognized when the basic revenue recognition criteria are met for each element.

The Company determines VSOE based on its normal pricing and discounting practices for the specific product or service when sold separately. In determining VSOE, the Company requires that a substantial majority of the selling prices for a product or service fall within a reasonably narrow pricing range. For post-contract customer support (“PCS”), the Company considers stated renewal rates in determining VSOE.

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In most instances, the Company is not able to establish VSOE for all deliverables in an arrangement with multiple elements. This may be due to the Company infrequently selling each element separately, not pricing products within a narrow range, or only having a limited sales history. When VSOE cannot be established, the Company attempts to establish selling price for each element based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, the Company’s go-to-market strategy differs from that of its peers and its offerings contain a significant level of customization and differentiation such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Company is unable to reliably determine what similar competitor products’ selling prices are on a stand-alone basis. Therefore, the Company is typically not able to determine TPE.

When the Company is unable to establish selling price using VSOE or TPE, the Company uses estimated selling price (“ESP”) in its allocation of the arrangement consideration. The objective of ESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. ESP is generally used for offerings that are not typically sold on a stand-alone basis or for new or highly customized offerings.

The Company determines ESP for a product by considering multiple factors including, but not limited to, geographies, market conditions, competitive landscape, internal costs, gross margin objectives and pricing practices. The determination of ESP is made through consultation with and formal approval by the Company’s management, taking into consideration the go-to-market strategy.

The Company regularly reviews VSOE, TPE and ESP and maintains internal controls over the establishment and updates of these estimates. There was no material impact on revenues during the fiscal year ended October 27, 2012 nor does the Company expect a material impact in the near term from changes in VSOE, TPE or ESP.

Services revenue. Services revenue consists of training and maintenance arrangements, including PCS and other professional services. PCS services are offered under renewable, annual fee-based contracts or as part of multiple-element arrangements, and typically include telephone support and upgrades and enhancements to the Company’s operating system software. Revenue related to PCS elements is deferred and recognized ratably over the contractual period. PCS contracts are typically one to three years in length.

Professional services are offered under hourly or fixed fee-based contracts. Professional services revenue is recognized as services are performed. Training revenue is recognized upon completion of the training.

Warranty Expense

The Company provides standard warranties on its products ranging from one year to limited lifetime warranties. Estimated future warranty costs are accrued at the time of shipment and charged to cost of revenues based upon historical experience, current trends and the Company’s expectations regarding future experience.

Foreign Currency

Assets and liabilities of the Company’s international subsidiaries in which the local currency is the functional currency are translated into U.S. dollars at period-end exchange rates. Income and expenses are translated into U.S. dollars at the average exchange rates during the period. The resulting translation adjustments are included in the Company’s Consolidated Balance Sheets in the stockholders’ equity section as a component of accumulated other comprehensive loss. Foreign exchange gains and losses for assets and liabilities of the Company’s international subsidiaries in which the local currency is the U.S. dollar are recorded in the Company’s Consolidated Statement of Operations.

Capitalized Software Development Costs

Eligible software development costs are capitalized upon the establishment of technological feasibility, which is defined as being equivalent to completion of a beta-phase working prototype. Total eligible software development costs have not been material to date.

Costs related to internally developed software and software purchased for internal use, primarily for implementation and upgrade of the Company’s enterprise wide integrated business information system, are capitalized and included in “Property and equipment, net.” These costs are being depreciated over the estimated useful lives of four to seven years based on the nature of the software purchased.

Advertising Costs

The Company expenses all advertising costs as incurred. Advertising costs were $17.7 million, $12.1 million and $7.9 million for the years ended October 27, 2012, October 29, 2011 and October 30, 2010, respectively.

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Income Taxes

The Company recognizes income tax expense for the amount of taxes payable or refundable for the current year. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts, along with net operating loss carry forwards and credit carry forwards. A valuation allowance is recognized to the extent that it is more likely than not that the tax benefits will not be realized.

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes. For additional discussion, see Note 13, “Income Taxes,” of the Notes to Consolidated Financial Statements.

Computation of Net Income per Share

Basic net income per share is computed using the weighted-average number of common shares outstanding during the period, less shares subject to repurchase. Diluted net income per share is computed using the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period that have a dilutive effect on earnings per share. Potentially dilutive common shares result from the assumed exercise of outstanding stock options, assumed vesting of outstanding restricted stock units and awards and assumed issuance of stock under the employee stock purchase plan all using the treasury stock method, as well as the assumed conversion of outstanding convertible subordinated debt using the if-converted method.

Stock-Based Compensation

The Company accounts for employee equity awards under the fair value method. Accordingly, the Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options and the Employee Stock Purchase Plan (“ESPP”) is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to restricted stock units is based on the fair value of the Company’s common stock on the date of the grant. The Company records stock-based compensation expense over the twenty-four month offering period in connection with shares issued under its ESPP. The compensation expense for stock-based awards is reduced by an estimate for forfeitures and is recognized over the expected term of the award under a graded vesting method, except for restricted stock units granted by the Company, which are recognized over the expected term of the award under a straight-line vesting method. For additional discussion, see Note 12, “Stock-Based Compensation,” of the Notes to Consolidated Financial Statements.

The Company accounts for the tax effects of share-based payment awards using the alternative transition method, which includes simplified methods to establish the beginning balance of the additional paid-in capital pool (“APIC Pool”) related to the tax effects of employee stock-based compensation and to determine the subsequent impact on the APIC Pool and consolidated statement of cash flows of the tax effects of employee stock-based compensation awards.

Recent Accounting Pronouncements or Updates That Are Not Yet Effective

In September 2011, the FASB issued an update to ASC 350 Intangibles—Goodwill and Other (“ASC 350”): Testing Goodwill for Impairment. The update gives an entity an option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. An entity has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test. An entity may resume performing the qualitative assessment in any subsequent period. Under the amendments, an entity no longer is permitted to carry forward its detailed calculation of a reporting unit’s fair value from a prior year as previously permitted by ASC 350. This update to ASC 350 is effective for the Company in the fiscal year 2013, with earlier adoption permitted if the Company’s financial statements for the most recent annual or interim period have not yet been issued. The Company is currently evaluating the impact of the update, but does not expect the adoption of this update to ASC 350 to have a material impact on its financial position, results of operations or cash flows.

In June 2011 and December 2011, the FASB issued updates to ASC 220 Comprehensive Income (“ASC 220”): Presentation of Comprehensive Income. The amendments from these updates will result in more converged guidance on how

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comprehensive income is presented under U.S. GAAP and International Financial Reporting Standards (“IFRS”). With these updates to ASC 220, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The amendments in these update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income, nor does it affect how earnings per share is calculated or presented. Current U.S. GAAP allows reporting entities three alternatives for presenting other comprehensive income and its components in financial statements. One of those alternatives is to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. This update eliminates that option. The update to ASC 220 should be applied retrospectively and will be adopted by the Company in the first quarter of fiscal year 2013. The Company does not expect the adoption of ASC 220 to have an impact on its financial position, results of operations or cash flows.

3. Goodwill and Intangible Assets

The following table summarizes goodwill activity by reportable segment during the fiscal years ended October 27, 2012 and October 29, 2011 (in thousands):

	SAN Products			IP Networking Products			Global Services			Total
Balance at October 30, 2010
Goodwill	$	176,989		$	1,356,704		$	157,089		$	1,690,782
Accumulated impairment losses	—			(45,832		)	—			(45,832		)
	176,989			1,310,872			157,089			1,644,950
Goodwill disposed (1)	—			—			(1,673		)	(1,673		)
Tax and other adjustments (2)	(21		)	(12,289		)	—			(12,310		)
Balance at October 29, 2011
Goodwill	176,968			1,344,415			155,416			1,676,799
Accumulated impairment losses	—			(45,832		)	—			(45,832		)
	176,968			1,298,583			155,416			1,630,967
Tax and other adjustments (2)	(12		)	(6,866		)	—			(6,878		)
Balance at October 27, 2012
Goodwill	176,956			1,337,549			155,416			1,669,921
Accumulated impairment losses	—			(45,832		)	—			(45,832		)
	$	176,956		$	1,291,717		$	155,416		$	1,624,089

(1) Goodwill disposed relates to sale of Strategic Business Systems, Inc. (“SBS”), a wholly owned subsidiary, see Note 17, “Loss on Sale of Subsidiary,” of the Notes to Consolidated Financial Statements.

(2) The goodwill adjustments were primarily a result of tax benefit from the exercise of stock awards of acquired companies.

The Company conducts its goodwill impairment test annually, as of the first day of the second fiscal quarter, and whenever events or changes in facts and circumstances indicate that the fair value of the reporting unit may be less than its carrying amount. For the annual goodwill impairment test, the Company uses the income approach, the market approach, or a combination thereof, to determine each reporting unit’s fair value. The income approach provides an estimate of fair value based on discounted expected future cash flows (“DCF”). The market approach provides an estimate of fair value using various prices or market multiples applied to the reporting unit’s operating results and then applying an appropriate control premium. For the fiscal year 2012 annual goodwill impairment test, the Company used a combination of approaches to estimate each reporting unit’s fair value. The Company believed that at the time of impairment testing performed in the second fiscal quarter of 2012, the income approach and the market approach were equally representative of a reporting unit’s fair value.

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Determining the fair value of a reporting unit or an intangible asset requires judgment and involves the use of significant estimates and assumptions. The Company based its fair value estimates on assumptions it believes to be reasonable, but inherently uncertain. Estimates and assumptions with respect to the determination of the fair value of its reporting units using the income approach include, among other inputs:

• The Company’s operating forecasts;

• Revenue growth rates; and

• Risk-commensurate discount rates and costs of capital.

The Company’s estimates of revenues and costs are based on historical data, various internal estimates and a variety of external sources, and are developed as part of our regular long-range planning process. The control premium used in market or combined approaches is determined by considering control premiums offered as part of the acquisitions that have occurred in the reporting units’ comparable market segments. Based on the results of the annual goodwill impairment analysis performed during the second fiscal quarter of 2012, the Company determined that no impairment needed to be recorded. During the fiscal year ended October 27, 2012, there were no facts and circumstances that indicated that the fair value of the reporting units may be less than their current carrying amount.

Intangible assets other than goodwill are amortized over the following estimated remaining useful lives, unless the Company has determined these lives to be indefinite. The following tables present details of the Company’s intangible assets (in thousands, except for weighted-average remaining useful life):

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Weighted- Average Remaining Useful Life (in years)
October 27, 2012
Trade name	$	10,441	$	10,438	$	3	0.17
Core/developed technology	337,858		292,083		45,775		1.14
Customer relationships	352,581		289,094		63,487		1.16
Total intangible assets	$	700,880	$	591,615	$	109,265	1.16

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Weighted- Average Remaining Useful Life (in years)
October 29, 2011
Trade name	$	10,441	$	10,422	$	19	1.17
Core/developed technology	337,858		245,855		92,003		2.04
Customer relationships	352,581		229,906		122,675		2.12
Total intangible assets	$	700,880	$	486,183	$	214,697	2.08

The following table presents the amortization of intangible assets included on the Consolidated Statements of Operations (in thousands):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Cost of revenues	$	46,229	$	57,489	$	61,249
Operating expenses	$	59,204	$	60,713	$	65,623
Total	$	105,433	$	118,202	$	126,872

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The following table presents the estimated future amortization of intangible assets as of October 27, 2012 (in thousands):

Fiscal Year	Estimated Future Amortization
2013	$	93,109
2014	16,156
Total	$	109,265

4. Liabilities Associated with Facilities Lease Losses

The Company reevaluates its estimates and assumptions on a quarterly basis and makes adjustments to the reserve balance if necessary. The following table summarizes the activity related to the facilities lease loss reserve, net of expected sublease income (in thousands):

	Lease Loss Reserve
Reserve balance at October 30, 2010	$	9,976
Cash payments on facilities leases	(6,024		)
Reserve balance at October 29, 2011	3,952
Cash payments on facilities leases	(1,334		)
Other adjustments, net	(36		)
Reserve balance at October 27, 2012	$	2,582

Cash payments for facilities leases related to the above noted facilities lease losses are expected to be paid over the respective lease terms through fiscal year 2017.

5. Balance Sheet Details

The following tables provides details of selected balance sheet items (in thousands):

	October 27, 2012			October 29, 2011
Accounts Receivable:
Accounts receivable	$	243,731		$	255,540
Allowance for doubtful accounts	(833		)	(1,388		)
Sales allowances	(9,759		)	(5,011		)
Total	$	233,139		$	249,141

	October 27, 2012		October 29, 2011
Inventories:
Raw materials	$	24,240	$	25,535
Finished goods	43,939		48,637
Total	$	68,179	$	74,172

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	October 27, 2012			October 29, 2011
Property and equipment, net:
Computer equipment	$	17,953		$	19,310
Software	39,410			35,865
Engineering and other equipment	409,524			357,827
Furniture and fixtures (1)	30,516			29,195
Leasehold improvements	26,306			23,793
Land and building (2)	384,666			384,666
Subtotal	908,375			850,656
Less: Accumulated depreciation and amortization (1), (3)	(389,435		)	(318,272		)
Total	$	518,940		$	532,384

	October 27, 2012		October 29, 2011
Other accrued liabilities:
Income taxes payable	$	15,079	$	12,978
Accrued warranty	14,453		11,298
Inventory purchase commitments	4,271		5,075
Accrued sales programs	24,801		30,651
Accrued interest	12,011		12,829
Others	20,670		21,971
Total	$	91,285	$	94,802

(1) Furniture and fixtures and accumulated depreciation and amortization include the following amounts under leases as of October 27, 2012 and October 29, 2011 (in thousands):

	October 27, 2012			October 29, 2011
Cost	$	10,613		$	10,613
Accumulated depreciation	(3,647		)	(2,131		)
Total	$	6,966		$	8,482

(2) In connection with the purchase of the property located in San Jose, California, the Company obtained a four-year option to purchase a fourth unimproved approximate four acre parcel for a fixed price of approximately $26.0 million as well as a right of first offer to purchase this parcel. The Company elected to not exercise the option and it terminated in November 2011. As of October 27, 2012, the Company retained the right of first offer.

(3) The following table presents the depreciation of property and equipment included on the Consolidated Statements of Operations (in thousands):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Depreciation expense	$	86,785	$	88,150	$	72,765

Trade Receivables Factoring Facility

In April 2010, the Company entered into a trade receivables factoring facility with a financial institution to sell certain of its trade receivables from customers with limited, non-credit related, recourse provisions. The sale of receivables eliminates the credit exposure of the Company in relation to these receivables. Under the terms of the factoring agreement, the maximum available amount of the factoring facility outstanding at any one time is $50.0 million, which is subject to change based on the financial institution’s approval. During the fiscal years ended October 27, 2012 and October 29, 2011, none and $50.5 million, respectively, of trade receivables were sold under the terms of the factoring facility. Sales of trade receivables are recorded as a

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reduction of trade accounts receivable. The discounts on the sale of receivables for the fiscal year ended October 29, 2011 were immaterial and are included in “Other expense, net” on the Consolidated Statement of Operations. Facility administration fees for the fiscal years ended October 27, 2012 and October 29, 2011 were immaterial and are included in “General and administrative expenses” on the Consolidated Statements of Operations.

6. Investments

The following table summarizes the Company’s short-term investments (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
October 27, 2012
Corporate bonds	$	—	$	—	$	—	$	—
October 29, 2011
Corporate bonds	$	774	$	—	$	—	$	774

Net unrealized holding gains or losses on investments, if any, are included in accumulated other comprehensive loss in the accompanying Consolidated Balance Sheets.

The carrying value of the Company’s equity investments in non-publicly traded companies at October 27, 2012 and October 29, 2011 was $7.0 million and $7.0 million, respectively.

7. Fair Value Measurements

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and also considers assumptions that market participants would use when pricing the asset or liability. The Company applies fair value measurements for both financial and nonfinancial assets and liabilities. The Company has no nonfinancial assets and liabilities that are required to be measured at fair value on a recurring basis as of October 27, 2012.

The fair value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, restricted cash, accounts payable and accrued liabilities, approximate cost because of their short maturities.

The Company did not elect to measure any eligible financial instruments at fair value and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date.

Fair Value Hierarchy

The Company utilizes a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value:

Level 1

Observable inputs that reflect quoted prices in active markets for identical assets or liabilities. Brocade’s assets utilizing Level 1 inputs include money market funds.

Level 2

Inputs that reflect quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in less active markets, or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Brocade’s assets and liabilities utilizing Level 2 inputs include corporate bonds and derivative instruments, respectively.

Level 3

Unobservable inputs that reflect the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. Brocade has no assets or liabilities utilizing Level 3 inputs.

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Assets and liabilities measured at fair value on a recurring basis as of October 27, 2012 were as follows (in thousands):

			Fair Value Measurements Using
	Balance as of October 27, 2012		Quoted Prices in Active Markets For Identical Instruments (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds (1)	$	308,960	$	308,960	$	—	$	—
Derivative assets	2,941		—		2,941		—
Total assets measured at fair value	$	311,901	$	308,960	$	2,941	$	—
Liabilities:
Derivative liabilities	$	296	$	—	$	296	$	—
Total liabilities measured at fair value	$	296	$	—	$	296	$	—

(1) Money market funds are reported within “Cash and cash equivalents” on the Consolidated Balance Sheets.

Assets and liabilities measured at fair value on a recurring basis as of October 29, 2011 were as follows (in thousands):

			Fair Value Measurements Using
	Balance as of October 29, 2011		Quoted Prices in Active Markets For Identical Instruments (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds (1)	$	138,959	$	138,959	$	—	$	—
Corporate bonds	774		—		774		—
Derivative assets	$	1,368	$	—	$	1,368	$	—
Total assets measured at fair value	$	141,101	$	138,959	$	2,142	$	—
Liabilities:
Derivative liabilities	$	1,790	$	—	$	1,790	$	—
Total liabilities measured at fair value	$	1,790	$	—	$	1,790	$	—

(1) Money market funds are reported within “Cash and cash equivalents” on the Consolidated Balance Sheets.

The Company uses a midpoint of the highest bid and lowest offering obtained from market makers to value its corporate bonds. The Company uses observable market prices for comparable instruments to value its derivative instruments.

During the fiscal year ended October 27, 2012, the Company had no transfers between levels of the fair value hierarchy of its assets measured at fair value.

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8. Borrowings

The following table provides details of the Company's long-term debt (in thousands, except percentages):

					October 27, 2012				October 29, 2011
	Maturity	Stated Annual Interest Rate			Amount		Effective Interest Rate		Amount		Effective Interest Rate
Senior Secured Notes:
2018 Notes	2018		6.625	%	$	300,000	7.05	%	$	300,000	7.05	%
2020 Notes	2020		6.875	%	300,000		7.26	%	300,000		7.26	%
Senior Secured Credit Facility:
Term loan	2014	LIBOR+	2.25	%	—		—	%	190,000		4.41	%
Capital lease obligations	2015		5.80	%	4,916		5.80	%	6,782		5.80	%
Total long-term debt					604,916				796,782
Less:
Unamortized discount					3,736				7,339
Current portion of long-term debt					1,977				40,539
Total long-term debt, net of current portion					$	599,203			$	748,904

Senior Secured Notes

In January 2010, the Company issued $300 million in aggregate principal amount of senior secured notes due 2018 (the “2018 Notes”) and $300 million in aggregate principal amount of senior secured notes due 2020 (the “2020 Notes" and together with the 2018 Notes, the “senior secured notes”). The senior secured notes bear interest payable semi-annually on January 15 and July 15 of each year. No payments were made towards the principal of the senior secured notes during the fiscal years ended October 27, 2012 and October 29, 2011.

As of October 27, 2012 and October 29, 2011, the fair value of the Company’s senior secured notes was approximately $638 million and $626 million, respectively, estimated based on broker trading prices.

On or after January 2013, the Company may redeem all or a part of the 2018 Notes at the redemption prices set forth in the Indenture governing the 2018 Notes (the 2018 Indenture), plus accrued and unpaid interest and special interest, if any, to the applicable redemption date. In addition, at any time prior to January 2013, the Company may, on one or more than one occasion, redeem some or all of the 2018 Notes at any time at a redemption price equal to 100% of the principal amount of the 2018 Notes redeemed, plus a “make-whole” premium determined as of, and accrued and unpaid interest and special interest, if any, to, the applicable redemption date. On or after January 2015, the Company may redeem all or a part of the 2020 Notes at the redemption prices set forth in the Indenture governing the 2020 Notes (the 2020 Indenture), plus accrued and unpaid interest and special interest, if any, to the applicable redemption date. In addition, at any time prior to January 2015, the Company may, on one or more than one occasion, redeem some or all of the 2020 Notes at any time at a redemption price equal to 100% of the principal amount of the 2020 Notes redeemed, plus a “make-whole” premium determined as of, and accrued and unpaid interest and special interest, if any, to the applicable redemption date. At any time prior to January 2013, the Company may also redeem up to 35% of the aggregate principal amount of the 2018 Notes and 2020 Notes, using the proceeds of certain qualified equity offerings, at the redemption prices set forth in the 2018 Indenture and the 2020 Indenture, respectively.

If the Company experiences specified change of control triggering events, it must offer to repurchase the senior secured notes at a repurchase price equal to 101% of the principal amount of the senior secured notes repurchased, plus accrued and unpaid interest and special interest, if any, to the applicable repurchase date. If the Company or its subsidiaries sell assets under certain specified circumstances, the Company must offer to repurchase the senior secured notes at a repurchase price equal to 100% of the principal amount of the senior secured notes repurchased, plus accrued and unpaid interest and special interest, if any, to the applicable repurchase date.

Each of the Indentures contains covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries to:

• pay dividends, make investments or make other restricted payments;

• incur additional indebtedness;

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• sell assets;

• enter into transactions with affiliates;

• incur liens;

• permit consensual encumbrances or restrictions on the Company’s restricted subsidiaries’ ability to pay dividends or make certain other payments to the Company;

• consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s or its restricted subsidiaries’ assets; and

• designate subsidiaries as unrestricted.

These covenants are subject to a number of other limitations and exceptions set forth in the Indentures. Each of the Indentures also includes customary events of default, including cross-defaults to other debt of the Company and its subsidiaries. The Company was in compliance with all applicable covenants of the Indentures as of October 27, 2012 and October 29, 2011.

The Company’s obligations under the senior secured notes are guaranteed by certain of the Company’s domestic subsidiaries, see Note 18, “Guarantor and Non-Guarantor Subsidiaries.”

Senior Secured Credit Facility

In October 2008, the Company entered into a credit facility agreement for (i) a five-year $1,100 million term loan facility and (ii) a five-year $125 million revolving credit facility, which includes a $25 million swing line loan sub-facility and a $25 million letter of credit sub-facility (“Senior Secured Credit Facility”).

The credit facility agreement was subsequently amended in January 2010 and June 2011 to, among other things, (i) increase flexibility under certain financial and other covenants, (ii) permit the Company to issue additional senior indebtedness and additional subordinated indebtedness, (iii) permit the Company to sell its accounts receivable and lease receivables, (iv) reduce interest rates on the term loan facility and extend the maturity date of the term loan facility to October 31, 2014, and (v) remove certain restrictions on the repurchase of the Company’s shares, provided the consolidated senior secured leverage ratio is under 2.00:1.00. In accordance with the applicable accounting guidance for debt modification and extinguishment, the Company expensed $25.5 million of debt issuance costs and original issue discount relating to the portion of the term loan that was extinguished by the June 2011 amendment. This expense was reported within “Interest expense” in the Consolidated Statements of Operations for the fiscal year ended October 29, 2011.

During the fiscal year ended October 27, 2012, the Company paid $190.0 million to pay in full the term loan facility, $170.7 million of which were voluntary prepayments.

The Company believes that the carrying value of its Senior Secured Credit Facility approximated its fair value as the interest rate was based on a floating market rate.

The Company may draw additional proceeds from the revolving credit facility in the future for ongoing working capital and other general corporate purposes. There were no principal amounts outstanding under the revolving credit facility and the full $125 million was available for future borrowing under the revolving credit facility as of October 27, 2012 and October 29, 2011.

The credit agreement contains financial covenants that require the Company to maintain a minimum consolidated fixed charge coverage ratio, a maximum consolidated leverage ratio and a maximum consolidated senior secured leverage ratio. The credit agreement also includes customary non-financial covenants (similar in nature to those under the senior secured notes) and customary events of default, including cross-defaults to the Company’s material indebtedness and change of control. The Company was in compliance with all applicable Senior Secured Credit Facility's covenants as of October 27, 2012 and October 29, 2011.

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Debt Maturities

As of October 27, 2012, our aggregate debt maturities based on outstanding principal were as follows (in thousands):

Fiscal Year	Principal Balances
2013	$	1,977
2014	2,095
2015	844
2016	—
2017	—
Thereafter	600,000
Total	$	604,916

9. Commitments and Contingencies

Operating Leases

The Company leases certain facilities and certain equipment under various operating agreements expiring through March 2021. In connection with its facilities lease agreements, the Company has signed unconditional, irrevocable letters of credit totaling $0.2 million as security for the leases.

The following table presents the composition of net rent expense included on the Consolidated Statements of Operations (in thousands):

	Fiscal Year Ended
	October 27, 2012			October 29, 2011			October 30, 2010
Rent expense	$	25,867		$	26,576		$	35,781
Less: Sublease income	(6,606		)	(5,643		)	(4,762		)
	$	19,261		$	20,933		$	31,019

Future minimum lease payments under all non-cancelable operating leases as of October 27, 2012, excluding the contractual sublease income of $28.7 million, are as follows (in thousands):

Fiscal Year	Operating Leases
2013	$	22,471
2014	18,577
2015	15,311
2016	13,807
2017	5,638
Thereafter	6,585
Total minimum lease payments	$	82,389

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Capital Lease Obligations

Future minimum lease payments under all non-cancelable capital leases as of October 27, 2012 are as follows (in thousands):

Fiscal Year	Capital Leases
2013	$	2,221
2014	2,221
2015	862
2016	—
Total minimum lease payments	5,304
Less: Amount representing interest	(388		)
Present value of net minimum lease payments	$	4,916

Product Warranties

The Company’s accrued liability for estimated future warranty costs is included in “Other accrued liabilities” in the accompanying Consolidated Balance Sheets. The following table summarizes the activity related to the Company’s accrued liability for estimated future warranty costs during the fiscal years ended October 27, 2012 and October 29, 2011 (in thousands):

	Accrued Warranty
	Twelve Months Ended
	October 27, 2012			October 29, 2011
Beginning balance	$	11,298		$	5,980
Liabilities accrued for warranties issued during the period	5,929			8,388
Warranty claims paid and used during the period	(575		)	(1,394		)
Changes in liability for pre-existing warranties during the period	(2,199		)	(1,676		)
Ending balance	$	14,453		$	11,298

In addition, the Company has standard defense and indemnification clauses contained within its various customer contracts. As such, the Company indemnifies the parties to whom it sells its products with respect to the Company’s product, alone or potentially in combination with others, infringing upon any patents, trademarks, copyrights, or trade secrets, as well as against bodily injury or damage to real or tangible personal property caused by a defective Company product. As of October 27, 2012, Brocade was not aware of any events or circumstances that have resulted in a material customer contract-related indemnification liability to the Company.

Manufacturing and Purchase Commitments

Brocade has manufacturing arrangements with CMs under which Brocade provides twelve-month product forecasts and places purchase orders in advance of the scheduled delivery of products to Brocade’s customers. The required lead time for placing orders with the CMs depends on the specific product. Brocade issues purchase orders and the CMs then generate invoices based on prices and payment terms mutually agreed upon and set forth in those purchase orders. Although the purchase orders Brocade places with its CMs are cancellable, the terms of the agreements require Brocade to purchase all inventory components not returnable, usable by, or sold to other customers of the CMs.

As of October 27, 2012, the Company’s aggregate commitment to the CMs for inventory components used in the manufacture of Brocade products was $212.0 million, which the Company expects to utilize during future normal ongoing operations, net of a purchase commitments reserve of $4.3 million. The Company’s purchase commitments reserve reflects the Company’s estimate of purchase commitments it does not expect to consume in normal ongoing operations within the next twelve months.

Income Taxes

The Company is subject to several ongoing income tax audits. For additional discussion, see Note 13, “Income Taxes,” of the Notes to Consolidated Financial Statements. The Company believes it has adequate reserves for all open tax years.

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Legal Proceedings

Stockholder Litigation

In March 2012, a stockholder filed a complaint in Santa Clara County Superior Court captioned Stephen Knee vs. Brocade Communications Systems, Inc., et al. alleging that the proposal in Brocade’s proxy for its 2012 annual meeting of stockholders seeking additional shares for the 2009 Stock Plan pool was misleading and incomplete; the plaintiff claimed the right to enjoin the stockholders’ vote. In early April 2012, the plaintiff filed a motion for preliminary injunction seeking to enjoin the stockholders’ vote on the proposal. Brocade filed an opposition to the plaintiff’s motion for preliminary injunction. On April 10, 2012, the Court held a hearing and issued an order granting the plaintiff’s motion. On April 12, 2012, the Court entered a stipulation and order regarding settlement in which Brocade agreed to postpone the vote on the proposal at least seven days and to issue supplemental disclosures regarding the proposal. The supplemental disclosures were filed with the SEC on April 12, 2012. Brocade’s stockholders approved the proposal on April 20, 2012. On July 26, 2012, the parties signed a Stipulation of Settlement regarding the matter. On August 10, 2012, plaintiff filed a Motion for Preliminary Approval of Settlement. On December 7, 2012, plaintiff filed a Motion for Final Approval of Settlement. On December 13, 2012, the Court issued a tentative ruling to grant the Motion for Final Approval of Settlement.

Intellectual Property Litigation

On June 21, 2005, Enterasys Networks, Inc. (“Enterasys”) filed a lawsuit against Foundry Networks, LLC (formerly Foundry Networks, Inc.) (“Foundry”) (and Extreme Networks, Inc.) in the United States District Court for the District of Massachusetts alleging that certain of Foundry's products infringe six of Enterasys’ patents and seeking injunctive relief, as well as unspecified damages. The Court severed the claims against Extreme from the claims against Foundry for trial, and Enterasys subsequently added Brocade as a defendant. On August 28, 2007, the Court granted Foundry’s motion to stay the case based on petitions that Foundry had filed with the United States Patent and Trademark Office (“USPTO”) in 2007 for reexamination of five of the six Enterasys patents. Two of the patents received final rejections during their respective reexaminations, in which the USPTO held that the claims were invalid. Enterasys filed appeals of those rejections with the USPTO’s Board of Patent Appeals and Interferences in 2009. The USPTO's Board partially affirmed one and partially reversed the other of those two rejections on January 24, 2011, and Enterasys did not appeal further, which ended the proceedings on those two patents. The USPTO has issued reexamination certificates for the remaining three patents undergoing reexamination indicating that the patents were valid over the references that had been submitted. Meanwhile, on May 21, 2010, the Court lifted the stay of the litigation, and Enterasys subsequently dropped from the litigation the two patents it appealed at the USPTO. Accordingly, four patents remain at issue in the litigation. No trial date has been set.

On September 6, 2006, Chrimar Systems, Inc. (“Chrimar”) filed a lawsuit against Foundry (and D-Link Corporation and PowerDsine, Ltd.) in the United States District Court for the Eastern District of Michigan alleging that certain of Foundry’s products infringe Chrimar’s U.S. Patent 5,406,260 and seeking injunctive relief, as well as unspecified damages. Discovery has been completed. On June 1, 2012, Brocade filed its second Supplemental Statement of Material Facts In Support of the Motion for Summary Judgment of Invalidity of Paradigm Claim 17 of the 5,406,260 patent. On August 1, 2012, the Court issued its Memorandum and Order Granting Defendant’s Motion for Summary Judgment of Invalidity and dismissed the case. On August 30, 2012, Chrimar filed a notice of appeal and on November 5, 2012 filed its appeal brief. The appeal is currently pending in the U.S. Court of Appeals for the Federal Circuit, Case No. 2012-1641.

On August 4, 2010, Brocade and Foundry (“Plaintiffs”) filed a lawsuit against A10 Networks, Inc. (“A10”), A10’s founder and other individuals in the United States District Court for the Northern District of California. On October 29, 2010, Plaintiffs filed an amended complaint. In the amended complaint, Brocade alleged that A10 and the individual defendants have misappropriated Plaintiff’s trade secrets, infringed copyrighted works, interfered with existing contracts between the Plaintiffs and their employees, breached contracts, breached their fiduciary duties and duties of loyalty, and that certain of A10’s products infringe 13 of Brocade’s patents. Brocade is seeking injunctive relief, as well as monetary damages. On May 16, 2011, A10 filed an answer and counterclaim alleging that certain of Brocade’s products infringe a patent recently acquired by A10 and seeking injunctive relief, as well as unspecified damages. In addition, A10 filed petitions with the USPTO to have each of 13 of the patents reexamined, in view of prior art that A10 alleges invalidates the patents. The petitions were granted, and reexaminations of the patents are in progress. On January 6, 2012 the Court granted Brocade’s summary judgment motion of non-infringement of the A10 patent. Trial on Brocade’s claims against A10 and the individual defendants commenced on July 16, 2012. On August 6, 2012, the jury found A10 responsible for intellectual property infringement and unfair competition, awarding approximately $112 million to Brocade. On August 7, 2012, A10 issued a press release that reflected a different interpretation of the jury verdict. A10 has stated that it will take appropriate action to set aside the verdict and reverse the award of damages. A10 also stated that it intends to seek judgment in its favor as a matter of law. On August 27, 2012, the Court entered a judgment in favor of Brocade without commenting on the differing interpretations of the jury verdict or any post-trial

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motions. On November 8, 2012 the Court heard argument on the post-trial motions, and Brocade expects that the Court will issue its decision in the coming months. The outcome of such motions cannot be predicted with any certainty.

On September 9, 2011, A10 filed a lawsuit against Brocade in the United States District Court for the Northern District of California. A10 alleged that certain of Brocade’s products infringed two patents acquired by A10. After Brocade moved to dismiss the complaint, A10 dismissed one of its patents-in-suit, leaving only one patent at issue. In lieu of answering the complaint, Brocade filed a new motion to dismiss the complaint, which was granted. On June 27, 2012, the Court entered a Final Judgment dismissing A10’s action. A10 has appealed the Judgment, and the appeal is pending before the U.S. Court of Appeals for the Federal Circuit.

General

From time to time, the Company is subject to other legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of trademarks, copyrights, patents and/or other intellectual property rights and commercial contract disputes. Third parties assert patent infringement claims against the Company from time to time in the form of letters, lawsuits and other forms of communication. In addition, from time to time, the Company receives notification from customers claiming that they are entitled to indemnification or other obligations from the Company related to infringement claims made against them by third parties. Litigation, even if the Company is ultimately successful, can be costly and divert management’s attention away from the day-to-day operations of the Company.

On a quarterly basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and, when possible, estimates of reasonably possible losses or ranges of loss based on such reviews. However, litigation is inherently unpredictable, and outcomes are typically uncertain, and the Company’s past experience does not provide any additional visibility or predictability to estimate the range of loss that may occur because the costs, outcome and status of these types of claims and proceedings have varied significantly in the past. The Company is not currently able to reasonably estimate the possible loss or range of loss from the above legal proceedings where the Company is the defendant and, accordingly, the Company is unable to estimate the effects of the above on its financial condition, results of operations or cash flows.

The Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

10. Derivative Instruments and Hedging Activities

In the normal course of business, the Company is exposed to fluctuations in interest rates and the exchange rates associated with foreign currencies. The Company’s primary objective for holding derivative financial instruments is to manage foreign currency exchange rate risk. The Company currently does not enter into derivative instruments to manage credit risk. However, the Company manages its exposure to credit risk through its investment policies. The Company generally enters into derivative transactions with high-credit quality counterparties and, by policy, limits the amount of credit exposure to any one counterparty based on its analysis of that counterparty’s relative credit standing.

The amounts subject to credit risk related to derivative instruments are generally limited to the amounts, if any, by which counterparty’s obligations exceed the Company’s obligations with that counterparty.

Foreign Currency Exchange Rate Risk

A majority of the Company’s revenue, expense and capital purchasing activities is transacted in U.S. dollars. However, the Company is exposed to foreign currency exchange rate risk inherent in conducting business globally in numerous currencies. The Company is primarily exposed to foreign currency fluctuations related to operating expenses denominated in currencies other than the U.S. dollar, of which the most significant to its operations for the fiscal year ended October 27, 2012 were the Chinese yuan, the euro, the Japanese yen, the Indian rupee, the British pound, the Singapore dollar and the Swiss franc. The Company has established a foreign currency risk management program to protect against the volatility of future cash flows caused by changes in foreign currency exchange rates. This program reduces, but does not always entirely eliminate, the impact of foreign currency exchange rate movements. The Company’s foreign currency risk management program includes foreign currency derivatives with cash flow hedge accounting designation that utilizes foreign currency forward and option contracts to hedge exposures to the variability in the U.S. dollar equivalent of anticipated non-U.S. dollar-denominated cash flows. These instruments generally have a maturity of less than one year. For these derivatives, the Company reports the after-tax gain or loss from the effective portion of the hedge as a component of accumulated other comprehensive loss in stockholders’ equity and reclassifies it into earnings in the same period in which the hedged transaction affects earnings. Prior to fiscal year 2011, these gains or losses were included in “Other expenses” on the consolidated statements of operations. Beginning in the first fiscal quarter of 2011, these gains or losses are now presented within “Cost of revenues” and “Operating

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expenses,” to match the underlying exposure to the related hedge results. Prior period amounts are not material and have not been reclassified.

Net gains (losses) relating to the effective portion of foreign currency derivatives recorded in the consolidated statements of operations are as follows (in thousands):

	Fiscal Year Ended October 27, 2012			Fiscal Year Ended October 29, 2011		Fiscal Year Ended October 30, 2010
Cost of revenues	$	(1,043	)	$	882	$	—
Research and development	(1,094		)	496		—
Sales and marketing	(5,704		)	5,498		—
General and Administrative	(510		)	416		—
Other expenses	—			—		(5,285		)
Total	$	(8,351	)	$	7,292	$	(5,285	)

The net foreign currency exchange gains and losses recorded as part of “Other expenses” were losses of $1.5 million, $0.6 million and $6.6 million for the fiscal years ended October 27, 2012, October 29, 2011 and October 30, 2010, respectively.

Gross unrealized loss positions are recorded within “Other accrued liabilities” and “Other non-current liabilities,” and gross unrealized gain positions are recorded within “Prepaid expenses and other current assets.” As of October 27, 2012, the Company had gross unrealized loss positions of $0.3 million and gross unrealized gain positions of $2.9 million included in “Other accrued liabilities” and “Prepaid expenses and other current assets,” respectively. Effective cash flow hedges are reported as a component of accumulated other comprehensive loss. Ineffective cash flow hedges are included in the Company’s net income as part of “Other expense, net.” The amount recorded on ineffective cash flow hedges was not significant.

Volume of Derivative Activity

Total gross notional amounts, presented by currency, are as follows (in thousands):

	Derivatives Designated as Hedging Instruments				Derivatives Not Designated as Hedging Instruments
In United States Dollars	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Euro	$	43,357	$	57,935	$	—	$	—
British pound	20,499		25,282		—		—
India rupee	16,046		—		—		—
Singapore dollar	12,918		16,136		—		—
Swiss franc	8,575		13,060		—		5,012
Japanese yen	3,776		17,957		12,068		—
Total	$	105,171	$	130,370	$	12,068	$	5,012

The Company utilizes a rolling hedge strategy for the majority of its foreign currency derivative instruments with cash flow hedge accounting designation that hedges exposures to the variability in the U.S. dollar equivalent of anticipated non-U.S. dollar-denominated cash flows. All of the Company’s foreign currency forward contracts are single delivery, which are settled at maturity involving one cash payment exchange.

11. Employee Compensation Plans

In April 2009, the stockholders of Brocade approved the Company’s 2009 Stock Plan, 2009 Director Plan and 2009 Employee Stock Purchase Plan (“2009 ESPP”), and such plans are now part of the Company’s equity compensation plans. The Company’s 1999 Stock Plan, 1999 Director Option Plan and 1999 Employee Stock Purchase Plan each expired in March 2009 by their terms.

In April 2012, the stockholders of Brocade approved an amendment and restatement of the Company's 2009 Stock Plan and 2009 ESPP to increase the plans' share reserves by 35.0 million and 30.0 million shares, respectively.

2009 Stock Plan

The 2009 Stock Plan provides for the grant of stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares, and other stock or cash awards to employees, directors and consultants. Per

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the terms of the 2009 Stock Plan, as amended, 83.0 million shares of the Company’s common stock are reserved for issuance under the plan, plus the following:

• Any shares subject to stock options or similar awards granted under the Company’s 1999 Stock Plan, 1999 Nonstatutory Stock Option Plan (“NSO Plan”) and 2001 McDATA Equity Incentive Plan that expire or otherwise terminate without having been exercised in full; and

• Shares issued pursuant to awards granted under the Company’s 1999 Stock Plan, 1999 NSO Plan and 2001 McDATA Equity Incentive Plan that are forfeited to or repurchased by the Company, with the maximum number of shares to be added to the 2009 Stock Plan pursuant to this clause equal to 40.3 million shares.

2009 Director Plan

The 2009 Director Plan provides for the grant of stock options and restricted stock units to non-employee directors of the Company. The Board of Directors has reserved 2.0 million shares of the Company’s common stock for issuance under the 2009 Director Plan, plus any shares subject to stock options or similar awards granted under the Company’s 1999 Director Option Plan that expire or otherwise terminate without having been exercised in full, and shares issued pursuant to awards granted under the Company’s 1999 Director Option Plan that are forfeited to or repurchased by the Company, with the maximum number of shares to be added to the 2009 Director Plan pursuant to this clause equal to 0.9 million shares.

2009 Employee Stock Purchase Plan

The 2009 ESPP permits eligible employees to purchase shares of the Company’s common stock through payroll deductions for up to 15% of qualified compensation during the offering period. The purchase price is 85% of the lesser of the fair market value of the Company’s common stock on (i) the first trading day of the offering period, or (ii) the last day of each six-month purchase period; provided, however, that the purchase price for subsequent offering periods may be determined by the administrator, subject to compliance with the terms of the 2009 ESPP. A total of 65.0 million shares of the Company’s common stock are reserved for issuance under the 2009 ESPP, as amended. The 2009 ESPP is implemented through consecutive, overlapping offering periods of up to approximately twenty-four months. The offering periods generally start with the first trading day on or after June 1 and December 1 each year and end on the last trading day in the periods ending twenty-four months later, unless the fair market value of the Company’s common stock on the last day of a purchase period is lower than the fair market value of the Company’s common stock on the first trading day of the offering period, in which case the offering period will end early, immediately after the purchase period, and a new offering period will commence on or about such date. Each offering period will be divided into four purchase periods of approximately six months in length. Eligible employees may purchase no more than 3,750 shares of the Company’s common stock during each six-month purchase period. As of October 27, 2012, 38.7 million shares were available for issuance under the 2009 ESPP.

Equity Compensation Plans

The Company may grant stock options, restricted stock awards and restricted stock units for shares of the Company’s common stock and other types of equity compensation awards to its employees and directors under the various equity compensation plans described above. In accordance with the terms of the 2009 Stock Plan and the 2009 Director Plan, each award granted with an exercise price that is less than fair market value, which includes all grants of restricted stock awards, restricted stock units, performance shares and performance units, will count against the applicable plan’s share reserve as 1.56 shares for every one share subject to such award. In addition, the exercise price of stock options and stock appreciation rights granted under the 2009 Stock Plan must be at least equal to the fair market value of the Company’s common stock on the date of grant and the exercise price of incentive stock options granted to any participant who owns more than 10% of the total voting power of all classes of the Company’s outstanding stock must be at least 110% of the fair market value of the Company’s common stock on the date of grant.

The term of a stock option and a stock appreciation right may not exceed seven years, except that, with respect to any participant who owns 10% of the voting power of all classes of the Company’s outstanding capital stock, the term of an incentive stock option may not exceed five years. The majority of the stock options, restricted stock awards and restricted stock units granted under the Company’s equity compensation plans vest over a period of three to four years. Certain options and awards granted under the 2009 Stock Plan vest over shorter or longer periods.

At October 27, 2012, approximately 126.7 million shares were authorized for future issuance under the Company’s equity compensation plans, which include stock options, shares to be issued pursuant to the 2009 ESPP, restricted stock units and other awards, and shares of Brocade common stock that became issuable in connection with the assumption or substitution of Foundry equity awards. A total of 76.0 million shares of common stock were available for grant under the Company’s equity compensation plans as of October 27, 2012. At October 29, 2011, approximately 100.6 million shares were authorized for

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future issuance under the Company’s equity compensation plans, which include stock options, shares to be issued pursuant to the 2009 ESPP, restricted stock units and other awards, and shares of Brocade common stock that became issuable in connection with the assumption or substitution of Foundry equity awards. A total of 26.5 million shares of common stock were available for grant under the Company’s equity compensation plans as of October 29, 2011. Awards that expire, or are canceled without delivery of shares, generally become available for issuance under the Company’s equity compensation plans.

1999 Nonstatutory Stock Option Plan

In September 1999, the Board of Directors approved the Company’s 1999 NSO Plan. The 1999 NSO Plan provides for the grant of nonstatutory stock options to employees and consultants. A total of 51.4 million shares of the Company’s common stock have been reserved for issuance under the 1999 NSO Plan. As of October 27, 2012, the Company has reserved 5.2 million shares of authorized but unissued shares of common stock for future issuance upon exercise of options under the 1999 NSO Plan.

McDATA Equity Plans

On January 29, 2007, effective upon the consummation of the merger, Brocade assumed the McDATA equity plans. As of October 27, 2012, options to purchase approximately 1.6 million shares of converted common stock, restricted stock and other equity awards remained outstanding under former McDATA equity plans.

Employee 401(k) Plan

The Company sponsors the Brocade Communications Systems, Inc. 401(k) Plan (“401(k) Plan”), which qualifies under Section 401(k) of the Internal Revenue Code and is designed to provide retirement benefits for its eligible employees through tax-deferred salary deductions.

Employees may elect to contribute up to 60% of their eligible compensation to the 401(k) Plan. Employee contributions are limited to a maximum annual amount as set periodically by the Internal Revenue Service (“IRS”). The Company matches employee contributions dollar for dollar up to a maximum of $3,000 per calendar year per person. All matching contributions vest immediately. The Company’s matching contributions to the 401(k) Plan totaled $9.1 million, $9.3 million and $8.7 million for the years ended October 27, 2012, October 29, 2011 and October 30, 2010, respectively.

12. Stock-Based Compensation

Equity Compensation Plan Information

The following table summarizes information with respect to shares of the Company’s common stock that may be issued under the Company’s existing equity compensation plans as of October 27, 2012 (in thousands, except per share amounts):

Plan Category	A Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		B Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		C Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excludes Securities Reflected in Column A)
Equity compensation plans approved by stockholders (1)	23,561	(3)	$	5.52	76,048	(4)
Equity compensation plans not approved by stockholders (2)	5,936	(5)	$	5.06	—
Total	29,497		$	5.43	76,048

(1) Primarily consist of the 2009 ESPP, the 2009 and 1999 Director Plans and the 2009 and 1999 Stock Plans.

(2) Consist solely of the 1999 NSO Plan described in Note 11, “Employee Compensation Plans,” of the Notes to Consolidated Financial Statements and Foundry’s 2000 NSO Plan, which was assumed in connection with our acquisition of Foundry.

(3) Amount excludes purchase rights accrued under the 2009 ESPP. As of October 27, 2012, the 2009 ESPP had a stockholder-approved reserve of 65.0 million shares, of which 38.7 million shares were available for future issuance.

(4) Amount consists of shares available for future issuance under the 2009 ESPP, the 2009 Director Plan and the 2009 Stock Plan.

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(5) Substantially all shares were granted prior to the fiscal year ended October 25, 2003. Information relating to equity compensation plans is set forth in Note 11, “Employee Compensation Plans,” of the Notes to Consolidated Financial Statements.

Stock-based compensation expense, net of estimated forfeitures, was included in the following line items on the Consolidated Statements of Operations as follows (in thousands):

	Fiscal Year Ended October 27, 2012		Fiscal Year Ended October 29, 2011		Fiscal Year Ended October 30, 2010
Cost of revenues	$	15,433	$	15,607	$	13,552
Research and development	17,952		18,959		27,795
Sales and marketing	33,257		36,068		45,232
General and administrative	10,527		12,442		15,046
Total stock-based compensation	$	77,169	$	83,076	$	101,625

The following table presents stock-based compensation expense, net of estimated forfeitures, by grant type (in thousands):

	Fiscal Year Ended October 27, 2012		Fiscal Year Ended October 29, 2011		Fiscal Year Ended October 30, 2010
Stock options, including variable options	$	1,079	$	3,483	$	12,383
Restricted stock awards and restricted stock units (“RSUs”)	56,791		55,750		55,580
Employee stock purchase plan (“ESPP”)	19,299		23,843		33,662
Total stock-based compensation	$	77,169	$	83,076	$	101,625

The following table presents unrecognized compensation expense, net of estimated forfeitures, of the Company’s equity compensation plans as of October 27, 2012, which is expected to be recognized over the following weighted-average periods, (in thousands, except for weighted-average period):

	Unrecognized Compensation Expense		Weighted- Average Period (in years)
Stock options	$	635	0.54
RSUs	$	95,152	2.01
ESPP	$	16,737	1.11

Stock Options

The fair value of each option granted during the respective period is estimated on the date of grant using the Black-Scholes valuation model and the assumptions noted in the following table. The dividend yield reflects that Brocade has not paid any cash dividends since inception and does not anticipate paying cash dividends in the foreseeable future. The risk-free interest rate is based on the implied yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected term of the option. The expected volatility is based on an equal weighted-average of implied volatilities from traded options of the Company’s common stock and historical volatility of the Company’s common stock. The expected term is based on historical exercise behavior.

	Fiscal Year Ended
Stock Options	October 27, 2012		October 29, 2011		October 30, 2010
Expected dividend yield	0.0	%	0.0	%	0.0	%
Risk-free interest rate	0.1 - 0.8%		0.1 - 0.6%		0.3 - 2.0%
Expected volatility	48.8 - 56.5%		50.3 - 61.9%		49.3 - 53.3%
Expected term (in years)	4.0		4.0		4.0

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Compensation expense computed under the fair value method for stock options issued is being amortized under a graded vesting method over the options’ vesting period. A summary of stock option activity under the equity compensation plans for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 is presented as follows:

	Shares (in  thousands)		Weighted-Average Exercise Price		Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at October 31, 2009	89,647		$	5.04			3.17	$	380,991
Granted	1,920		6.76		$	2.89
Exercised	(14,210	)	2.95					51,700
Forfeited or expired	(5,691	)	13.68
Outstanding at October 30, 2010	71,666		4.82				2.58	146,199
Granted	243		5.47		$	2.23
Exercised	(16,814	)	3.48					46,047
Forfeited or expired	(4,330	)	9.03
Outstanding at October 29, 2011	50,765		4.91				1.98	35,494
Granted	160		5.55		$	2.39
Exercised	(16,993	)	3.39					36,498
Forfeited or expired	(4,435	)	7.34
Outstanding at October 27, 2012	29,497		5.43				1.61	26,077
Vested and expected to vest at October 27, 2012	29,518		$	5.42			1.60	$	26,076
Exercisable and vested at:
October 27, 2012	28,591		$	5.40			1.51	$	25,985

From May 1999 through July 2003, the Company granted 98.8 million options subject to variable accounting as the measurement date of the options granted was not certain. As of October 27, 2012, 0.1 million options with a weighted-average exercise price of $4.85 and a weighted-average contractual life of 0.41 years remain outstanding and continue to be accounted for under variable accounting.

Employee Stock Purchase Plan

Under Brocade’s employee stock purchase plans, including the 2009 ESPP and the 1999 Employee Stock Purchase Plan (together, the “Brocade ESPP”), eligible employees can participate and purchase shares semi-annually at the lower of 85% of the fair market value of the Company’s common stock on (i) the first trading day of the offering period, or (ii) the last day of each six-month purchase period. The Brocade ESPP permits eligible employees to purchase common stock through payroll deductions for up to 15% of qualified compensation. The Company accounts for the Brocade ESPP as a compensatory plan and compensation expense is being amortized under a graded vesting method over the twenty-four month offering period. In addition, the Company accounts for changes in percentage contribution elected by employees, as well as decreases in the Company’s common stock price on the last day of each six-month purchase period as compared to the common stock price on the first trading day of the offering period, by applying modification accounting which results in an increase in compensation expense during the period of modification.

The fair value of the option component of Brocade ESPP shares was estimated using the Black-Scholes option pricing model using the following weighted-average assumptions:

	Fiscal Year Ended
Employee Stock Purchase Plan	October 27, 2012		October 29, 2011		October 30, 2010
Expected dividend yield	0.0	%	0.0	%	0.0	%
Risk-free interest rate	0.2	%	0.6	%	0.6	%
Expected volatility	52.5	%	65.5	%	67.8	%
Expected term (in years)	1.5		1.1		1.5

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Restricted Stock Units

A summary of the changes in restricted stock units outstanding under Brocade’s equity compensation plans during the years ended October 27, 2012, October 29, 2011 and October 30, 2010 is presented as follows:

	Shares (in  thousands)		Weighted-Average Grant Date  Fair Value
Nonvested at October 31, 2009	32,693		$	4.37
Granted	10,801		5.84
Vested	(12,753	)	5.26
Forfeited	(2,570	)	6.74
Nonvested at October 30, 2010	28,171		4.32
Granted	12,754		5.68
Vested	(13,434	)	5.82
Forfeited	(4,010	)	6.37
Nonvested at October 29, 2011	23,481		3.85
Granted	11,166		4.97
Vested	(9,597	)	4.82
Forfeited	(3,054	)	5.92
Nonvested at October 27, 2012	21,996		3.71
Vested and expected to vest at October 27, 2012	20,277		$	3.71

Typically, vesting of restricted stock units occurs over one to four years and is subject to the employee’s continuing service to Brocade.

The aggregate intrinsic value of restricted stock units outstanding at October 27, 2012, October 29, 2011 and October 30, 2010 was $106.1 million, $105.9 million and $178.9 million, respectively.

13. Income Taxes

The domestic and international components of income (loss) before provision for (benefit from) income taxes for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 are presented as follows (in thousands):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011 (1)			October 30, 2010
United States	$	115,736	$	(42,118	)	$	36,015
International	108,665		121,546			70,955
Total	$	224,401	$	79,428		$	106,970

(1) Excludes the impact of repatriation of $200 million from offshore operations to the United States.

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The income tax provision (benefit) for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 consisted of the following (in thousands):

	Fiscal Year Ended
	October 27, 2012			October 29, 2011			October 30, 2010
U.S. federal taxes:
Current	$	(11,750	)	$	774		$	(30,768	)
Deferred	33,981			28,111			19,390
Total U.S. federal taxes	22,231			28,885			(11,378		)
State taxes:
Current	613			1,250			4,282
Deferred	(2,412		)	(9,187		)	(10,506		)
Total state taxes	(1,799		)	(7,937		)	(6,224		)
Non-U.S. taxes:
Current	8,770			7,854			8,964
Deferred	18			16			(915		)
Total non-U.S. taxes	8,788			7,870			8,049
Total	$	29,220		$	28,818		$	(9,553	)

The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 consisted of the following:

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
U.S. federal statutory income tax rate	35.0	%	35.0	%	35.0	%
State taxes, net of federal tax benefit	3.8		3.3		4.0
Foreign income taxed at other than U.S. rates	(17.7	)	(48.2	)	(32.6	)
Stock-based compensation	3.5		11.8		12.6
Research and development credit	(3.5	)	(17.6	)	(10.4	)
Permanent items	0.3		1.2		0.9
Change in liabilities for uncertain tax positions	(6.5	)	2.5		(29.0	)
Repatriation from offshore operations	—		62.6		—
Audit settlement and reinstated tax credit	(2.9	)	(11.7	)	10.2
Other	1.0		(2.6	)	0.4
Effective tax rate	13.0	%	36.3	%	(8.9	)%

The effective tax rate in fiscal year 2012 is lower than the 35% U.S. federal statutory rate primarily due to earnings in our subsidiaries outside of the U.S. in jurisdictions where our effective tax rate is lower than in the U.S. Earnings of our subsidiaries outside of the U.S. primarily relate to our European and Asia Pacific businesses, which are headquartered in Switzerland. In the fourth fiscal quarter of 2011, we repatriated $200 million from our offshore operations, with which we repurchased approximately 46.5 million shares of our Company’s stock. The Company recorded tax expense of $49.7 million related to this one-time cash repatriation to fund the stock repurchase program. As of October 27, 2012, U.S. federal income taxes and foreign withholding taxes were not provided for on an estimated cumulative total of $370.5 million of undistributed earnings of the Company’s foreign subsidiaries. The Company intends to reinvest current and accumulated earnings of its foreign subsidiaries for expansion of its business operations outside the United States for an indefinite period of time. Our existing cash, cash equivalents and short-term investments totaled $713.2 million as of October 27, 2012. Of this amount, approximately 60% was held by our foreign subsidiaries. If these earnings were distributed to the United States in the form of dividends or otherwise, or if the shares of the relevant foreign subsidiaries were sold or otherwise transferred, the Company could be subject to additional U.S. income taxes, net of foreign tax credits, and foreign withholding taxes. Determination of the amount of unrecognized deferred income tax liability related to these earnings is not practicable.

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The components of deferred tax assets and deferred tax liabilities for the years ended October 27, 2012 and October 29, 2011 are presented as follows (in thousands):

	October 27, 2012			October 29, 2011
Net operating loss carry forwards	$	63,750		$	132,765
Stock-based compensation expense	22,582			28,886
Tax credit carry forwards	145,688			141,209
Reserves and accruals	94,755			104,135
Capitalized research and development expenditures	3,232			8,475
Net unrealized losses on investments	468			330
Gross deferred tax assets	330,475			415,800
Less: Valuation allowance	(22,269		)	(22,566		)
Total deferred tax assets	308,206			393,234
Acquired intangibles and goodwill	(50,266		)	(92,481		)
Fixed assets	(28,110		)	(34,992		)
Other	(2,116		)	(2,129		)
Total deferred tax liabilities	(80,492		)	(129,602		)
Total net deferred tax assets	$	227,714		$	263,632

As of October 27, 2012, the Company believed that sufficient positive evidence existed from historical operations and projections of taxable income in future years to conclude that it was more likely than not that the Company will realize its deferred tax assets. Accordingly, the Company applied a valuation allowance only on the deferred tax assets relating to capital loss carryforwards, due to limited carryforward periods and the character of such tax attributes.

On November 6, 2012, California voters approved California Proposition 39. Proposition 39 affects future California state income tax apportionment that may have a significant negative impact on the Company’s ability to realize certain California deferred tax assets. See Note 19, “Subsequent Events,” of the Notes to Consolidated Financial Statements for more detail about the effect on the Company's financial statements.

As of October 27, 2012, the Company had federal net operating loss carryforwards of $603.1 million, California state net operating loss carryforwards of $71.4 million and other significant state net operating loss carryforwards of approximately $165.5 million. Additionally, the Company had $127.2 million of federal tax credits and $149.8 million of state tax credits. The federal net operating loss and other tax credit carryforwards expire on various dates between fiscal year 2013 through 2032. The state net operating loss and credit carryforwards expire on various dates between fiscal year 2013 through 2032. Under the current tax law, net operating loss and credit carryforwards available to offset future income in any given year may be limited by statute or upon the occurrence of certain events, including significant changes in ownership interests.

As a result of the McDATA and Foundry acquisitions, all the tax attributes from both companies are subject to an annual limitation, but the Company expects to use all the tax attributes before expiration.

The Company applies a recognition threshold and measurement attribute for the financial statement recognition and measurement of an income tax position taken or expected to be taken on a tax return. Recognition of a tax position is determined when it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority.

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A reconciliation of the beginning and ending amount of total gross unrecognized tax benefits, excluding accrued net interest and penalties, is as follows (in thousands):

	October 27, 2012			October 29, 2011
Unrecognized tax benefits, beginning balance	$	149,430		$	136,812
Gross increases for tax positions taken in prior periods	797			9,066
Gross decreases for tax positions taken in prior periods	(26,001		)	(1,730		)
Gross increases for tax positions taken in current period	6,633			9,601
Changes due to settlements with taxing authorities	(6,771		)	(1,051		)
Reductions resulting from lapses of statutes of limitations	(4,835		)	(3,268		)
Unrecognized tax benefits, ending balance	$	119,253		$	149,430

As of October 27, 2012, the Company had net unrecognized tax benefits of $105.2 million, all of which, if recognized, would result in a reduction of the Company’s effective tax rate.

In general, the Company’s provision for income taxes differs from the tax computed at the U.S. federal statutory income tax rate due to state taxes, the effect of non-U.S. operations, non-deductible stock-based compensation expense and adjustments to unrecognized tax benefits.

For the fiscal year ended October 27, 2012, the Company recorded an income tax expense of $29.2 million. The tax reported was impacted by the effect of a decrease in benefit from the federal research and development tax credit which expired on December 31, 2011, offset by discrete benefits from reserve releases of settled tax audits, and the expiration of certain statutes of limitations.

For the fiscal year ended October 29, 2011, the Company recorded an income tax expense of $28.8 million. The tax reported was primarily as a result of cash repatriated from our foreign subsidiary and foreign tax expenses, offset by discrete benefits from the retroactive reinstatement of the federal research and development tax credit provision, reserve releases of settled tax audits, and the expiration of certain statutes of limitations.

The Internal Revenue Service (“IRS”) and other tax authorities regularly examine the Company’s income tax returns. The IRS is currently examining fiscal years 2009 and 2010. In addition, the IRS has also examined the Company’s income tax returns for fiscal years 2007 and 2008, and in May 2011, the Company received the IRS Revenue Agent’s Report. The IRS is contesting the Company’s transfer pricing for the cost sharing and buy-in arrangements with its foreign subsidiaries. The IRS’ proposed adjustment would offset approximately $317.4 million of the Company’s net operating loss carryforwards. The Company has filed a protest to appeal the amount of proposed adjustments in the Revenue Agent’s Report with the Appeals Office of the IRS. The Company believes it has sufficient reserves recorded for the ultimate settlement amount on this issue. Furthermore, the Company is in negotiations with foreign tax authorities to obtain correlative relief on transfer pricing adjustments settled with the IRS. We believe that our reserves for unrecognized tax benefits are adequate for all open tax years. The timing of the resolution of income tax examinations, as well as the amounts and timing of related settlements, is highly uncertain. The Company believes that before the end of fiscal year 2013, it is reasonably possible that either certain audits will conclude or the statutes of limitations relating to certain income tax examination periods will expire, or both. As such, after we reach settlement with the tax authorities, we expect to record a corresponding adjustment to our unrecognized tax benefits. Given the uncertainty as to settlement terms, the timing of payments and the impact of such settlements on other uncertain tax positions, the range of estimated potential decreases in underlying uncertain tax positions is between $0 and $24 million in the next twelve months.

The Company classifies interest and penalties related to unrecognized tax benefits as a component of income tax expense. During the fiscal year ended October 27, 2012, the Company expensed $0.5 million for net interest and penalties related to income tax liabilities through income tax expense. The total net interest and penalties accrued as of October 27, 2012 was $2.4 million. During the year ended October 29, 2011, the Company expensed $0.4 million for net interest and penalties related to income tax liabilities through income tax expense. The total net interest and penalties accrued as of October 29, 2011 was $3.4 million.

Of the total tax benefits (detriments) resulting from the exercise of employee stock options and employee participation in the Company’s equity compensation plans, the amounts recorded to stockholders’ equity were approximately $(4.8) million in fiscal year 2012, $(5.2) million in fiscal year 2011 and $2.2 million in fiscal year 2010.

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14. 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: Storage Area Networking (“SAN”) Products, formerly referred to as Data Storage Products, and Global Services. The other two operating segments, Ethernet Switching & Internet Protocol (“IP”) Routing and Application Delivery Products (“ADP”), combine to form a third reportable segment: IP Networking Products, formerly referred to as 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:

• SAN 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 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;

• IP Networking Products include Open Systems 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, 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 27, 2012, October 29, 2011 and October 30, 2010 were attributable to its United States operations.

Summarized financial information by reportable segment for the years ended October 27, 2012, October 29, 2011 and October 30, 2010, based on the internal management reporting system, is as follows (in thousands):

	SAN Products		IP Networking Products		Global Services		Total
Fiscal Year Ended October 27, 2012
Net revenues	$	1,356,099	$	534,757	$	346,914	$	2,237,770
Cost of revenues	362,608		327,248		164,895		854,751
Gross margin	$	993,491	$	207,509	$	182,019	$	1,383,019
Fiscal Year Ended October 29, 2011
Net revenues	$	1,237,994	$	551,820	$	357,628	$	2,147,442
Cost of revenues	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	394,506		288,980		176,547		860,033
Gross margin	$	846,120	$	199,208	$	185,792	$	1,231,120

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Revenues are attributed to geographic areas based on where the Company’s products are shipped. Geographic revenue and property and equipment information for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 is presented below (in thousands):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Net revenues:
United States	$	1,414,390	$	1,313,302	$	1,338,262
International
Europe, the Middle East and Africa (1)	493,979		502,999		482,707
Asia Pacific	186,244		212,636		173,243
Japan	99,887		75,542		58,914
Canada, Central and South America	43,270		42,963		38,027
Total international net revenues	823,380		834,140		752,891
Total net revenues	$	2,237,770	$	2,147,442	$	2,091,153

(1) Includes net revenues of $259.2 million, $257.5 million and $254.4 million for the years ended October 27, 2012, October 29, 2011 and October 30, 2010, respectively, relating to the Netherlands.

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Property and equipment, net:
United States	$	500,744	$	515,940	$	524,287
International	18,196		16,444		14,830
Total Property and equipment, net	$	518,940	$	532,384	$	539,117

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15. Net Income per Share

The following table presents the calculation of basic and diluted net income per share (in thousands, except per share amounts):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Basic net income per share
Net income	$	195,181	$	50,610	$	116,523
Weighted-average shares used in computing basic net income per share	456,629		474,259		446,996
Basic net income per share	$	0.43	$	0.11	$	0.26
Diluted net income per share
Net income	$	195,181	$	50,610	$	116,523
Weighted-average shares used in computing basic net income per share	456,629		474,259		446,996
Dilutive potential common shares in the form of stock options	7,846		13,654		22,083
Dilutive potential common shares in the form of other share based awards	7,868		9,117		13,662
Weighted-average shares used in computing diluted net income per share	472,343		497,030		482,741
Diluted net income per share	$	0.41	$	0.10	$	0.24
Antidilutive potential common shares from: (1)
Stock options	16,402		21,905		21,217
Other share based awards	570		3,075		700
Convertible subordinated debt	—		—		3,552

(1) These potential common shares were excluded from diluted net income per share calculation because their effect would have been anti-dilutive.

16. Sale-Leaseback Transaction

During fiscal year 2010, the Company sold an owned real estate property to an unrelated third party. Net proceeds from this sale were $30.2 million. Concurrent with this sale, the Company entered into an agreement to lease the property back from the purchaser over a minimum lease term of two years. The Company considers this lease as a normal leaseback and classified the lease as an operating lease. An $8.7 million loss on the sale of the property was recognized immediately upon execution of the sale and is recorded within “Gain (loss) on sale of investments and property, net” on the Consolidated Statements of Operations.

17. Loss on Sale of Subsidiary

In August 2011, the Company committed to a plan to exit a portion of its Global Services business through the sale of SBS, its wholly-owned subsidiary and signed a Stock Purchase Agreement to sell SBS to investors led by the former Managing Director of SBS. The sale was completed in September 2011 to enable the Company’s Global Services organization to focus on the execution of strategic and core offerings such as support and service for the Company’s products as well as professional consulting.

SBS’s assets and liabilities were classified as held for sale in the fourth quarter of fiscal year 2011 as a result of the Company’s commitment and actions. The net carrying amount of SBS’s assets and liabilities classified as held for sale was $16.2 million, comprising primarily of intangible assets of $11.1 million. Upon classifying the SBS assets as held for sale, the Company recognized an expected loss on disposal of $11.1 million, reducing the carrying amount of its SBS intangible assets to their fair value less costs to sell. Additionally, when the sale was completed, the Company wrote off $1.7 million of the associated Global Services goodwill resulting in a total loss of $12.8 million which is presented in the Company’s consolidated statement of operations as “Loss on sale of subsidiary.”

18. Guarantor and Non-Guarantor Subsidiaries

On January 20, 2010, the Company issued in total $600.0 million aggregate principal amount of its senior secured notes. The Company's obligations under the senior secured notes are guaranteed by certain of the Company's domestic subsidiaries (the “Subsidiary Guarantors”). Each of the Subsidiary Guarantors is 100% owned by the Company and all guarantees are joint and several. The senior secured notes are not guaranteed by certain of the Company's domestic subsidiaries and all of the Company’s foreign subsidiaries (the “Non-Guarantor Subsidiaries”).

89

Pursuant to the terms of the senior secured notes, the guarantees are full and unconditional,but are subject to release under the following circumstances:

• upon the sale of the subsidiary or all or substantially all of its assets;

• upon the discharge of the guarantees under the credit facility or other debt provided that the credit facility has been paid in full and the applicable series of senior secured notes have an investment grade rating from both Standard & Poor's and Moody's;

• upon designation of the subsidiary as an “unrestricted subsidiary” under the applicable Indenture;

• upon the merger, consolidation or liquidation of the subsidiary into another subsidiary guarantor; and

• upon legal or covenant defeasance or the discharge of the Company's obligations under the applicable indenture.

Because the guarantees are subject to release under the above described circumstances, they would not be deemed “full and unconditional” for purposes of Rule 3-10 of Regulation S-X. However, as these circumstances are customary, the Company concluded that it may rely on Rule 3-10 of Regulation S-X, as the other requirements of Rule 3-10 have been met.

The following tables present condensed consolidated financial statements for the parent company, the Subsidiary Guarantors and the Non-Guarantor Subsidiaries, respectively.

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The following is the consolidated balance sheet as of October 27, 2012 (in thousands):

	Brocade Communications Systems, Inc.		Subsidiary Guarantors			Non- Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	284,466	$	680		$	428,080	$	—		$	713,226
Accounts receivable, net	150,367		(1,847		)	84,619		—			233,139
Inventories	55,084		—			13,095		—			68,179
Intercompany receivables	—		478,133			—		(478,133		)	—
Other current assets	124,690		514			15,606		225			141,035
Total current assets	614,607		477,480			541,400		(477,908		)	1,155,579
Property and equipment, net	500,530		213			18,197		—			518,940
Investment in subsidiaries	871,157		—			—		(871,157		)	—
Other non-current assets	1,814,729		90,766			1,247		—			1,906,742
Total assets	$	3,801,023	$	568,459		$	560,844	$	(1,349,065	)	$	3,581,261
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	92,661	$	—		$	24,689	$	—		$	117,350
Current portion of long-term debt	2,226		(249		)	—		—			1,977
Intercompany payables	434,981		—			43,152		(478,133		)	—
Other current liabilities	346,959		7,628			136,329		225			491,141
Total current liabilities	876,827		7,379			204,170		(477,908		)	610,468
Long-term debt, net of current portion	599,203		—			—		—			599,203
Other non-current liabilities	89,173		2,429			44,168		—			135,770
Total liabilities	1,565,203		9,808			248,338		(477,908		)	1,345,441
Total stockholders’ equity	2,235,820		558,651			312,506		(871,157		)	2,235,820
Total liabilities and stockholders’ equity	$	3,801,023	$	568,459		$	560,844	$	(1,349,065	)	$	3,581,261

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The following is the consolidated balance sheet as of October 29, 2011 (in thousands):

	Brocade Communications Systems, Inc.		Subsidiary Guarantors			Non- Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	101,367	$	2,301		$	311,308	$	—		$	414,976
Accounts receivable, net	157,839		(2,149		)	93,451		—			249,141
Inventories	50,000		—			24,172		—			74,172
Intercompany receivables	—		446,455			—		(446,455		)	—
Other current assets	87,495		805			15,609		2,003			105,912
Total current assets	396,701		447,412			444,540		(444,452		)	844,201
Property and equipment, net	460,347		55,594			16,443		—			532,384
Investment in subsidiaries	1,285,356		—			—		(1,285,356		)	—
Other non-current assets	1,506,086		590,318			1,319		—			2,097,723
Total assets	$	3,648,490	$	1,093,324		$	462,302	$	(1,729,808	)	$	3,474,308
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	85,700	$	376		$	23,395	$	—		$	109,471
Current portion of long-term debt	40,539		—			—		—			40,539
Intercompany payables	377,228		—			69,227		(446,455		)	—
Other current liabilities	276,982		17,261			119,731		2,003			415,977
Total current liabilities	780,449		17,637			212,353		(444,452		)	565,987
Long-term debt, net of current portion	748,904		—			—		—			748,904
Other non-current liabilities	104,999		580			39,700		—			145,279
Total liabilities	1,634,352		18,217			252,053		(444,452		)	1,460,170
Total stockholders’ equity	2,014,138		1,075,107			210,249		(1,285,356		)	2,014,138
Total liabilities and stockholders’ equity	$	3,648,490	$	1,093,324		$	462,302	$	(1,729,808	)	$	3,474,308

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The following is the consolidated statement of operations for the fiscal year ended October 27, 2012 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	1,409,705		$	4,685		$	823,380		$	—		$	2,237,770
Intercompany revenues	44,152			—			21,709			(65,861		)	—
Total net revenues	1,453,857			4,685			845,089			(65,861		)	2,237,770
Cost of revenues	559,835			49,935			234,889			10,092			854,751
Intercompany cost of revenues	(35,070		)	—			100,931			(65,861		)	—
Total cost of revenues	524,765			49,935			335,820			(55,769		)	854,751
Gross margin (loss)	929,092			(45,250		)	509,269			(10,092		)	1,383,019
Operating expenses	827,318			56,838			231,226			(10,092		)	1,105,290
Intercompany operating expenses (income)	(138,197		)	(27,319		)	165,516			—			—
Total operating expenses	689,121			29,519			396,742			(10,092		)	1,105,290
Income (loss) from operations	239,971			(74,769		)	112,527			—			277,729
Other income (expense)	(49,470		)	4			(3,862		)	—			(53,328		)
Income (loss) before income tax provision and equity in net earnings (losses) of subsidiaries	190,501			(74,765		)	108,665			—			224,401
Income tax expense	20,432			—			8,788			—			29,220
Equity in net earnings (losses) of subsidiaries	25,112			—			—			(25,112		)	—
Net income (loss)	$	195,181		$	(74,765	)	$	99,877		$	(25,112	)	$	195,181

The following is the consolidated statement of operations for the fiscal year ended October 29, 2011 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	1,285,732		$	27,569		$	834,141		$	—		$	2,147,442
Intercompany revenues	88,063			1,753			35,980			(125,796		)	—
Total net revenues	1,373,795			29,322			870,121			(125,796		)	2,147,442
Cost of revenues	531,162			85,540			233,448			13,758			863,908
Intercompany cost of revenues	(2,263		)	—			128,059			(125,796		)	—
Total cost of revenues	528,899			85,540			361,507			(112,038		)	863,908
Gross margin (loss)	844,896			(56,218		)	508,614			(13,758		)	1,283,534
Operating expenses	821,018			76,645			222,109			(13,758		)	1,106,014
Intercompany operating expenses (income)	(138,789		)	(25,694		)	164,483			—			—
Total operating expenses	682,229			50,951			386,592			(13,758		)	1,106,014
Income (loss) from operations	162,667			(107,169		)	122,022			—			177,520
Other income (expense)	109,902			(7,518		)	(200,476		)	—			(98,092		)
Income (loss) before income tax provision and equity in net earnings (losses) of subsidiaries	272,569			(114,687		)	(78,454		)	—			79,428
Income tax expense	22,115			46			6,657			—			28,818
Equity in net earnings (losses) of subsidiaries	(199,844		)	—			—			199,844			—
Net income (loss)	$	50,610		$	(114,733	)	$	(85,111	)	$	199,844		$	50,610

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The following is the consolidated statement of operations for fiscal year ended October 30, 2010 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	1,287,646		$	50,731		$	752,776		$	—		$	2,091,153
Intercompany revenues	102,178			13,954			25,464			(141,596		)	—
Total net revenues	1,389,824			64,685			778,240			(141,596		)	2,091,153
Cost of revenues	529,641			112,477			214,024			3,891			860,033
Intercompany cost of revenues	40,588			—			101,008			(141,596		)	—
Total cost of revenues	570,229			112,477			315,032			(137,705		)	860,033
Gross margin (loss)	819,595			(47,792		)	463,208			(3,891		)	1,231,120
Operating expenses	783,968			63,855			179,357			(3,891		)	1,023,289
Intercompany operating expenses (income)	(167,746		)	(30,349		)	198,095			—			—
Total operating expenses	616,222			33,506			377,452			(3,891		)	1,023,289
Income (loss) from operations	203,373			(81,298		)	85,756			—			207,831
Other expense	(80,276		)	(1,628		)	(18,957		)	—			(100,861		)
Income (loss) before income tax provision and equity in net earnings (losses) of subsidiaries	123,097			(82,926		)	66,799			—			106,970
Income tax expense (benefit)	(20,672		)	1,266			9,853			—			(9,553		)
Equity in net earnings (losses) of subsidiaries	(27,246		)	—			—			27,246			—
Net income (loss)	$	116,523		$	(84,192	)	$	56,946		27,246			$	116,523

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The following is the consolidated statement of cash flows for the fiscal year ended October 27, 2012 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments		Total
Net cash provided by (used in) operating activities	$	464,097		$	(1,799	)	$	128,572		$	—	$	590,870
Cash flows from investing activities:
Proceeds from sale of subsidiary	35			—			—			—		35
Proceeds from maturities and sale of short-term investments	—			952			—			—		952
Purchases of property and equipment	(62,791		)	—			(10,006		)	—		(72,797		)
Net cash provided by (used in) investing activities	(62,756		)	952			(10,006		)	—		(71,810		)
Cash flows from financing activities:
Payment of principal related to the term loan	(190,000		)	—			—			—		(190,000		)
Payment of principal related to capital leases	(1,866		)	—			—			—		(1,866		)
Common stock repurchases	(130,209		)	—			—			—		(130,209		)
Proceeds from issuance of common stock	98,791			—			—			—		98,791
Excess tax benefits from stock-based compensation	5,042			—			99			—		5,141
Net cash provided by (used in) financing activities	(218,242		)	—			99			—		(218,143		)
Effect of exchange rate fluctuations on cash and cash equivalents	—			—			(1,893		)	—		(1,893		)
Net increase (decrease) in cash and cash equivalents	183,099			(847		)	116,772			—		299,024
Cash and cash equivalents, beginning of period	101,367			1,527			311,308			—		414,202
Cash and cash equivalents, end of period	$	284,466		$	680		$	428,080		$	—	$	713,226

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The following is the consolidated statement of cash flows for the fiscal year ended October 29, 2011 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments		Total
Net cash provided (used) by operating activities	$	436,714		$	(5,852	)	$	18,370		$	—	$	449,232
Cash flows from investing activities:
Purchases of short-term investments	—			(38		)	—			—		(38		)
Proceeds from maturities and sale of short-term investments	—			1,604			—			—		1,604
Purchases of property and equipment	(86,447		)	(33		)	(10,317		)	—		(96,797		)
Proceeds from sale of subsidiary	4,966			(1,061		)	—			—		3,905
Net cash provided by (used in) investing activities	(81,481		)	472			(10,317		)	—		(91,326		)
Cash flows from financing activities:
Payment of principal related to the term loan	(359,898		)	—			—			—		(359,898		)
Payment of fees related to the term loan	(1,167		)	—			—			—		(1,167		)
Proceeds from term loan	198,950			—			—			—		198,950
Payment of principal related to capital leases	(1,761		)	—			—			—		(1,761		)
Common stock repurchases	(210,698		)	—			—			—		(210,698		)
Proceeds from issuance of common stock	97,152			—			—			—		97,152
Excess tax benefits from stock-based compensation	101			—			211			—		312
Net cash provided by (used in) financing activities	(277,321		)	—			211			—		(277,110		)
Effect of exchange rate fluctuations on cash and cash equivalents	—			—			(578		)	—		(578		)
Net increase (decrease) in cash and cash equivalents	77,912			(5,380		)	7,686			—		80,218
Cash and cash equivalents, beginning of period	23,455			6,907			303,622			—		333,984
Cash and cash equivalents, end of period	$	101,367		$	1,527		$	311,308		$	—	$	414,202

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The following is the consolidated statement of cash flows for the fiscal year ended October 30, 2010 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments		Total
Net cash provided by operating activities	$	71,094		$	169,986		$	57,433		$	—	$	298,513
Cash flows from investing activities:
Purchases of short-term investments	—			(53		)	—			—		(53		)
Purchases of non-marketable minority equity investments	(200		)	—			—			—		(200		)
Proceeds from maturities and sale of short-term investments	—			3,255			—			—		3,255
Proceeds from sale of property	30,185			—			—			—		30,185
Purchases of property and equipment	(196,193		)	471			(5,899		)	—		(201,621		)
Net cash provided by (used in) investing activities	(166,208		)	3,673			(5,899		)	—		(168,434		)
Cash flows from financing activities:
Payment of debt issuance costs related to the senior secured notes	(3,666		)	—			—			—		(3,666		)
Payment of principal related to the revolving credit facility	(14,050		)	—			—			—		(14,050		)
Payment of principal related to the convertible subordinated debt	—			(172,500		)	—			—		(172,500		)
Payment of principal related to the term loan	(583,029		)	—			—			—		(583,029		)
Payment of principal related to capital leases	(1,173		)	—			—			—		(1,173		)
Common stock repurchases	(25,004		)	—			—			—		(25,004		)
Proceeds from senior secured notes	587,968			—			—			—		587,968
Proceeds from issuance of common stock	81,593			—			—			—		81,593
Excess tax benefits from stock-based compensation	1,420			—			741			—		2,161
Net cash provided by (used in) financing activities	44,059			(172,500		)	741			—		(127,700		)
Effect of exchange rate fluctuations on cash and cash equivalents	—			—			(2,588		)	—		(2,588		)
Net increase (decrease) in cash and cash equivalents	(51,055		)	1,159			49,687			—		(209		)
Cash and cash equivalents, beginning of period	74,510			5,748			253,935			—		334,193
Cash and cash equivalents, end of period	$	23,455		$	6,907		$	303,622		$	—	$	333,984

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19. Subsequent Events

On November 6, 2012, California voters approved California Proposition 39 which revised certain provisions of the California State Tax Code, requiring mandatory single sales factor apportionment in California for most multi-state taxpayers for tax years beginning on or after January 1, 2013. Brocade currently expects that in fiscal year 2013 and beyond, Brocade's income subject to tax in California will be lower than under prior tax law and that Brocade's California deferred tax assets are, therefore, less likely to be realized. As a result, during the first quarter of fiscal year 2013, Brocade will record a charge of up to $78.0 million to reduce its previously recognized California deferred tax assets. This charge will not impact cash tax outlays and conformance to the new California apportionment rules is not expected to have a material impact on Brocade's future tax provision.

On November 9, 2012, Brocade paid $45.0 million and completed its acquisition of Vyatta Inc. (“Vyatta”), the developer of software-based network operating system that is relevant for multiple applications in network virtualization, software-defined networking (“SDN”) and private/public cloud computing platforms, which became a wholly owned subsidiary of Brocade. This acquisition complements Brocade investments in Ethernet fabrics and SDN, and enables Brocade to pursue new market opportunities in data center virtualization, public cloud, enterprise virtual private cloud, and managed services. Due to the limited time since the acquisition date, the initial accounting and purchase price allocation for this acquisition is incomplete as of December 14, 2012. Brocade does not consider the acquisition of Vyatta to be material to its results of operations and is therefore not presenting pro-forma financial information of combined operations.

BROCADE COMMUNICATIONS SYSTEMS, INC. QUARTERLY SUMMARY (Unaudited)
	Three Months Ended
	October 27, 2012		July 28, 2012		April 28, 2012		January 28, 2012		October 29, 2011			July 30, 2011		April 30, 2011		January 29, 2011
	(In thousands, except per share and stock price amounts)
Quarterly Data:
Net revenues	$	578,357	$	555,332	$	543,439	$	560,642	$	550,472		$	502,850	$	548,364	$	545,756
Gross margin	$	360,690	$	340,478	$	337,082	$	344,769	$	327,515		$	306,527	$	328,609	$	320,883
Income from operations	$	86,320	$	70,221	$	51,769	$	69,419	$	54,697		$	34,222	$	46,197	$	42,404
Net income (loss)	$	54,001	$	43,300	$	39,296	$	58,584	$	(4,324	)	$	1,937	$	26,079	$	26,918
Per share amounts:
Basic	$	0.12	$	0.09	$	0.09	$	0.13	$	(0.01	)	$	—	$	0.06	$	0.06
Diluted	$	0.11	$	0.09	$	0.08	$	0.12	$	(0.01	)	$	—	$	0.05	$	0.05
Shares used in computing per share amounts:
Basic	459,333		457,147		457,541		452,494		474,975			483,744		473,209		465,108
Diluted	474,213		469,571		476,848		468,738		474,975			509,548		501,511		491,166
Closing prices:
High	$	6.39	$	5.55	$	6.12	$	5.93	$	5.39		$	7.11	$	6.45	$	6.41
Low	$	4.92	$	4.41	$	5.24	$	4.17	$	3.22		$	5.48	$	5.64	$	4.97

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this Annual Report on Form 10-K (the “Evaluation Date”).

The purpose of this evaluation is to determine if, as of the Evaluation Date, our disclosure controls and procedures are effective such that the information required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended October 27, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

The management of Brocade Communications Systems, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) of the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within a company are detected. The inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of October 27, 2012, utilizing the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework. Based on our management’s assessment, we believe that, as of October 27, 2012, our internal

99

control over financial reporting was effective based on those criteria. The effectiveness of our internal control over financial reporting as of October 27, 2012 has been audited by KPMG LLP, Brocade’s independent registered public accounting firm, as stated in their report which is included on page 101 of this Annual Report on Form 10-K.

100

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Brocade Communications Systems, Inc.:

We have audited Brocade Communications Systems, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of October 27, 2012, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting appearing in Item 9A. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 27, 2012, based on criteria established in Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Brocade Communications Systems, Inc. and subsidiaries as of October 27, 2012 and October 29, 2011, and the related consolidated statements of operations, stockholders’ equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended October 27, 2012, and the accompanying financial statement schedule. Our report dated December 14, 2012, expressed an unqualified opinion on those consolidated financial statements and financial statement schedule.

/s/     KPMG LLP      

Santa Clara, California

December 14, 2012

101

Item 9B. Other Information

None.

PART III

Certain information required by Part III is incorporated by reference from the Company’s definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for the Company’s 2013 Annual Meeting of Stockholders (the “Proxy Statement”).

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this Item with respect to the Company’s directors is incorporated by reference from the Proxy Statement under the sections entitled “Election of Directors” and “Board of Directors Meetings and Committees.” The information required by this Item with respect to the Company’s executive officers is incorporated by reference from the Proxy Statement under the section entitled “Executive Officers.” The information required by this Item with respect to disclosure of any known late filing or failure by an insider to file a report required by Section 16 of the Exchange Act is incorporated by reference from the Proxy Statement under the section entitled “Section 16(a) Beneficial Ownership Reporting Compliance.” The information regarding the Company’s corporate governance is incorporated by reference from the Proxy Statement.

The Board of Directors has adopted a Code of Ethics for Principal Executive and Senior Financial Officers (the “Code of Ethics”), which applies to the Company’s Chief Executive Officer, Chief Financial Officer and any other principal financial officer, controller and any other principal accounting officer, and any other person performing similar functions. The Code of Ethics is available on the Company’s Web site at www.brocade.com in the “Corporate Governance” section of its investor relations webpage. The Company will also provide a copy of the Code of Ethics upon request made by email to ir@brocade.com or in writing to Brocade Communications Systems, Inc., Attention: Investor Relations, 130 Holger Way, San Jose, California 95134. The Company will disclose any amendment to the Code of Ethics or waiver of a provision of the Code of Ethics that applies to the Company’s Chief Executive Officer, Chief Financial Officer and any other principal financial officer, controller and any other principal accounting officer, and any other person performing similar functions, and relate to certain elements of the Code of Ethics, including the name of the officer to whom the waiver was granted, on its Web site at www.brocade.com on its investor relations webpage.

Item 11. Executive Compensation

The information required by this Item is incorporated by reference from the Proxy Statement under the section entitled “Executive Compensation and Other Matters.”

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item is incorporated by reference from the Proxy Statement under the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Board of Directors Meetings and Committees.” Information with respect to securities authorized for issuance under equity compensation plans is set forth in Note 11 (see “Employee Compensation Plans” of Note 11) of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item is incorporated by reference from the Proxy Statement under the section entitled “Certain Relationships and Related Transactions.”

Item 14. Principal Accountant Fees and Services

The information required by this Item is incorporated by reference from the Proxy Statement under the section entitled “Ratification of Selection of Independent Registered Public Accountants.”

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as a part of this Form 10-K:

1.Financial Statements:

The following financial statements of Brocade Communications Systems, Inc. are filed as a part of this Annual Report.

	Page
Report of Independent Registered Public Accounting Firm	54
Consolidated Statements of Operations	55
Consolidated Balance Sheets	56
Consolidated Statements of Cash Flows	57
Consolidated Statements of Stockholders’ Equity and Comprehensive Income (loss)	59
Notes to Consolidated Financial Statements	60
Quarterly Summary (Unaudited)	98

2. Financial Statement Schedules:

The following financial statement schedule of Brocade Communications Systems, Inc. for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 is filed as part of this Annual Report and should be read in conjunction with the Consolidated Financial Statements of Brocade Communications Systems, Inc.

Schedule II — Valuation and Qualifying Accounts 112

All other schedules have been omitted as the required information is inapplicable or the information is presented in the Consolidated Financial Statements and notes thereto under Item 8 in Part II of this Form 10-K.

3. Exhibits:

EXHIBIT INDEX
Exhibit Number	Description of Document
3.1	Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended July 28, 2007)
3.2	Certificates of Correction and Corrected Amended and Restated Certificate of Incorporation effective as of June 1, 2009 (incorporated by reference to Exhibit 3.5 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended May 2, 2009)
3.3	Certificate of Amendment to Amended and Restated Certificate of Incorporation effective as of April 13, 2010 (incorporated by reference to Exhibit 3.1 from Brocade’s current report on Form 8-K filed on April 13, 2010)
3.4	Amended and Restated Bylaws of the Registrant effective as of April 13, 2010 (incorporated by reference to Exhibit 3.2 from Brocade’s current report Form 8-K filed on April 13, 2010)
3.5	Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock of Brocade Communications Systems, Inc. (incorporated by reference to Exhibit 4.1 from Brocade’s Registration Statement on Form 8-A filed on February 11, 2002)
3.6	Certificate of Elimination of Series A Participating Preferred Stock of Brocade (incorporated by reference to Exhibit 3.1 from Brocade’s current report on Form 8-K filed on February 16, 2007)
4.1	Form of Registrant’s Common Stock certificate (incorporated by reference to Exhibit 4.1 from Brocade’s Registration Statement on Form S-1 (Reg. No. 333-74711), as amended)

103

EXHIBIT INDEX
Exhibit Number	Description of Document
4.2	Indenture, dated as of January 20, 2010, by and among Brocade, the Subsidiary Guarantors named therein and Wells Fargo Bank, National Association, as Trustee, governing the 2018 Notes (incorporated by reference to Exhibit 4.1 from Brocade’s current report on Form 8-K filed on January 26, 2010)
4.3	Indenture, dated as of January 20, 2010, by and among Brocade, the Subsidiary Guarantors named therein and Wells Fargo Bank, National Association, as Trustee, governing the 2020 Notes (incorporated by reference to Exhibit 4.2 from Brocade’s current report on Form 8-K filed on January 26, 2010)
10.1	Form of Indemnification Agreement entered into between Brocade and each of its directors and executive officers (incorporated by reference to Exhibit 10.1 from Brocade’s Registration Statement on Form S-1 (Reg. No. 333-74711), as amended)
10.2†	Goods Agreement between International Business Machines Corporation and Brocade dated April 15, 1999 (incorporated by reference to Exhibit 10.24 from Brocade’s annual report on Form 10-K for the fiscal year ended October 27, 2001)
10.3	Amendment #1 to the Goods Agreement between International Business Machines Corporation and Brocade (incorporated by reference to Exhibit 10.25 from Brocade’s annual report on Form 10-K for the fiscal year ended October 27, 2001)
10.4†	Statement of Work #1 between International Business Machines Corporation and Brocade (incorporated by reference to Exhibit 10.26 from Brocade’s annual report on Form 10-K for the fiscal year ended October 27, 2001)
10.5†	Amendment #4 to Statement of Work #1 between International Business Machines Corporation and Brocade (incorporated by reference to Exhibit 10.28 from Brocade’s annual report on Form 10-K for the fiscal year ended October 27, 2001)
10.6	Lease Agreement between MV Golden State San Jose, LLC and Brocade dated December 1, 2000 (incorporated by reference to Exhibit 10.1 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 27, 2001)
10.7†	Amendment No. 7 to Statement of Work No. 1 between International Business Machines Corporation and Brocade (incorporated by reference to Exhibit 10.37 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended July 27, 2002)
10.8†	OEM Purchase Agreement between Brocade and Hewlett-Packard Company dated December 16, 2002 (incorporated by reference to Exhibit 10.48 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 25, 2003)
10.9†	Manufacturing and Purchase Agreement between Brocade and Hon Hai Precision Industry Co., Ltd. dated April 5, 2003 (HHPI Manufacturing and Purchase Agreement) (incorporated by reference to Exhibit 10.49 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 26, 2003)
10.10	Amendment Number One to HHPI Manufacturing and Purchase Agreement between Brocade and Hon Hai Precision Industry Co., Ltd. dated April 5, 2003 (incorporated by reference to Exhibit 10.50 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 26, 2003)
10.11†	Manufacturing and Purchase Agreement between Brocade Communications Switzerland SarL and Hon Hai Precision Industry Co., Ltd. dated May 1, 2003 (incorporated by reference to Exhibit 10.51 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 26, 2003)
10.12†	Manufacturing and Purchase Agreement between Brocade and Solectron Corporation dated February 21, 2003 (Solectron Manufacturing and Purchase Agreement) (incorporated by reference to Exhibit 10.52 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 26, 2003)
10.13	Amendment No. 1 to Solectron Manufacturing and Purchase Agreement between Brocade and Solectron Corporation dated March 21, 2003 (incorporated by reference to Exhibit 10.53 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 26, 2003)
10.14†	Manufacturing and Purchase Agreement between Brocade Communications Switzerland SarL and Solectron Corporation dated March 21, 2003 (incorporated by reference to Exhibit 10.54 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 26, 2003)

104

EXHIBIT INDEX
Exhibit Number	Description of Document
10.15†	Amendment #15 dated March 26, 2004 to Statement of Work #1 between International Business Machines Corporation and Brocade (incorporated by reference to Exhibit 10.71 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended May 1, 2004)
10.16†	Amendment #18 dated October 5, 2004 to Statement of Work #1 between International Business Machines Corporation and Brocade (incorporated by reference to Exhibit 10.77 from Brocade’s annual report on Form 10-K for the fiscal year ended October 30, 2004)
10.17†	Amendment #1 dated November 2, 2004 to OEM Purchase Agreement between Brocade and Hewlett Packard Company dated December 16, 2002 (incorporated by reference to Exhibit 10.80 from Brocade’s annual report on Form 10-K for the fiscal year ended October 30, 2004)
10.18†	Amendment #2 dated October 27, 2004 to OEM Purchase Agreement between Brocade and Hewlett-Packard Company dated December 16, 2002 (incorporated by reference to Exhibit 10.81 from Brocade’s annual report on Form 10-K for the fiscal year ended October 30, 2004)
10.19*	Employment Letter for Michael Klayko (incorporated by reference to Exhibit 10.85 from Brocade’s annual report on Form 10-K for the fiscal year ended October 30, 2004)
10.20†	Amendment #3 dated November 22, 2004 to OEM Purchase Agreement between Brocade and Hewlett Packard Company dated December 16, 2002 (incorporated by reference to Exhibit 10.89 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 29, 2005)
10.21*	Amended and Restated 1999 Employee Stock Purchase Plan and related forms of agreements (incorporated by reference to Exhibit 10.7 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended July 30, 2005)
10.22*	Amended and Restated 1999 Nonstatutory Stock Option Plan and related forms of agreements (incorporated by reference to Exhibit 10.8 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended July 30, 2005)
10.23*	Employment Letter for Ian Whiting dated May 1, 2005 (incorporated by reference to Exhibit 10.92 from Brocade’s annual report on Form 10-K for the fiscal year ended October 29, 2005)
10.24	Tolling Agreement dated as of January 1, 2006 between Gregory L. Reyes and Brocade, David House, William Krause, Nicholas Moore, William O’Brien, Christopher Paisley, Larry Sonsini, Seth Neiman, Neal Dempsey and Sanjay Vaswani (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 28, 2006)
10.25	Notice of partial termination of Tolling Agreement dated September 11, 2006 (incorporated by reference to Exhibit 10.80 from Brocade’s annual report on Form 10-K for the fiscal year ended October 27, 2007)
10.26†	Amendment #4 dated January 20, 2006 to the OEM Purchase Agreement between Brocade and Hewlett Packard Company dated December 16, 2002 (incorporated by reference to Exhibit 10.1 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 29, 2006)
10.27†	Amendment #26 dated September 19, 2006 to Statement of Work No. 1 between International Business Machines Corporation and Brocade dated August 12, 2005 (incorporated by reference to Exhibit 10.103 from Brocade’s annual report on Form 10-K for the fiscal year ended October 28, 2006)
10.28†	Amendment #6 effective as of August 4, 2006 to OEM Purchase Agreement between Brocade and Hewlett Packard Company dated December 16, 2002 (incorporated by reference to Exhibit 10.105 from Brocade’s annual report on Form 10-K for the fiscal year ended October 28, 2006)
10.29†	Amendment #7 dated August 4, 2006 to OEM Purchase Agreement between Brocade and Hewlett-Packard Company dated December 16, 2002 (incorporated by reference to Exhibit 10.106 from Brocade’s annual report on Form 10-K for the fiscal year ended October 28, 2006)
10.30†	Amendment #5, dated April 20, 2007 to OEM Purchase Agreement between Hewlett-Packard Company and Brocade (incorporated by reference to Exhibit 10.102 from Brocade’s annual report on Form 10-K for the fiscal year ended October 27, 2007)
10.31†	Amendment #8, dated September 6, 2007 to OEM Purchase Agreement between Hewlett-Packard Company and Brocade (incorporated by reference to Exhibit 10.103 from Brocade’s annual report on Form 10-K for the fiscal year ended October 27, 2007)

105

EXHIBIT INDEX
Exhibit Number	Description of Document
10.32†	Statement of Work #7, dated October 1, 2007 to Goods Agreement between International Business Machines and Brocade (incorporated by reference to Exhibit 10.104 from Brocade’s annual report on Form 10-K for the fiscal year ended October 27, 2007)
10.33†	Ninth Amendment, dated November 5, 2007 to OEM Purchase Agreement dated December 16, 2002 between Hewlett-Packard Company and Brocade (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 26, 2008)
10.34†	Tenth Amendment, dated December 21, 2007 to OEM Purchase Agreement dated December 16, 2002 between Hewlett-Packard Company and Brocade (incorporated by reference to Exhibit 10.4 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 26, 2008)
10.35†	Amendment Number 32 dated January 22, 2008 to Statement of Work #1 to Goods Agreement between International Business Machines Corporation and Brocade (incorporated by reference to Exhibit 10.6 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 26, 2008)
10.36*	1999 Director Plan as amended and restated April 10, 2008 and related forms of agreements, as amended (incorporated by reference to Exhibit 10.1 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 26, 2008)
10.37*	1999 Stock Plan as amended and restated November 27, 2006 and related forms of agreements, as amended (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 26, 2008)
10.38†	OEM Purchase and License Agreement dated May 20, 2008 between EMC Corporation and Brocade (incorporated by reference to Exhibit 10.1 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended July 26, 2008)
10.39†	Amendment Number 11 dated April 28, 2008 to OEM Purchase Agreement between Hewlett-Packard Company and Brocade (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended July 26, 2008)
10.40	Commitment letter dated as of July 21, 2008 with Bank of America, N.A., Banc of America Bridge LLC and Morgan Stanley Senior Funding, Inc. (incorporated by reference to Exhibit 99.1 from Brocade’s current report on Form 8-K filed on August 14, 2008)
10.41	Stock Purchase Plan and Agreement dated as of August 13, 2008 between Morgan Stanley & Co. Incorporated and Brocade Communications Systems, Inc. (incorporated by reference to Exhibit 10.120 from Brocade’s annual report on Form 10-K for the fiscal year ended October 25, 2008)
10.42†	Credit Agreement, dated as of October 7, 2008, among the lenders party thereto, Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, Morgan Stanley Senior Funding, Inc., as syndication agent, Banc of America Securities LLC and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, HSBC Bank USA National Association and Keybank National Association, as co-documentation agents and Brocade Communications Systems, Inc. (incorporated by reference to Exhibit 10.1 from Brocade’s current report on Form 8-K filed on October 14, 2008)
10.43†	Amendment Number 34 dated June 23, 2008 to Statement of Work #1 to Goods Agreement between International Business Machines Corporation and Brocade Communications Systems, Inc. (incorporated by reference to Exhibit 10.122 from Brocade’s annual report on Form 10-K for the fiscal year ended October 25, 2008)
10.44†	Amendment Number 12 dated August 21, 2008 to Statement of Work #3 to Goods Agreement between International Business Machines Corporation and Brocade Communications Systems, Inc. (incorporated by reference to Exhibit 10.124 from Brocade’s annual report on Form 10-K for the fiscal year ended October 25, 2008)
10.45†	Amendment Number 1 dated July 10, 2008 to Statement of Work #7 to Goods Agreement between International Business Machines Corporation and Brocade Communications Systems, Inc. (incorporated by reference to Exhibit 10.125 from Brocade’s annual report on Form 10-K for the fiscal year ended October 25, 2008)
10.46†	Amendment Number 1 dated January 9, 2009 to OEM Purchase and License Agreement between EMC Corporation and Brocade (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 24, 2009)

106

EXHIBIT INDEX
Exhibit Number	Description of Document
10.47†	Amendment Number 2 dated October 29, 2008 to Statement of Work Number 7 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.4 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 24, 2009)
10.48†	Amendment Number 12 dated March 11, 2009, with an effective date of February 28, 2008, to OEM Purchase Agreement between Hewlett-Packard Company and Brocade (incorporated by reference to Exhibit 10.1 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended May 2, 2009)
10.49†	Amendment Number 13 dated March 14, 2009, with an effective date of March 6, 2009, to OEM Purchase Agreement between Hewlett-Packard Company and Brocade (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended May 2, 2009)
10.50†	Amendment Number 14 dated March 14, 2009, with an effective date as of October 24, 2008, to OEM Purchase Agreement between Hewlett-Packard Company and Brocade (incorporated by reference to Exhibit 10.3 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended May 2, 2009)
10.51†	Statement of Work #8, dated April 1, 2009, to Goods Agreement between International Business Machines and Brocade (incorporated by reference to Exhibit 10.4 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended May 2, 2009)
10.52*	2009 Stock Plan as amended and restated April 12, 2012 and related forms of agreements, as amended (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 28, 2012)
10.53*	2009 Director Plan and related forms of agreements (incorporated by reference to Exhibit 10.6 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended May 2, 2009)
10.54*	2009 Employee Stock Purchase Plan as amended and restated April 12, 2012 (incorporated by reference to Exhibit 10.1 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 28, 2012)
10.55†	Amendment Number 15 dated May 11, 2009, with an effective date of February 1, 2009, to the Product Purchase Agreement between Hewlett-Packard Company and Brocade (incorporated by reference to Exhibit 10.1 from Brocade’s quarterly report on Form 10-Q for the quarterly period ended August 1, 2009)
10.56†	Amendment Number 37 dated June 22, 2009, with an effective date of June 19, 2008 [sic], to Statement of Work Number 1 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the quarterly period ended August 1, 2009)
10.57†	Amendment Number 14 dated June 10, 2009 to Statement of Work Number 3 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.3 from Brocade’s quarterly report on Form 10-Q for the quarterly period ended August 1, 2009)
10.58†	Amendment Number 15 dated June 23, 2009 to Statement of Work Number 3 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.4 from Brocade’s quarterly report on Form 10-Q for the quarterly period ended August 1, 2009)
10.59†	Amendment Number 3 dated June 8, 2009, with an effective date of June 5, 2009, to Statement of Work Number 7 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.5 from Brocade’s quarterly report on Form 10-Q for the quarterly period ended August 1, 2009)
10.60	Amendment Number 5 dated August 3, 2009 to the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.148 from Brocade’s annual report on Form 10-K for the fiscal year ended October 31, 2009)
10.61†	Amendment Number 38 dated September 19, 2009 to Statement of Work Number 1 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.149 from Brocade’s annual report on Form 10-K for the fiscal year ended October 31, 2009)
10.62†	Amendment Number 16 dated September 10, 2009, with an effective date of September 18, 2009, to Statement of Work Number 3 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.150 from Brocade’s annual report on Form 10-K for the fiscal year ended October 31, 2009)
10.63†	Amendment Number 17 dated October 30, 2009, with an effective date of October 28, 2009, to Statement of Work Number 3 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.151 from Brocade’s annual report on Form 10-K for the fiscal year ended October 31, 2009)

107

EXHIBIT INDEX
Exhibit Number	Description of Document
10.64	Amendment Number 4 dated September 22, 2009 to Statement of Work Number 7 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.152 from Brocade’s annual report on Form 10-K for the fiscal year ended October 31, 2009)
10.65†	Amendment Number 5 dated September 15, 2009 to Statement of Work Number 7 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.153 from Brocade’s annual report on Form 10-K for the fiscal year ended October 31, 2009)
10.66†	Amendment Number 1 dated October 3, 2009 to Statement of Work Number 8 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.154 from Brocade’s annual report on Form 10-K for the fiscal year ended October 31, 2009)
10.67†	Amendment Number 2 dated October 13, 2009 to Statement of Work Number 8 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.155 from Brocade’s annual report on Form 10-K for the fiscal year ended October 31, 2009)
10.68†	Amendment Number 3 dated October 1, 2009 to Statement of Work Number 8 of the Goods Agreement between International Business Machines and Brocade (incorporated by reference to Exhibit 10.156 from Brocade’s annual report on Form 10-K for the fiscal year ended October 31, 2009)
10.69*	Senior Leadership Plan (formerly Executive Leadership Plan), as amended as of December 2, 2010 (incorporated by reference to Exhibit 10.1 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 29, 2011)
10.70*	Form of Restricted Stock Unit Agreement (Market Stock Units) under the 2009 Stock Plan (incorporated by reference to Exhibit 10.2 from Brocade’s current report on Form 8-K filed on December 9, 2009)
10.71†	Amendment Number 39 dated December 15, 2009, to Statement of Work Number 1 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.3 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 30, 2010)
10.72	Amendment and Waiver No. 1 dated January 8, 2010, to the Credit Agreement, dated as of October 7, 2008, by and among Brocade, the lenders party thereto, Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, Morgan Stanley Senior Funding, Inc., as syndication agent, Banc of America Securities LLC and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, and HSBC Bank USA National Association and Keybank National Association, as co-documentation agents (incorporated by reference to Exhibit 10.4 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 30, 2010)
10.73	Purchase Agreement, dated January 13, 2010, between Brocade and J.P. Morgan Inc., as representative of the several Initial Purchasers listed in Schedule 1 thereto (incorporated by reference to Exhibit 10.5 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 30, 2010)
10.74	Security Agreement, dated as of January 20, 2010, by and among Brocade, the Subsidiary Guarantors listed on the signature pages thereto and Wells Fargo Bank, National Association, as collateral agent (incorporated by reference to Exhibit 10.1 from Brocade’s current report on Form 8-K filed on January 26, 2010)
10.75	Security Agreement, dated as of January 20, 2010, by and among Brocade, the Subsidiary Guarantors listed on the signature pages thereto and Wells Fargo Bank, National Association, as collateral agent (incorporated by reference to Exhibit 10.2 from Brocade’s current report on Form 8-K filed on January 26, 2010)
10.76	Registration Rights Agreement, dated as of January 20, 2010, by and among Brocade, the Subsidiary Guarantors listed on the signature pages thereto and the purchasers named therein (incorporated by reference to Exhibit 10.3 from Brocade’s current report on Form 8-K filed on January 26, 2010)
10.77	Registration Rights Agreement, dated as of January 20, 2010, by and among Brocade, the Subsidiary Guarantors listed on the signature pages thereto and the purchasers named therein (incorporated by reference to Exhibit 10.4 from Brocade’s current report on Form 8-K filed on January 26, 2010)
10.78	Real Estate Sale Agreement effective as of January 25, 2010 by and between Brocade Communications Systems Skyport LLC, a wholly-owned subsidiary of Brocade, and CA-Skyport III Limited Partnership (incorporated by reference to Exhibit 10.10 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 30, 2010)

108

EXHIBIT INDEX
Exhibit Number	Description of Document
10.79	Lease Agreement dated as of January 28, 2010 by and between Brocade and CA-Skyport III Limited Partnership (incorporated by reference to Exhibit 10.11 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 30, 2010)
10.80†	Amendment Number 2 dated February 2, 2010 to OEM Purchase and License Agreement between EMC Corporation and Brocade (incorporated by reference to Exhibit 10.12 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 30, 2010)
10.81†	Amendment Number 3 dated April 13, 2010 to OEM Purchase and License Agreement between EMC Corporation and Brocade (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended May 1, 2010)
10.82†	Amendment Number 16 dated March 24, 2010, with an effective date as of June 8, 2009, to the Product Purchase Agreement between Hewlett-Packard Company and Brocade (incorporated by reference to Exhibit 10.3 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended May 1, 2010)
10.83†	Amendment Number 40 dated April 13, 2010 to Statement of Work Number 1 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.4 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended May 1, 2010)
10.84†	Amendment Number 3 dated April 19, 2010, with an effective date of January 1, 2010, to Statement of Work Number 6 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.5 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended May 1, 2010)
10.85†	Amendment Number 6 dated April 13, 2010 to Statement of Work Number 7 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.6 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended May 1, 2010)
10.86†	Amendment Number 17 dated May 21, 2010 to the Product Purchase Agreement between Hewlett-Packard Company and Brocade (incorporated by reference to Exhibit 10.1 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended July 31, 2010)
10.87†	Amendment Number 4 dated May 18, 2010 to Statement of Work Number 8 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended July 31, 2010)
10.88†	Amendment Number 5 dated May 18, 2010, with an effective date of May 14, 2010, to Statement of Work Number 8 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.3 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended July 31, 2010)
10.89†	Amendment Number 19 dated August 4, 2010 to the Product Purchase Agreement between Hewlett-Packard Company and Brocade (incorporated by reference to Exhibit 10.131 from Brocade’s annual report on Form 10-K for the fiscal year ended October 30, 2010)
10.90	Amendment Number 6 dated October 22, 2009, with an effective date of October 29, 2010, to the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.132 from Brocade’s annual report on Form 10- K for the fiscal year ended October 30, 2010)
10.91†	Amendment Number 41 dated September 21, 2010 to Statement of Work Number 1 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.133 from Brocade’s annual report on Form 10-K for the fiscal year ended October 30, 2010)
10.92†	Amendment Number 18 dated September 8, 2010 to Statement of Work Number 3 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.134 from Brocade’s annual report on Form 10-K for the fiscal year ended October 30, 2010)
10.93	Special Ethernet Bonus Program, as approved on December 2, 2010 (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 29, 2011)
10.94	Statement of Work #9, dated April 8, 2011, to Goods Agreement between International Business Machines Corporation and Brocade (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 30, 2011)
10.95	French Sub-Plan under the 2009 Stock Plan and related forms of agreements (incorporated by reference to Exhibit 10.3 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 30, 2011)

109

EXHIBIT INDEX
Exhibit Number	Description of Document
10.96	Amendment No. 2, dated as of June 10, 2011, by and among Brocade Communications Systems, Inc., the lenders party thereto, and Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, to the Credit Agreement, dated as of October 7, 2008 (as amended), by and among Brocade Communications Systems, Inc., the lenders party thereto, and Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer (incorporated by reference to Exhibit 10.1 from Brocade’s current report on Form 8-K filed on June 10, 2011)
10.97†	Amendment Number 42 dated June 30, 2011 to Statement of Work Number 1 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended July 30, 2011)
10.98†	Amendment Number 7 dated July 20, 2011 to Statement of Work Number 7 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.3 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended July 30, 2011)
10.99†	Amendment Number 43 dated September 23, 2011 to Statement of Work Number 1 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.114 from Brocade’s annual report on Form 10-K for the fiscal year ended October 29, 2011)
10.100	Amendment Number 19 dated October 12, 2011, with an effective date of October 24, 2011, to Statement of Work Number 3 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.115 from Brocade’s annual report on Form 10-K for the fiscal year ended October 29, 2011)
10.101*	Senior Leadership Plan, as amended as of October 25, 2011 (incorporated by reference to Exhibit 10.116 from Brocade’s annual report on Form 10-K for the fiscal year ended October 29, 2011)
10.102*	Rev It Up Plan, approved as of October 25, 2011 and then clarified as of January 23, 2012 (incorporated by reference to Exhibit 10.3 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 28, 2012)
10.103*	Sales Leader Plan, approved as of October 28, 2011 and then clarified as of December 21, 2011 (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 28, 2012)
10.104*	Amended and Restated Change of Control Retention Agreement between Brocade and Michael Klayko effective as of December 22, 2008 (incorporated by reference to Exhibit 10.119 from Brocade’s annual report on Form 10-K for the fiscal year ended October 29, 2011)
10.105*	Form of Amended and Restated Change of Control Retention Agreement between Brocade and each of Tyler Wall and Ian Whiting effective as of December 22, 2008 (incorporated by reference to Exhibit 10.120 from Brocade’s annual report on Form 10-K for the fiscal year ended October 29, 2011)
10.106*	Form of Change of Control Retention Agreement between Brocade and newly designated executive officers, including Daniel Fairfax effective as of February 23, 2009 (incorporated by reference to Exhibit 10.121 from Brocade’s annual report on Form 10-K for the fiscal year ended October 29, 2011)
10.107*	Form of Restricted Stock Unit Agreement (2012 Market Stock Units) under the 2009 Stock Plan (incorporated by reference to Exhibit 10.1 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended January 28, 2012)
10.108†	Amendment Number 20 dated February 21, 2012, with an effective date of February 29, 2012, to Statement of Work Number 3 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.3 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 28, 2012)
10.109†	Amendment Number 44 dated February 29, 2012 to Statement of Work Number 1 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.4 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended April 28, 2012)
10.110†	Amendment Number 45 dated May 18, 2012 to Statement of Work Number 1 of the Goods Agreement between IBM and Brocade (incorporated by reference to Exhibit 10.1 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended July 28, 2012)
10.111*	Agreement and General Release of Claims by and between Brocade Communications Systems, Inc. and Michael Klayko dated as of August 12, 2012 (incorporated by reference to Exhibit 10.2 from Brocade’s quarterly report on Form 10-Q for the fiscal quarter ended July 28, 2012)

110

EXHIBIT INDEX
Exhibit Number	Description of Document
10.112**	Amendment Number 4 dated October 11, 2012 to the OEM Purchase and License Agreement between EMC Corporation and Brocade
10.113**/††	Amendment Number 21 dated October 18, 2012, with an effective date of October 22, 2012, to Statement of Work Number 3 of the Goods Agreement between IBM and Brocade
12.1**	Statement of Computation of Ratio of Earnings to Fixed Charges
21.1**	Subsidiaries of the Registrant
23.1**	Consent of Independent Registered Public Accounting Firm
24.1**	Power of attorney (see signatures page)
31.1**	Rule 13a-14(a)/15d-14(a) Certification by the Chief Executive Officer
31.2**	Rule 13a-14(a)/15d-14(a) Certification by the Chief Financial Officer
32.1**	Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS***	XBRL Instance Document
101.SCH***	XBRL Taxonomy Extension Schema Document
101.CAL***	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF***	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB***	XBRL Taxonomy Extension Label Linkbase Document
101.PRE***	XBRL Taxonomy Extension Presentation Linkbase Document
*	Indicates management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K.
**	Filed herewith.
***	XBRL (eXtensible Business Reporting Language) information is furnished and not filed herewith, is not a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
†	Confidential treatment granted as to certain portions, which portions were omitted and filed separately with the Securities and Exchange Commission.
††	Confidential treatment requested as to certain portions, which portions were omitted and filed separately with the Securities and Exchange Commission.

(b) Exhibits

See Exhibit Index included in Item 15(a) of this Form 10-K.

(c) Financial Statement Schedules

111

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

Fiscal Years Ended October 27, 2012, October 29, 2011 and October 30, 2010

	Balance at Beginning of Period		Additions Charged to Revenues		Deductions (1)			Balance at End of Period
	(in thousands)
Allowance for doubtful accounts:
2012	$	1,388	$	1,482	$	(2,037	)	$	833
2011	$	1,838	$	1,357	$	(1,807	)	$	1,388
2010	$	3,954	$	—	$	(2,116	)	$	1,838
Sales allowances:
2012	$	5,011	$	10,947	$	(6,199	)	$	9,759
2011	$	4,883	$	9,048	$	(8,920	)	$	5,011
2010	$	8,619	$	11,811	$	(15,547	)	$	4,883

(1 ) Deductions related to the allowance for doubtful accounts and sales allowances represent amounts written off against the allowance and recoveries.

112

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Brocade Communications Systems, Inc.
December 14, 2012	By:	/S/    MICHAEL KLAYKO
		Michael Klayko
		Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael Klayko and Daniel W. Fairfax, and each of them, his and her true and lawful attorneys-in-fact, each with full power of substitution, for him and her in any and all capacities, to sign any amendments to this report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/S/    MICHAEL KLAYKO         Michael Klayko	Director and Chief Executive Officer (Principal Executive Officer)	December 14, 2012
/S/    DANIEL W. FAIRFAX    Daniel W. Fairfax	Chief Financial Officer and Vice President, Finance (Principal Financial and Accounting Officer)	December 14, 2012
/S/    DAVID L. HOUSE   David L. House	Chairman of the Board of Directors	December 12, 2012
/S/    JUDY BRUNER         Judy Bruner	Director	December 12, 2012
/S/    RENATO DIPENTIMA         Renato DiPentima	Director	December 12, 2012
/S/    ALAN EARHART         Alan Earhart	Director	December 12, 2012
/S/    JOHN GERDELMAN         John Gerdelman	Director	December 12, 2012
/S/    GLENN JONES      Glenn Jones	Director	December 12, 2012
/S/    L. WILLIAM KRAUSE         L. William Krause	Director	December 12, 2012
/S/    SANJAY VASWANI         Sanjay Vaswani	Director	December 12, 2012

113

EX-10.112

Exhibit 10.112

Confidential Draft

08 29 12(EMC)

Amendment Number 4

to

OEM Purchase and License Agreement

Between EMC Corporation and Brocade Communications, Inc.

OEM Agreement Number OEM 051208 Dated May 20, 2008

This Amendment Number 4 (“the Amendment”) to the OEM Purchase and License Agreement (the “Original Agreement”) dated May 20, 2008, as amended by Amendments 1 through 4, is by and among Brocade Communications Systems, Inc., a Delaware corporation with an office located at 1745 Technology Drive, San Jose California 95110, and Brocade Communications Switzerland SarL, a Geneva corporation with principal offices at 29 Route de l' Aeroport, Case Postale 105, CH-1215, Geneva 15, Switzerland, and Brocade Communications Services Switzerland, SarL., a Geneva corporation with principal offices at 29 Route de l” Aeroport, Case Postale 105 CH-1215, Geneva 15, Switzerland (collectively, “Brocade”), and EMC Corporation, 176 South Street, Hopkinton, Massachusetts 01748 together with its designated Subsidiaries (“EMC”). This Amendment 4 is effective on the last date signed below (“Effective Date”).

RECITALS

WHEREAS, the parties wish to amend the Agreement to clarify certain defined terms;

NOW THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1.Add Amendment 4 to the OEM Purchase and License Agreement for the purpose of revising defined terms in Exhibit D.

IN WITNESS WHEREOF, the parties have caused this Amendment 4 to be executed by their duly authorized representatives.

“Brocade” BROCADE Communication Systems, Inc.	“EMC” EMC Corporation
By:   /s/_Charles Leeming Print Name:   Charles Leeming Title:       VP, WW OEM Sales Date: 10/10/2012	By:     /s/ Stephen Cleary Print Name:    Stephen Cleary Title:      V.P. Supply Chain Date:      10/11/2012
BROCADE Communication Switzerland, SarL By:   /s/__Alberto Soto Print Name:     Alberto Soto Title:     Vice President EMEA Date:     10/11/2012

EMC Confidential

Amendment 4

1.0 The definitions for “In-Warranty-Repair” and “Out-of-Warranty-Repair” are deleted in their entirety and replaced with the following:

“In-Warranty-Repair” means the repair or replacement of Product to make such Product conform to its original Product and packaging specifications, including mandatory upgrades, for serial numbers determined to be within warranty.

“Out-of-Warranty-Repair” means the repair of replacement of Product to make such Product conform to its original Product and packaging specifications, including mandatory upgrades, for serial numbers determined not to be within warranty

2.Except as modified herein, the Original Agreement, as amended, remains in full force and effect.

EMC Confidential

EX-10.113

Exhibit 10.113

3039 E CORNWALLIS RD

RESEARCH TRIANGLE PARK NC 27709-2195

October 18, 2012

Brocade Communications Systems, Inc.

130 Holger Way

San Jose, CA 95134-1376

Subject: Amendment #21 to Statement of Work #4903RL1112 (“SOW”) dated October 18, 2012

This Amendment #21 (“Amendment”) to Statement of Work # 4903RL1112 (“SOW”) adopts and incorporates by reference the terms and conditions of Goods Agreement # 4999RO0015 (“Agreement”) by and between Brocade Communications Systems, Inc. (“Brocade”) and International Business Machines Corporation (“IBM”). The parties agree to amend the SOW as follows. All other terms and conditions in the Base Agreement and SOW shall remain in full force and effect.

1. Add new section 17 Features on Demand to the SOW as follows:

17.0Features on Demand

Buyer and Supplier may mutually agree that PUAs under this SOW may designate certain features or functions in a Product and/or associated Product Code (e.g., firmware, drivers) as a “Feature on Demand”. Upon agreement of the Parties, Supplier shall be responsible for implementing such technical mechanism (e.g., license key mechanism) (“Authorization Mechanism”) as it deems appropriate to enable Buyer and Supplier to control and manage access to such Features on Demand by end user customers. To the extent Buyer distributes Product Code including Feature(s) on Demand to end user customers for use under a Supplier end user license agreement, Supplier agrees to incorporate appropriate terms into such end user license agreement to restrict use of Features on Demand without authorization from Buyer or Supplier.

Supplier shall provide Buyer with access to any technical information and other materials (e.g., license keys) as may be required or appropriate to enable Buyer to issue authorizations to use Features on Demand to end user customers on a per-machine basis (“Authorization Information”). Buyer agrees that Authorization Information provided by Supplier shall be deemed confidential Information of Supplier in accordance with confidential disclosure agreement #4904RL0542 and appropriate supplements issued that pertains to the subject matter of this Section 17, provided that Authorization Information intended to be provided to end user customers (e.g., license keys) shall be deemed non-confidential. Supplier consents to the disclosure by Buyer of Authorization Information to Buyer's subsidiaries and contract manufacturers, provided that Buyer does so under confidentiality terms.

17.1Royalty Payment Calculations/Payment

Royalty payments are paid against sales recorded by Buyer in the reporting period. Payment will be made in US dollars, [**] days following the close of the calendar month during which such shipments were made for a Product and/or Service sale, unless the last day of the month falls on a weekend or holiday, it will then be made on the next business day. In the US, a royalty payment month ends on the last day of the calendar month. Outside of the US, a royalty payment month is defined

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 1 of 8

Amendment 21    IBM Brocade Confidential

according to Buyer's current administrative practices. Payment will be paid in accordance with the royalty statement provided by Buyer. Buyer will provide a statement summarizing the payment calculations with each payment.

17.2Reports

The following report in A below is provided "as-is", shall not be used to calculate royalty payments, used as part of an audit or used for royalty reporting purposes.

A. Weekly Activity Report

Where provided, these reports capture details of the five types of transactions associated with FOD transaction keys:

1. CTO, Configure to Order. This is an activation key for installation via FOD on a switch in Buyer Manufacturing.

2. AKT, Activation Key Transfer. This is an activation key generated for use during a activation key transfer.

3. ACS, Authorization Code Ship Creation. IBM generated and shipped authorization code for aftermarket customer orders.

4. AKR, Activation Key Redemption. This is activation key created upon redemption of the IBM created Authorization code.

5. CAN, Cancellation. Cancellation of an IBM generated aftermarket customer order prior to its shipment.

Report Headings:

Switch Option P/N Type Feature Code (L1 PN) Customer No. Email address if registered WWN/L1D IBM Auth Key Qty Plant Order No. Date Time Stamp

B. Monthly Royalty Statement

Shipments reported into IBM's fulfillment system during the reporting period.

17.2Lower Royalty Payment

Buyer may request a lower royalty cost for the Licensed Work when a licensing transaction requires a substantial discount. If Supplier agrees, both parties will sign a letter specifying the licensing transaction and its lower royalty payment.

17.3Royalty Records and Audit Rights

Buyer will maintain relevant records to support payments made to Supplier. Such relevant records shall only include data used to create the monthly royalty statement. The records will be retained and made available one (1) year from the date of the related payment. If Supplier requests, Buyer will make these records available to an independent certified public accountant chosen and compensated (other than on a contingency basis) by Supplier. Supplier's request will be in writing, will provide Buyer sixty (60) days prior notice, and will not occur more than once each year. The audit will be conducted during normal business hours at Buyer's office and in such a manner as not to interfere with Buyer's normal business activities. The auditor will sign a confidentiality agreement and will only disclose to Supplier any amounts overpaid or underpaid for the period examined.

17.4Non-revenue Transactions

Buyer has no royalty obligation for: Features on Demand authorized by Supplier for test and development, maintenance or support activities conducted by Buyer or Buyer Personnel, or third parties under contract with Buyer; Features on Demand authorized by Buyer for marketing demonstrations, customer testing or trial periods (including early support, prerelease, or other similar programs), training or education; distribution of Product Code incorporating Features on Demand for support purposes; or Features on Demand authorized by Buyer for in connection with warranty replacement of a machine for which Buyer previously authorized use of the Feature on Demand (and for which Supplier received payment). Except for License Key Transfers, Authorization Key License Creation, and the license keys created for the test and development of the FOD process by IBM Manufacturing, Buyer will request such license keys from Supplier directly and will not use LGEN created licenses for such non-revenue license keys. Except as explicitly set forth in this Section, the terms of the Base Agreement and this SOW shall continue to apply to Product Code, including portions thereof which implement Features on Demand.

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Amendment 21    IBM Brocade Confidential

17.5Product Focal Point Coordinators

For purposes of this Section 17, all communications between the parties will be carried out through the following designated coordinators. All notices required in writing under this Amendment will be made to the appropriate contact listed below at the

following addresses and will be effective upon actual receipt. Notices may be transmitted electronically, by registered or certified mail, or courier. All notices, with the exception of legal notices, may also be provided by facsimile.

Product Focal Point Coordinators

FOR SUPPLIER		FOR BUYER
Name	[**]	Name	[**]
Title	[**]	Title	[**]
Address	[**]	Address	[**]
Phone	[**]	Phone	[**]
E-mail	[**]	E-mail	[**]

2. Replace “Attachment #1, Product Unique Attachment 10” for “Brocade 16Gb Fibre Channel Switch Module” in its entirety with the attached “Attachment #1, Product Unique Attachment 10”.

3. Replace “Attachment 6, Product Part Numbers and Pricing” in its entirety with the attached “Attachment 6, Product Part Numbers and Pricing”.

The parties acknowledge that they have read this Amendment, understand it, and agree to be bound by its terms and conditions. Further, they agree that this Amendment and the subject Agreement are the complete and exclusive statement of the agreement between the parties, superseding all proposals or other prior agreements, oral or written, and all other communications between the parties relating to this subject.

Except as specifically provided for in the foregoing provisions of this Amendment, the SOW shall continue in full force and effect. All capitalized terms defined in the Agreement which are used in this Amendment without further definition shall have the meanings ascribed to them in the Agreement.

Please have your authorized representative indicate acceptance thereof by signing the Amendment and returning one copy to the attention of Cliff Yochelson. This amendment will be effective when signed by both parties.

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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Amendment 21    IBM Brocade Confidential

ACCEPTED AND AGREED TO:	ACCEPTED AND AGREED TO:
International Business Machines Corporation	Brocade Communications
By: /s/ Kristen Styers 10/22/12	By: /s/ Charles Leeming 10/22/12
IBM Signature Date	Brocade Communications Date
Kristen Styers	Charles Leeming
Printed Name	Printed Name
Mgr., Networking	VP, WW OEM Sales
Title & Organization	Title & Organization
Address:  3039 Cornwallis Rd  RTP, NC 27709  USA	Address: 130 Holger Way San Jose, CA 95134-1376 USA

ACCEPTED AND AGREED TO:

Brocade Communications Switzerland, SarL

By:

/s/ Alberto Soto_______________10/19/12___

Authorized Signature Date

Alberto Soto___________________________

Type or Print Name

Vice President EMEA____________________

Title & Organization

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 4 of 8

Amendment 21    IBM Brocade Confidential

ATTACHMENT #1

PRODUCT UNIQUE ATTACHMENT #10, EFFECTIVE OCTOBER 18, 2012

1.0PRODUCT DESCRIPTION

The Product is a Brocade 16Gb Fibre Channel Switch Module, Brocade 6547, based on Brocade ASIC technology designed with 48 total Fibre Channel ports, two (2) 1Gb Ethernet management ports (one internal and one external), and one (1) external RS232 serial management port. The 48 Fibre Channel ports consist of 20 external optical SFP+ ports and 28 internal serdes that connect through target servers via IBM's proprietary Flex midplane. The actual number of usable customer ports is dependent on specific product model and are activated/configurable via Brocade's Ports on Demand (POD) technology. Incorporated with all models is all Product code (e.g., Microcode and Programs), including licenses to the Fabric OS (FOS), and Enterprise Group Management software features, and any updates thereto delivered by Supplier.

The initial Product offerings are a 12-port Base model and a 24-port Enterprise model. The 12-port Base model ships with 12 active ports and Brocade's base Product code capabilities. The 24-port Enterprise model ships with 24 active ports, Brocade's base Product code capabilities, and Brocade's Advanced Fabric Service licenses (Fabric Watch, Advanced Performance Monitoring, ISL Trunking, Extended Fabrics, Adaptive Networking, and Server Application Optimization).

Subsequent Product offerings include a 24-port Base model bundle and Features on Demand software keys. The 24-port Base model bundle ships with 24 active ports, Brocade's base Product code capabilities, and two (2) 16Gb Fibre Channel SFPs. The initial Features on Demand software keys include a 12-port POD license, a 24-port POD license, a Fabric Watch upgrade key, and an ISL Trunking upgrade key.

A complete listing of Products, part numbers and prices are listed in Attachment #6, as updated from time to time.

1.1Additional Description of Products

Products must conform to the following specifications (including any subsequent revisions, as mutually agreed to between the parties), which are hereby incorporated by reference, and sold exclusively to IBM including providing supporting Services:

• Brocade 16Gb Fibre Channel Switch Module Product Requirements Document (“PRD”), filename “Brocade 16Gb ScSe for Beacon PRD 1.0.doc”, version 1.0 and any subsequent versions.

2.0BUYER REQUESTED PRODUCT CHANGES

The parties agree that part numbers, relevant descriptions, Prices, delivery terms, Lead Times and other Product specific terms not specifically addressed by this Agreement shall be determined pursuant to the following process: (i) Buyer will issue a RFQ and/or an EC request to Supplier for the affected Products, including relevant specifications and other requirements; (ii) Supplier shall respond to such RFQs and EC requests with a quote; (iii) If Buyer agrees to the Supplier quote, then Buyer will notify Supplier of its acceptance of such Supplier quote in writing or by the issuance of a revised WA and updates to Buyer's procurement internet portal. Such part numbers, relevant descriptions, Prices, delivery terms, Lead Times and other terms are incorporated herein by reference, and will not affect any of the other Products (not subject to change pursuant to this process) in any manner, unless a specific Product is identified in the RFQ and/or the EC as a replacement or change to an existing Product.

3.0PROPRIETARY OWNERSHIP

3.1Buyer Proprietary Ownership

Buyer retains all rights it has to the technology contained in the Buyer Software packaging and testing for Update Express Support Packages (USXP) as specified in Modular and Blade Systems Building Block Software Integration Guide under Buyer Proprietary ownership.

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Amendment 21    IBM Brocade Confidential

3.2Seller's Proprietary Ownership

Except for the proprietary information provided by Buyer as listed in Section 3.1 above and any Buyer patents that may read on the implementation, Supplier retains all ownership rights it has in Products; this PUA transfers no ownership rights in Products to Buyer.

4.0PART NUMBER UNIQUE TERMS

4.1Product Price List and Description

See Attachment #6 to SOW #3, Consolidated Price List

4.2Product Unit Terms and Repair Pricing

See Attachment #6 to SOW #3, Consolidated Price List

4.3Warranty Period

The warranty period for the Product is [**] months from the date of shipment. For Product that ships with fibre channel optical transceivers or small form factor pluggables (SFPs), the SFP warranty is the same as the Product. For SFPs that are shipped separate from the equipment, the SFP warranty period is [**] months from the date of shipment. All other terms and conditions of SOW#3 Section 8.2 for warranty period apply to this PUA.

5.0WA FLEXIBILITY

Number of Days prior to a WA Scheduled Delivery Date	Increase of Product Quantity to a WA Scheduled Delivery Date (% of WA Quantity)	Cancellation of Product Quantity to a WA Scheduled Delivery Date (% of WA Quantity)	Rescheduling of Product Quantity to a WA Scheduled Delivery Date (% of WA Quantity)
Less than 15 days	[**]	[**]	[**]
From 15 days to 30 days	[**]	[**]	[**]
From 30 days to 45 days	[**]	[**]	[**]
More than 45 days	[**]	[**]

While the above flexibility terms also apply to Pull Products, in the event the relevant Pull Profile has more favorable terms, then such more favorable terms shall take precedence.

6.0SUPPLIER PRODUCT WITHDRAWAL

Supplier will provide Buyer with [**] days' written notice of its intent to withdraw any Product (“End of Life” or “EOL”) prior to the last date of manufacture of a Product. Buyer shall provide to Supplier a non-binding forecast for Products and FRUs [**] days from the receipt of Supplier's notice of End of Life. Buyer shall provide to Supplier a non-cancelable last-time buy WA for forecasted Products no later than [**] days prior to the End of Life date (last date of manufacture or sales/distribution date). Such Product purchases must be scheduled to ship no later than the End of Life date. However, Buyer shall provide to Supplier last-time buy purchase FRU forecast [**] days prior to the End of Life date (last date of manufacture or sales/distribution date) and shall provide a non-cancelable WA for [**] of the total last time buy FRU forecast. Such purchases which may be rescheduled will be delivered upon Buyer's request during the [**] year term. For delivery requests outside of the Notice Period or order requests after Buyer's last-time buy purchase has been placed, Supplier will review on a case-by-case basis Buyer's request(s).

7.0SUPPLY OF PRODUCTS

Supplier shall deliver products as specified in WA/PO for forecasted orders. Notwithstanding any other provision of this Agreement (except force majeure), if due to a shortage Supplier is unable to deliver Products as specified, Supplier will notify Buyer of such inability to deliver Products along with an estimate of the duration of such shortage. If Supplier fails to correct such inability to supply Product or fails to develop a plan acceptable to Buyer, Buyer will have the right to cancel such POs or portions thereof by written notice. If Buyer cancels WA/PO, Buyer's only obligation is to pay for Products already delivered at the time of Buyer's cancellation notice.

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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Amendment 21    IBM Brocade Confidential

8.0COMMUNICATIONS

All communications between parties will be carried out through the following designated coordinators. All notices required in writing under this Agreement will be made to the appropriate contact listed below at the following addresses and will be effective upon actual receipt. Notices may be transmitted electronically, by registered or certified mail, or courier. All notices, with the exception of legal notices, may also be provided by facsimile.

8.1Business Coordinators

SUPPLIER	Brocade Communications Systems Inc.	BUYER	IBM
Name	[**]	Name	[**]
Title	[**]	Title	[**]
Address	[**]	Address	[**]
Phone	[**]	Phone	[**]
E-mail	[**]	E-mail	[**]

8.2Technical Coordinators

SUPPLIER	Brocade Communications Systems Inc.	BUYER	IBM
Name	[**]	Name	[**]
Title	[**]	Title	[**]
Address	[**]	Address	[**]
Phone	[**]	Phone	[**]
E-mail	[**]	E-mail	[**]

8.3Legal Coordinators

All legal notices will be sent to the following addresses and will be deemed received (a) two (2) days after mailing if sent by certified mail, return receipt requested or (b) on the date confirmation is received if sent by facsimile transmittal, to the party set forth below.

SUPPLIER	Brocade Communications Systems Inc.	BUYER	IBM
Name	[**]	Name	[**]
Title	[**]	Title	[**]
Address	[**]	Address	[**]
Phone	[**]	Phone	[**]
Fax	[**]	Fax (Fax notice shall be valid only when verbal confirmation of receipt is obtained.)	[**]
E-mail	[**]	E-mail	[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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Amendment 21    IBM Brocade Confidential

ATTACHMENT #6

PRODUCT PART NUMBERS AND PRICING

(see following pages)

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Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Switch Modules
Buyer Part Number	Supplier Part Number *	Fulfillment locations (if required) *	Product Description	Unit Price of Product	Ship group adder	Freight	**Software Maintenance	Direct Price (FCA)	Hub Price (DDU) DDU Incoterms 2000 = DAP Incoterms 2010
2GBit/sec Software Products (Refer to EOL section for Switch Module)
[**]	IB-3016TPM-01	Benchmark (Direct)	Performance Bundle (Performance Monitor and Trunking)	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-3016TRK-01	Benchmark (Direct)	ISL Trunking	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-3016PRF-01	Benchmark (Direct)	Advance Performance Monitor	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-3016EXF-01	Benchmark (Direct)	Extended Fabrics	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-FMG4-0000-M	Benchmark (Direct)	Fabric Manager v4.x	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-3016RSW-01	Benchmark (Direct)	Remote Switch Activation	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-3016SEC-01-M	Benchmark (Direct)	Advanced Security Activation	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-3016FLF-01	Benchmark (Direct)	Full SAN Scaling	[**]	[**]	[**]	[**]	[**]	[**]
2GBit/sec Software Products - Intel (Refer to EOL section for Switch Module)
[**]	IN-3016TPM-01	Benchmark (Direct)	Performance Bundle (Performance Monitor and Trunking)	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IN-3016TRK--01	Benchmark (Direct)	ISL Trunking	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IN-3016PRF-01	Benchmark (Direct)	Advance Performance Monitor	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IN-3016EXF-01	Benchmark (Direct)	Extended Fabrics	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IN-FMG4-0000-M	Benchmark (Direct)	Fabric Manager v4.x	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IN-3016RSW-01	Benchmark (Direct)	Remote Switch Activation	[**]	[**]	[**]	[**]	[**]	[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 1 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Switch Modules
Buyer Part Number	Supplier Part Number *	Fulfillment locations (if required) *	Product Description	Unit Price of Product	Ship group adder	Freight	**Software Maintenance	Direct Price (FCA)	Hub Price (DDU) DDU Incoterms 2000 = DAP Incoterms 2010
[**]	IN-3016SEC-01-M	Benchmark (Direct)	Advanced Security Activation	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IN-3016FLF-01	Benchmark (Direct)	Full SAN Scaling	[**]	[**]	[**]	[**]	[**]	[**]
4GBit/sec Software & POD Products (Refer to EOL section for Switch Module)
[**]	IB-4020PD1-01	Benchmark (Direct)	10 Port POD (SW4020)	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-4020FWH-01	Benchmark (Direct)	Fabric Watch	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-3016TPM-01	Benchmark (Direct)	Performance Bundle (Performance Monitor and Trunking)	[**]
[**]	IB-3016TRK-01	Benchmark (Direct)	ISL Trunking	[**]
[**]	IB-3016PRF-01	Benchmark (Direct)	Advance Performance Monitor	[**]
[**]	IB-3016EXF-01	Benchmark (Direct)	Extended Fabrics	[**]
[**]	IB-FMG5-0000-M	Benchmark (Direct)	Fabric Manager v5.x	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-3016SEC-01-M	Benchmark (Direct)	Advanced Security Activation	[**]
8GBit/sec Products (Brocade 8Gb Fibre Channel Switch Module)
[**]	IB-5470-0005-M	DIRECT and HUB LOCATIONS	ASM Switch Module, 20 Port, Multi-pack; MUST be ordered in quantities of 10	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-5470-0002	DIRECT	FRU, Brocade 8Gb Switch Module, 20 Port	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-5470-0004-M	DIRECT and HUB LOCATIONS	ASM Switch Module, 10 Port, Multi-pack; MUST be ordered in quantities of 10	[**]	[**]	[**]	[**]	[**]	[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 2 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Switch Modules
Buyer Part Number	Supplier Part Number *	Fulfillment locations (if required) *	Product Description	Unit Price of Product	Ship group adder	Freight	**Software Maintenance	Direct Price (FCA)	Hub Price (DDU) DDU Incoterms 2000 = DAP Incoterms 2010
[**]	XIB-5470-0001	DIRECT	FRU, Brocade 8Gb Switch Module, 10 Port	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-5470-0006-M	DIRECT and HUB LOCATIONS	ASM Enterprise Switch Module, 20 Port, Multi-pack; MUST be ordered in quantities of 10	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-5470-0003	DIRECT	FRU, Enterprise Brocade 8Gb Switch Module, 20 Port	[**]	[**]	[**]	[**]	[**]	[**]
16GBit/sec Products (Brocade 16Gb Fibre Channel Switch Module)
Brocade 16Gb FC Switch Module
[**]	IB-6547-0001-M	DIRECT and HUB LOCATIONS	IBM Flex System FC5022 16Gb SAN Scalable Switch 12-port	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-6547-0001	DIRECT and HUB LOCATIONS	FRU, IBM Flex System FC5022 16Gb SAN Scalable Switch 12-port	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-6547-0003-M	DIRECT and HUB LOCATIONS	IBM Flex System FC5022 24-port 16Gb ESB SAN Scalable Switch (Includes FW, APM, ISL, EF, AN, & SAO)	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-6547-0003	DIRECT and HUB LOCATIONS	FRU, IBM Flex System FC5022 24-port 16Gb ESB SAN Scalable Switch (Includes FW, APM, ISL, EF, AN, & SAO)	[**]	[**]	[**]	[**]	[**]	[**]
Optional Software (Features on Demand)
[**]	IB-EMBD12POD-01	FOD	12-port POD1	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-EMBD24POD-01	FOD	24-port POD2	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-EFODFW-01	FOD	Fabric Watch	[**]	[**]	[**]	[**]	[**]	[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 3 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Switch Modules
Buyer Part Number	Supplier Part Number *	Fulfillment locations (if required) *	Product Description	Unit Price of Product	Ship group adder	Freight	**Software Maintenance	Direct Price (FCA)	Hub Price (DDU) DDU Incoterms 2000 = DAP Incoterms 2010
[**]	IB-EFODTRK-01	FOD	ISL Trunking	[**]	[**]	[**]	[**]	[**]	[**]
Brocade 16Gb FC 24p Switch Module Bundle
[**]	IB-6547-0004-M	DIRECT and HUB LOCATIONS	Base Embedded switch 24-ports 16Gb; Includes qty-2 16Gb FC SFPs bundled	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-6547-0004	DIRECT and HUB LOCATIONS	FRU, Base Embedded switch 24-ports 16Gb; No SFP's	[**]	[**]	[**]	[**]	[**]	[**]
FCoE Switch Module
[**]	IB-8470-0001-M	DIRECT and HUB LOCATIONS	Brocade 10Gb CEE/FC High Speed Switch Module for IBM BladeCenter, 2x10G SFPs installed. Includes Accessory and Gasket kits. MUST be ordered in quantity of 5	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-8470-0001	DIRECT	FRU, 10Gb CEE/FC High Speed Switch Module, No SFP installed; single-pack	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-EMBD14POD-0001	DIRECT and HUB LOCATIONS	14-port Dynamic Ports On Demand (DPOD) Upgrade Kit. Includes qty-2 8Gb SWL SFP's. MUST be ordered in quantity of 10	[**]	[**]	[**]	[**]	[**]	[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 4 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Adapters
Buyer Part Number	Supplier Part Number *	Product Description	Unit Price of Product	Ship group adder	Freight	**Software Maintenance	Direct Price (FCA)	Hub Price (DDU) DDU Incoterms 2000 = DAP Incoterms 2010
Brocade 4Gb FC Single & Dual port HBA for System x
[**]	IB-415-0000	Brocade 4Gb FC Single-port HBA for IBM System x; 3U bracket; 1x4G SWL SFP installed MUST be ordered in quantity of 20 units	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-415-0010	FRU for Brocade single-port 4GB FC HBA with 3U bracket attached, 1x4G SWL SFP installed and 1x2U bracket in clamshell, 5-pack, MUST be ordered in qty of 5 units	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-400-0001	Bracket, 2U, Single-port 4Gb; MUST be ordered in quantity of 140 units	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-425-0000	Brocade 4Gb FC Dual-port HBA for IBM System x; 3U bracket; 2x4G SWL SFP installed MUST be ordered in quantity of 20 units	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-425-0010	FRU for Brocade dual-port 4GB FC HBA with 3U bracket attached, 2x4G SWL SFP installed and 1x2U bracket in clamshell, 5-pack, MUST be ordered in qty of 5 units	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-400-0002	Bracket, 2U, Dual-port 4Gb; MUST be ordered in quantity of 140 units	[**]	[**]	[**]	[**]	[**]	[**]
Brocade 8Gb FC Single & Dual port HBA for System x
[**]	IB-815-0000	Single port, PCI Express 2.0 adapter, 3U bracket, 1 x 8G SWL SFP installed; no documentation MUST be ordered in quantity of 20 units	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-815-0010	FRU Single port, PCI Express 2.0 adapter, 3U bracket, 1 x 8G SWL SFP installed; 1 x 2U bracket in clamshell MUST be ordered in quantity of 5 units	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-800-0001	Single port 2U bracket MUST be ordered in quantity of 140 units	[**]	[**]	[**]	[**]	[**]	[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 5 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Adapters
Buyer Part Number	Supplier Part Number *	Product Description	Unit Price of Product	Ship group adder	Freight	**Software Maintenance	Direct Price (FCA)	Hub Price (DDU) DDU Incoterms 2000 = DAP Incoterms 2010
[**]	IB-825-0000	Dual port, PCI Express 2.0 adapter, 3U bracket, 2 x 8G SWL SFP installed; no documentation MUST be ordered in quantity of 20 units	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-825-0010	FRU Dual port, PCI Express 2.0 adapter, 3U bracket, 2 x 8G SWL SFP installed; 1 x 2U bracket in clamshell MUST be ordered in quantity of 5 units	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-800-0002	Dual port 2U bracket MUST be ordered in quantity of 140 units	[**]	[**]	[**]	[**]	[**]	[**]
Brocade 16Gb Dual-Port Fibre Channel Mezzanine Adapter
[**]	IB-1867-2001	IBM Flex System FC5022 2-port 16Gb Adapter; Assembly; NO SFP's. MUST be ordered in quantities of 20	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-1867-2000	FRU; IBM Flex System FC5022 2-port 16Gb Adapter; NO SFP's.	[**]	[**]	[**]	[**]	[**]	[**]
Brocade 16Gb Fibre Channel Host Bus Adapter
[**]	IB-1860-1F01	Brocade 16Gb FC Single-port HBA for IBM System x; 3U bracket; 1 x 16Gb SWL SFP installed MUST be ordered in quantities of 20 units	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-1860-1F00	FRU: Brocade 16Gb FC Single-port HBA for IBM System x; 3U bracket; 1 x 16Gb SWL SFP installed; 1 x 2U bracket in clamshell	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-1860-2F01	Brocade 16Gb FC Dual-port HBA for IBM System x; 3U bracket; 2 x 16Gb SWL SFPs installed MUST be ordered in quantities of 20 units	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-1860-2F00	FRU: Brocade 16Gb FC Dual-port HBA for IBM System x; 3U bracket; 2 x 16Gb SWL SFPs installed; 1 x 2U bracket in clamshell MUST be ordered in quantities of 5 units	[**]	[**]	[**]	[**]	[**]	[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 6 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Adapters
Buyer Part Number	Supplier Part Number *	Product Description	Unit Price of Product	Ship group adder	Freight	**Software Maintenance	Direct Price (FCA)	Hub Price (DDU) DDU Incoterms 2000 = DAP Incoterms 2010
[**]	IB-1860-BRK1	Brocade Single-port Bracket, Low profile MUST be ordered in quantities of 140 units	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-1860-BRK2	Brocade Dual-port Bracket, Low profile MUST be ordered in quantities of 140 units	[**]	[**]	[**]	[**]	[**]	[**]
Brocade 10Gb Dual-Port CNA FCoCEE Dual Port HBA for IBM System x
[**]	IB-1020-1000	Brocade 10Gb FCoCEE Dual port CNA, 3U bracket, NO SFPs installed; no documentation MUST be ordered in quantity of 20 units	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-1020-1010	FRU, 10Gb Dual-Port CNA with 3u bracket attached, NO SFPs installed, 2u bracket in clamshell; single FRU pack overpacked in multipack. MUST be ordered in quantity of 5 units.	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-1000-0002	Dual port 2u bracket (140pc bulk package) MUST be ordered in quantity of 140 units	[**]	[**]	[**]	[**]	[**]	[**]
Brocade 2-port Converged Network Adapter (CFFh) for IBM BladeCenter
[**]	IB-1007-0000	CFFh 2-port 10Gb Converged Enhanced Ethernet Expansion Card for IBM BladeCenter. MUST be ordered in quantity of 20 units.	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-1007-0010	FRU, CFFh 2-port 10Gb Converged Enhanced Ethernet Expansion Card; single-pack	[**]	[**]	[**]	[**]	[**]	[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 7 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Transceivers
Buyer Part Number	Supplier Part Number *	Product Description	Unit Price of Product	Ship group adder	Freight	**Software Maintenance	Direct Price (FCA)	Hub Price (DDU) DDU Incoterms 2000 = DAP Incoterms 2010
4Gb TRANSCEIVERS
[**]	XIB-000191	FRU for Brocade 4Gb SFP+ Optical Transceiver	[**]	[**]	[**]	[**]	[**]	[**]
8Gb TRANSCEIVERS
[**]	IB-000150	Brocade 8Gb P3 SWL SFP, 1-pack	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-000150	FRU, 8Gb P3 SWL SFP (single pack) Brocade 8Gb Shortwave length SFP module, 1-pack	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-000293	Brocade P3 SFP+, SWL, 8G, 1-PACK, IBM System x	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-000293	FRU, P3 SFP+, SWL, 8G, 1-PACK, IBM System x	[**]	[**]	[**]	[**]	[**]	[**]
16Gb TRANSCEIVERS
[**]	IB-000292	Brocade SFP+, SWL, 16Gb, 1-PACK, IBM System x	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-000292	FRU, SFP+, SWL, 16Gb, 1-PACK, IBM System x	[**]	[**]	[**]	[**]	[**]	[**]
10Gb TRANSCEIVERS
[**]	IB-000180	Brocade 10G SR SFP+ (1-pack)	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-000180	FRU, Brocade 10G SR SFP+ (1-pack)	[**]	[**]	[**]	[**]	[**]	[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 8 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Repair - Switch Modules
Buyer P/N	Supplier P/N	Description	TAT (In warranty or out of warranty repair)	Repair Price (USD)*
2GBit/sec Products (Brocade 2Gb Fibre Channel Switch Module) - END OF LIFE
[**]	IB-3016-0001-M	Option, FC Switch Module	[**]	[**]
[**]	XIB-3016-V200	CRU, Value Line Switch Module	[**]	[**]
[**]	IB-3016-0000-M	Asm, FC Switch Module	[**]	[**]
[**]	IB-3016-V201-M	Option, Value Line Module	[**]	[**]
[**]	IB-3016-V200-M	Asm, Value Line Module	[**]	[**]
[**]	IN-3016-0001	Option, FC Switch Module	[**]	[**]
[**]	XIN-3016-V200	CRU, Value Line Switch Module	[**]	[**]
[**]	IN-3016-V201-M	Option, Value Line Module	[**]	[**]
4GBit/sec Products (Brocade 4Gb Fibre Channel Switch Module) - END OF LIFE
[**]	IB-4020-0002-M	Option, FC Switch Module (20 port), includes Fabric OS, Advance Zoning, Web Tools and ship group	[**]	[**]
[**]	XIB-4020-0002	CRU, FC Switch Module (20 port)	[**]	[**]
[**]	IB-4020-0001-M	Option, FC Switch Module (10 port), includes Fabric OS, Advance Zoning, Web Tools and ship group	[**]	[**]
[**]	XIB-4020-0001	CRU, FC Switch Module (10 port), includes Fabric OS, Advance Zoning, Web Tools and ship group	[**]	[**]
8GBit/sec Products (Brocade 8Gb Fibre Channel Switch Module)
[**]	IB-5470-0004-M	ASM Switch Module, 10 Port, Multi-pack; MUST be ordered in quantities of 10	[**]	[**]
[**]	IB-5470-0005-M	ASM Switch Module, 20 Port, Multi-pack; MUST be ordered in quantities of 10	[**]	[**]
[**]	IB-5470-0006-M	ASM Enterprise Switch Module, 20 Port, Multi-pack; MUST be ordered in quantities of 10	[**]	[**]
[**]	XIB-5470-0001	FRU, Brocade 8Gb Switch Module, 10 Port	[**]	[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 9 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Repair - Switch Modules
Buyer P/N	Supplier P/N	Description	TAT (In warranty or out of warranty repair)	Repair Price (USD)*
[**]	XIB-5470-0002	FRU, Brocade 8Gb Switch Module, 20 Port	[**]	[**]
[**]	XIB-5470-0003	FRU, Enterprise Brocade 8Gb Switch Module, 20 Port	[**]	[**]
16GBit/sec Products (Brocade 16Gb Fibre Channel Switch Module)
[**]	IB-6547-0001-M	IBM Flex System FC5022 16Gb SAN Scalable Switch 12-port	[**]	[**]
[**]	XIB-6547-0001	FRU, IBM Flex System FC5022 16Gb SAN Scalable Switch 12-port	[**]	[**]
[**]	IB-6547-0003-M	IBM Flex System FC5022 24-port 16Gb ESB SAN Scalable Switch (Includes FW, APM, ISL, EF, AN, & SAO)	[**]	[**]
[**]	XIB-6547-0003	FRU, IBM Flex System FC5022 24-port 16Gb ESB SAN Scalable Switch (Includes FW, APM, ISL, EF, AN, & SAO)	[**]	[**]
[**]	IB-6547-0004-M	Base Embedded switch 24-ports 16Gb; Includes qty-2 16Gb FC SFPs bundled	[**]	[**]
[**]	XIB-6547-0004	FRU, Base Embedded switch 24-ports 16Gb; No SFP's	[**]	[**]
FCoE Switch Module
[**]	IB-8470-0001-M	Brocade 10Gb CEE/FC High Speed Switch Module for IBM BladeCenter, 2x10G SFPs installed. Includes Accessory and Gasket kits. MUST be ordered in quantity of 5	[**]	[**]
[**]	XIB-8470-0001	FRU, 10Gb CEE/FC High Speed Switch Module, No SFP installed; single-pack	[**]	[**]
*Repair Price applies only to Products sent to Supplier for Repair, which are not covered by the warranties in the Agreement.

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 10 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Repair - Switch Modules
Buyer P/N	Supplier P/N	Description	TAT (In warranty or out of warranty repair)	Repair Price (USD)*
The following part numbers are to be used as replacements by Supplier when notified by Buyer
that product has arrived "dead on arrival"
Buyer P/N	Supplier P/N	Description		Repair Price (USD)*
8GBit/sec Products (for DOA purposes ONLY - NOT orderable by buyer)
N/A	IB-5470-0001	Option Fiber Channel Switch Module, 10 Port		[**]
N/A	IB-5470-0002	Option Fiber Channel Switch Module, 20 Port		[**]
N/A	IB-5470-0003	Enterprise Switch Module, 20 Port		[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 11 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Repair - Adapters
Buyer Part Number	Supplier Part Number *	Product Description	TAT (In warranty or out of warranty repair)	Repair Price (USD)*
Brocade 4Gb FC Single & Dual port HBA for System x *
[**]	XIB-415-0010	FRU for Brocade single-port 4GB FC HBA with 3U bracket attached, 1x4G SWL SFP installed and 1x2U bracket in clamshell, 5-pack, MUST be ordered in qty of 5 units	[**]	[**]
[**]	XIB-425-0010	FRU for Brocade dual-port 4GB FC HBA with 3U bracket attached, 2x4G SWL SFP installed and 1x2U bracket in clamshell, 5-pack, MUST be ordered in qty of 5 units	[**]	[**]
Brocade 8Gb FC Single & Dual port HBA for System x *
[**]	XIB-815-0010	FRU Single port, PCI Express 2.0 adapter, 3U bracket, 1 x 8G SWL SFP installed; 1 x 2U bracket in clamshell	[**]	[**]
[**]	XIB-825-0010	FRU Dual port, PCI Express 2.0 adapter, 3U bracket, 2 x 8G SWL SFP installed; 1 x 2U bracket in clamshell	[**]	[**]
Brocade 16Gb Dual-Port Fibre Channel Mezzanine Adapter
[**]	IB-1867-2001	IBM Flex System FC5022 2-port 16Gb Adapter; Assembly; NO SFP's. MUST be ordered in quantities of 20	[**]	[**]
[**]	XIB-1867-2000	FRU; IBM Flex System FC5022 2-port 16Gb Adapter; NO SFP's.	[**]	[**]
Brocade 16Gb Fibre Channel Host Bus Adapter
[**]	IB-1860-1F01	Brocade 16Gb FC Single-port HBA for IBM System x; 3U bracket; 1 x 16Gb SWL SFP MUST be ordered in quantities of 20 units	[**]	[**]
[**]	IB-1860-2F01	Brocade 16Gb FC Dual-port HBA for IBM System x; 3U bracket; 2 x 16Gb SWL SFP MUST be ordered in quantities of 20 units	[**]	[**]
[**]	XIB-1860-1F00	FRU: Brocade 16Gb FC Single-port HBA for IBM System x; 3U bracket; 1 x 16Gb SWL SFP; 1 x 2U bracket in clamshell MUST be ordered in quantities of 5 units	[**]	[**]
[**]	XIB-1860-2F00	FRU: Brocade 16Gb FC Dual-port HBA for IBM System x; 3U bracket; 2 x 16Gb SWL SFP; 1 x 2U bracket in clamshell MUST be ordered in quantities of 5 units	[**]	[**]
* Products listed are replacement only as covered by the warranties in the agreement.
Brocade 10Gb Dual-Port CNA FCoCEE Dual Port HBA for IBM System x*

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 12 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Repair - Adapters
Buyer Part Number	Supplier Part Number *	Product Description	TAT (In warranty or out of warranty repair)	Repair Price (USD)*
[**]	XIB-1020-1010	FRU, 10Gb Dual-Port CNA with 3u bracket attached, No SFP installed, 2u bracket in clamshell; single FRU pack overpacked in multipack. MUST be ordered in quantity of 5 units.	[**]	[**]
[**]	XIB-000180	FRU, Brocade 10G SR SFP+ (1-pack)	[**]	[**]
Brocade 2-port Converged Network Adapter (CFFh) for IBM BladeCenter
[**]	IB-1007-0000	CFFh 2-port 10Gb Converged Enhanced Ethernet Expansion Card for IBM BladeCenter. MUST be ordered in quantity of 20 units.	[**]	[**]
[**]	XIB-1007-0010	FRU, CFFh 2-port 10Gb Converged Enhanced Ethernet Expansion Card; single-pack	[**]	[**]
* Products listed are replacement only as covered by the warranties in the agreement.
The following part numbers are to be used as replacements by Supplier when notified by Buyer
that product has arrived "dead on arrival"
Buyer P/N	Supplier P/N	Description		Repair Price (USD)*
Brocade 16Gb Dual-Port Fibre Channel Mezzanine Adapter (for DOA purposes only - NOT orderable by buyer)
N/A	IB-1867-2000	IBM Flex System FC5022 2-port 16Gb Adapter; Assembly	[**]	[**]
Brocade 16Gb Fibre Channel Host Bus Adapter (for DOA purposes only - NOT orderable by buyer)
NA	IB-1860-1F00	Brocade 16Gb FC Single-port HBA for IBM System x, 1-pack; Includes 1 x 16Gb SWL SFP	[**]	[**]
NA	IB-1860-2F00	Brocade 16Gb FC Dual-port HBA for IBM System x, 1-pack; Includes qty-2 x 16Gb SWL SFP's	[**]	[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 13 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - Repair - Transceivers
Buyer Part Number	Supplier Part Number *	Product Description	TAT (In warranty or out of warranty repair)	Repair Price (USD)*
4Gb TRANSCEIVERS
[**]	XIB-000191	FRU for Brocade 4Gb SFP+ Optical Transceiver	[**]	[**]
8Gb TRANSCEIVERS
[**]	IB-000150	Brocade 8Gb P3 SWL SFP, 1-pack	[**]	[**]
[**]	XIB-000150	FRU, 8Gb P3 SWL SFP (single pack) Brocade 8Gb Shortwave length SFP module, 1-pack	[**]	[**]
[**]	IB-000293	Brocade P3 SFP+, SWL, 8G, 1-PACK, IBM System x	[**]	[**]
[**]	XIB-000293	FRU, P3 SFP+, SWL, 8G, 1-PACK, IBM System x	[**]	[**]
16Gb TRANSCEIVERS
[**]	IB-000292	Brocade SFP+, SWL, 16Gb, 1-PACK, IBM System x	[**]	[**]
[**]	XIB-000292	FRU, SFP+, SWL, 16Gb, 1-PACK, IBM System x	[**]	[**]
10Gb TRANSCEIVERS
[**]	IB-000180	Brocade 10G SR SFP+ (1-pack)	[**]	[**]
[**]	XIB-000180	FRU, Brocade 10G SR SFP+ (1-pack)	[**]	[**]
* Products listed are replacement only as covered by the warranties in the agreement.

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 14 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - EOL-Switch Modules- END OF LIFE PRODUCTS ONLY
Buyer Part Number	Supplier Part Number *	Fulfillment locations (if required) *	Product Description	Unit Price of Product	Ship group adder	Freight	**Software Maintenance	Direct Price (FCA)	Hub Price (DDU)
2GBit/sec Products (Brocade 2Gb Fibre Channel Switch Module) - END OF LIFE
[**]	IB-3016-0001-M	HUB LOCATIONS: - Hungary - Guadalajara IIPC (Direct)	Option, FC Switch Module, includes Fabric OS, Fabric Watch, Advance Zoning, Web Tools and ship group	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-3016-V200	Mechanicsburg (Direct)	CRU, Value line FC Switch Module	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-3016-0000-M	TBD	Asm, FC Switch Module, includes Fabric OS, Fabric Watch, Advance Zoning, and Web Tools	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-3016-V201-M	HUB LOCATIONS: - Hungary - Guadalajara IIPC (Direct)	Option, Value Line Module	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-3016-V200-M	TBD	Asm, Value Line Module	[**]	[**]	[**]	[**]	[**]	[**]
2GBit/sec Products (Brocade 2Gb Fibre Channel Switch Module / INTEL) - END OF LIFE
[**]	IN-3016-0001-M	IIPC (Direct)	Option, FC Switch Module, includes Fabric OS, Fabric Watch, Advance Zoning, Web Tools and ship group	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIN-3016-V200	IIPC (Direct)	CRU, Value line FC Switch Module	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IN-3016-V201-M	IIPC (Direct)	Option, Value Line Module	[**]	[**]	[**]	[**]	[**]	[**]
4GBit/sec Products (Brocade 4Gb Fibre Channel Switch Module) - END OF LIFE

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 15 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - EOL-Switch Modules- END OF LIFE PRODUCTS ONLY
Buyer Part Number	Supplier Part Number *	Fulfillment locations (if required) *	Product Description	Unit Price of Product	Ship group adder	Freight	**Software Maintenance	Direct Price (FCA)	Hub Price (DDU)
[**]	IB-4020-0002-M	HUB LOCATIONS: - Hungary - Guadalajara May 1, 2008 Add: - China DIRECT: Dublin, Rochester, & IBM International Holdings B.V. Singapore Branch	Option, FC Switch Module (20 port), includes Fabric OS, Advance Zoning, Web Tools and ship group	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-4020-0004-M	HUB LOCATIONS: - Hungary - Guadalajara May 1, 2008 Add: - China DIRECT: Dublin, Rochester, & IBM International Holdings B.V. Singapore Branch	Multi-pack of FC Switch Module (20 port), includes Fabric OS, Advance Zoning, Web Tools; NO ship group; MUST be ordered in quantity of 10	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-4020-0002	Mechanicsburg (Direct)	CRU, FC Switch Module (20 port)	[**]	[**]	[**]	[**]	[**]	[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 16 of 17

Amendment 21    IBM Brocade Confidential

Base Agreement #4999RO0015 Statement of Work #4903RL1112 Amendment 21 - Attachment 6 DATE: October 18, 2012 FINAL PRODUCT PRICE LIST AND DESCRIPTION - EOL-Switch Modules- END OF LIFE PRODUCTS ONLY
Buyer Part Number	Supplier Part Number *	Fulfillment locations (if required) *	Product Description	Unit Price of Product	Ship group adder	Freight	**Software Maintenance	Direct Price (FCA)	Hub Price (DDU)
[**]	IB-4020-0001-M	HUB LOCATIONS: - Hungary - Guadalajara May 1, 2008 Add: - China DIRECT: Dublin, Rochester, & IBM International Holdings B.V. Singapore Branch	Option, FC Switch Module (10 port), includes Fabric OS, Advance Zoning, Web Tools and ship group	[**]	[**]	[**]	[**]	[**]	[**]
[**]	IB-4020-0003-M	HUB LOCATIONS: - Hungary - Guadalajara May 1, 2008 Add: - China DIRECT: Dublin, Rochester, & IBM International Holdings B.V. Singapore Branch	Multi-pack of FC Switch Module (10 port), includes Fabric OS, Advance Zoning, Web Tools, NO ship group; MUST be ordered in quantity of 10	[**]	[**]	[**]	[**]	[**]	[**]
[**]	XIB-4020-0001	Mechanicsburg -Direct	CRU, FC Switch Module (10 port), includes Fabric OS, Advance Zoning, Web Tools and ship group	[**]	[**]	[**]	[**]	[**]	[**]

[**] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Goods Agreement #ROC-P-68; Statement of Work #4903RL1112    Page 17 of 17

Amendment 21    IBM Brocade Confidential

EX-12.1

Exhibit 12.1

Statement of Computation of Ratio of Earnings to Fixed Charges

(in thousands, except ratios)

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010			October 31, 2009			October 25, 2008
Earnings from continuing operations before taxes	224,401		79,428		106,970			(76,575	)		19,050
Adjustments:
Add fixed charges	55,745		101,349		99,824			115,668			23,732
Less capitalized interest	—		—		(7,755	)		(9,093	)		(970	)
Total fixed charges from continuing operations	55,745		101,349		92,069			106,575			22,762
Earnings before taxes and fixed charges, net of capitalized interest	280,146		180,777		199,039			30,000			41,812
Fixed charges:
Interest expense	52,488		97,838		85,858			99,294			17,249
Capitalized interest	—		—		7,755			9,093			970
Interest component of rent expense	3,257		3,511		6,211			7,281			5,513
Total fixed charges from continuing operations	55,745		101,349		99,824			115,668			23,732
Ratio of earnings to fixed charges (1)	5.0	x	1.8	x	2.0		x	0.3		x	1.8		x
Coverage deficiency	—		—		—			85,668			—

(1) The ratio of earnings to fixed charges was computed by dividing earnings from continuing operations before taxes and fixed charges, net of capitalized interest, by total fixed charges from continuing operations for the periods indicated. Fixed charges from continuing operations include (i) interest expense and capitalization and amortization of debt discount and issuance costs on all indebtedness and (ii) one-third of all rental expense, which the Company considers to be a reasonable approximation of the interest factor included in rental expense.

EX-21.1

Exhibit 21.1

Subsidiaries of the Registrant

Foundry Networks, LLC (a US company)

Brocade Switzerland Holdings GmbH (a Swiss company)

Brocade Technology GmbH (a Swiss company)

Brocade Communications Luxembourg SarL (a Luxembourg company)

Brocade Communications Luxembourg Holdings II SCS (a Luxembourg partnership treated as a US corporation for income tax purpose)

Brocade Communications Luxembourg Holdings SarL (a Luxembourg company)

Brocade has an additional 40 international subsidiaries and 4 domestic subsidiaries, which have been omitted pursuant to Item 601(b)(21)(ii) of Regulation S-K.

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Brocade Communications Systems, Inc.:

We consent to the incorporation by reference in the registration statement on Form S 8 (Nos. 333-181851, 333 158874, 333 156413, 333 156140, 333 143053, 333 140334, 333 129909, 333 129908, 333 117897, 333 103571, 333 100797, 333 72480, 333 64260, 333 53734, 333 39126, 333 95653, and 333 85187) of Brocade Communications Systems, Inc. of our reports dated December 14, 2012 with respect to the consolidated balance sheets of Brocade Communications Systems, Inc. and subsidiaries as of October 27, 2012 and October 29, 2011 and the related consolidated statements of operations, cash flows, and stockholders’ equity, and comprehensive income (loss) for each of the years in the three year period ended October 27, 2012, and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of October 27, 2012, which reports appear in the 2012 annual report on Form 10 K of Brocade Communications Systems, Inc.

/s/ KPMG LLP

Santa Clara, California

December 14, 2012

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Michael Klayko, certify that:

1. I have reviewed this Annual Report on Form 10-K for the year ended October 27, 2012 of Brocade Communications Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 14, 2012

/S/    MICHAEL KLAYKO        

Michael Klayko

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Daniel W. Fairfax, certify that:

1. I have reviewed this Annual Report on Form 10-K for the year ended October 27, 2012 of Brocade Communications Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 14, 2012

/S/    DANIEL W. FAIRFAX       

Daniel W. Fairfax

Chief Financial Officer

(Principal Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael Klayko, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K of Brocade Communications Systems, Inc. for the fiscal year ended October 27, 2012 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Brocade Communications Systems, Inc.

Date: December 14, 2012

By:	/S/    MICHAEL KLAYKO
	Michael Klayko
	Chief Executive Officer

I, Daniel W. Fairfax, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K of Brocade Communications Systems, Inc. for the fiscal year ended October 27, 2012 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Brocade Communications Systems, Inc.

Date: December 14, 2012

By:	/S/    DANIEL W. FAIRFAX
	Daniel W. Fairfax
	Chief Financial Officer

XML

Commitments And Contingencies (Tables)

12 Months Ended

Oct. 27, 2012

Commitments and Contingencies Disclosure [Abstract]

Schedule of Rent Expense

The following table presents the composition of net rent expense included on the Consolidated Statements of Operations (in thousands):

	Fiscal Year Ended
	October 27, 2012			October 29, 2011			October 30, 2010
Rent expense	$	25,867		$	26,576		$	35,781
Less: Sublease income	(6,606		)	(5,643		)	(4,762		)
	$	19,261		$	20,933		$	31,019

Schedule of Future Minimum Rental Payments for Operating Leases

Future minimum lease payments under all non-cancelable operating leases as of October 27, 2012, excluding the contractual sublease income of $28.7 million, are as follows (in thousands):

Fiscal Year	Operating Leases
2013	$	22,471
2014	18,577
2015	15,311
2016	13,807
2017	5,638
Thereafter	6,585
Total minimum lease payments	$	82,389

Schedule of Future Minimum Lease Payments for Capital Leases

Future minimum lease payments under all non-cancelable capital leases as of October 27, 2012 are as follows (in thousands):

Fiscal Year	Capital Leases
2013	$	2,221
2014	2,221
2015	862
2016	—
Total minimum lease payments	5,304
Less: Amount representing interest	(388		)
Present value of net minimum lease payments	$	4,916

Schedule Of Accrued Liability For Estimated Future Warranty Costs

The following table summarizes the activity related to the Company’s accrued liability for estimated future warranty costs during the fiscal years ended October 27, 2012 and October 29, 2011 (in thousands):

	Accrued Warranty
	Twelve Months Ended
	October 27, 2012			October 29, 2011
Beginning balance	$	11,298		$	5,980
Liabilities accrued for warranties issued during the period	5,929			8,388
Warranty claims paid and used during the period	(575		)	(1,394		)
Changes in liability for pre-existing warranties during the period	(2,199		)	(1,676		)
Ending balance	$	14,453		$	11,298

XML

Liabilities Associated With Facilities Lease Losses (Schedule Of Facilities Lease Loss Reserve) (Details) (Facility Closing [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011
Facility Closing [Member]
Restructuring Reserve [Roll Forward]
Facilities Lease Losses Reserve, Beginning Balance	$ 3,952	$ 9,976
Cash payments on facilities leases	(1,334)	(6,024)
Other adjustments, net	(36)
Facilities Lease Losses Reserve, Ending Balance	$ 2,582	$ 3,952

XML

Summary Of Significant Accounting Policies (Concentration of Risk Narrative)(Details)	Oct. 27, 2012 customer	Oct. 29, 2011	Oct. 30, 2010
Accounts Receivable
Concentration Risk
Number Of Customers Included In Accounts Receivable Concentration Disclosures	3	2
Concentration Risk, Percentage	38.00%	30.00%
Accounts Receivable | Major Customer One
Concentration Risk
Concentration Risk, Percentage	16.00%	14.00%
Accounts Receivable | Major Customer Two
Concentration Risk
Concentration Risk, Percentage	12.00%	16.00%
Accounts Receivable | Major Customer Three
Concentration Risk
Concentration Risk, Percentage	10.00%
Sales Revenue, Segment
Concentration Risk
Number Of Customers Included In Revenue Concentration Disclosures	3
Concentration Risk, Percentage	47.00%	43.00%	47.00%
Sales Revenue, Segment | EMC Corporation
Concentration Risk
Concentration Risk, Percentage	16.00%	15.00%	16.00%
Sales Revenue, Segment | Hewlett Packard Corporation
Concentration Risk
Concentration Risk, Percentage	13.00%	13.00%	14.00%
Sales Revenue, Segment | International Business Machines Corporation
Concentration Risk
Concentration Risk, Percentage	18.00%	15.00%	17.00%

XML

Commitments And Contingencies Commitments And Contingencies (Schedule of Future Minimum Lease Payments for Capital Leases) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 27, 2012
Capital Leases, Future Minimum Payments Due
2013	$ 2,221
2014	2,221
2015	862
2016	0
Total minimum lease payments	5,304
Amount representing interest	(388)
Present value of net minimum lease payments	$ 4,916

XML

Balance Sheet Details Balance Sheet Details (Schedule of Accounts Receivable) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 27, 2012	Oct. 29, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for Doubtful Accounts	$ (833)	$ (1,388)
Accounts receivable, net	233,139	249,141
Trade Accounts Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross	243,731	255,540
Allowance for Doubtful Accounts	(833)	(1,388)
Sales Allowance	(9,759)	(5,011)
Accounts receivable, net	$ 233,139	$ 249,141

XML

Employee Compensation Plans Employee Compensation Plans (Narrative) (Details) (USD $)	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
2009 Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award
Additional shares authorized under plan	35,000,000
Shares authorized for issuance under plan	83,000,000
Maximum number of shares to be added to the plan	40,300,000
2009 Director Plan
Share-based Compensation Arrangement by Share-based Payment Award
Shares authorized for issuance under plan	2,000,000
Maximum number of shares to be added to the plan	900,000
2009 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award
Additional shares authorized under plan	30,000,000
Shares authorized for issuance under plan	65,000,000
Shares available for issuance under plan	38,700,000
Maximum payroll deductions	15.00%
Discount from Market Price At Offering Date	85.00%
Maximum number of shares to be purchased per employee	3,750
Plan Offering Period	24 months
Plan Purchase Period	6 months
Number of purchase periods	4
Equity Compensation Plans
Share-based Compensation Arrangement by Share-based Payment Award
Shares authorized for issuance under plan	126,700,000	100,600,000
Shares available for issuance under plan	76,000,000	26,500,000
Reduction In Number Of Shares Available For Issuance	1.56
Minimum Percentage Holding Requirement For Principal Shareholder	10.00%
Minimum Fair Market Value Of The Shares Granted To Principal Shareholder	110.00%
Expiration Date For Stock Options And Stock Appreciation Rights Maximum Time From Grant Date - 10% owners	5 years
Expiration Date For Stock Options And Stock Appreciation Rights Maximum Time From Grant Date	7 years
Award vesting period (years), minimum	3
Award vesting period (years), maximum	4
1999 Nonstatutory Stock Option Plan
Share-based Compensation Arrangement by Share-based Payment Award
Shares reserved for issuance under director plan	51,400,000
Shares Remaining For Future Issuance	5,200,000
Mcdata Equity Plans
Share-based Compensation Arrangement by Share-based Payment Award
Shares authorized for issuance under plan	1,600,000
Employee 401 K Plan
Share-based Compensation Arrangement by Share-based Payment Award
Company's matching contributions to the 401(k) Plan	$ 9,100,000	$ 9,300,000	$ 8,700,000
Maximum contribution by employee	$ 3,000
Employee contribution maximum rate	60.00%

XML

Quarterly Summary Quarterly Summary (Schedule of Quarterly Financial Information) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Oct. 27, 2012	Jul. 28, 2012	Apr. 28, 2012	Jan. 28, 2012	Oct. 29, 2011	Jul. 30, 2011	Apr. 30, 2011	Jan. 29, 2011	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Selected Quarterly Financial Information
Net revenues	$ 578,357	$ 555,332	$ 543,439	$ 560,642	$ 550,472	$ 502,850	$ 548,364	$ 545,756	$ 2,237,770	$ 2,147,442	$ 2,091,153
Gross margin	360,690	340,478	337,082	344,769	327,515	306,527	328,609	320,883	1,383,019	1,283,534	1,231,120
Income from operations	86,320	70,221	51,769	69,419	54,697	34,222	46,197	42,404	277,729	177,520	207,831
Net income (loss)	$ 54,001	$ 43,300	$ 39,296	$ 58,584	$ (4,324)	$ 1,937	$ 26,079	$ 26,918	$ 195,181	$ 50,610	$ 116,523
Net income per share - basic (dollars per share)	$ 0.12	$ 0.09	$ 0.09	$ 0.13	$ (0.01)	$ 0.00	$ 0.06	$ 0.06	$ 0.43	$ 0.11	$ 0.26
Net income per share - diluted (dollars per share)	$ 0.11	$ 0.09	$ 0.08	$ 0.12	$ (0.01)	$ 0.00	$ 0.05	$ 0.05	$ 0.41	$ 0.10	$ 0.24
Shares used in per share calculation - basic	459,333	457,147	457,541	452,494	474,975	483,744	473,209	465,108	456,629	474,259	446,996
Shares used in per share calculation - diluted	474,213	469,571	476,848	468,738	474,975	509,548	501,511	491,166	472,343	497,030	482,741
Closing Price Per Share High	$ 6.39	$ 5.55	$ 6.12	$ 5.93	$ 5.39	$ 7.11	$ 6.45	$ 6.41
Closing Price Per Share Low	$ 4.92	$ 4.41	$ 5.24	$ 4.17	$ 3.22	$ 5.48	$ 5.64	$ 4.97

XML

Quarterly Summary Quarterly Summary (Tables)

12 Months Ended

Oct. 27, 2012

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

BROCADE COMMUNICATIONS SYSTEMS, INC. QUARTERLY SUMMARY (Unaudited)
	Three Months Ended
	October 27, 2012		July 28, 2012		April 28, 2012		January 28, 2012		October 29, 2011			July 30, 2011		April 30, 2011		January 29, 2011
	(In thousands, except per share and stock price amounts)
Quarterly Data:
Net revenues	$	578,357	$	555,332	$	543,439	$	560,642	$	550,472		$	502,850	$	548,364	$	545,756
Gross margin	$	360,690	$	340,478	$	337,082	$	344,769	$	327,515		$	306,527	$	328,609	$	320,883
Income from operations	$	86,320	$	70,221	$	51,769	$	69,419	$	54,697		$	34,222	$	46,197	$	42,404
Net income (loss)	$	54,001	$	43,300	$	39,296	$	58,584	$	(4,324	)	$	1,937	$	26,079	$	26,918
Per share amounts:
Basic	$	0.12	$	0.09	$	0.09	$	0.13	$	(0.01	)	$	—	$	0.06	$	0.06
Diluted	$	0.11	$	0.09	$	0.08	$	0.12	$	(0.01	)	$	—	$	0.05	$	0.05
Shares used in computing per share amounts:
Basic	459,333		457,147		457,541		452,494		474,975			483,744		473,209		465,108
Diluted	474,213		469,571		476,848		468,738		474,975			509,548		501,511		491,166
Closing prices:
High	$	6.39	$	5.55	$	6.12	$	5.93	$	5.39		$	7.11	$	6.45	$	6.41
Low	$	4.92	$	4.41	$	5.24	$	4.17	$	3.22		$	5.48	$	5.64	$	4.97

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Goodwill And Intangible Assets (Tables)

12 Months Ended

Oct. 27, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule Of Goodwill Activity By Reportable Segment

The following table summarizes goodwill activity by reportable segment during the fiscal years ended October 27, 2012 and October 29, 2011 (in thousands):

	SAN Products			IP Networking Products			Global Services			Total
Balance at October 30, 2010
Goodwill	$	176,989		$	1,356,704		$	157,089		$	1,690,782
Accumulated impairment losses	—			(45,832		)	—			(45,832		)
	176,989			1,310,872			157,089			1,644,950
Goodwill disposed (1)	—			—			(1,673		)	(1,673		)
Tax and other adjustments (2)	(21		)	(12,289		)	—			(12,310		)
Balance at October 29, 2011
Goodwill	176,968			1,344,415			155,416			1,676,799
Accumulated impairment losses	—			(45,832		)	—			(45,832		)
	176,968			1,298,583			155,416			1,630,967
Tax and other adjustments (2)	(12		)	(6,866		)	—			(6,878		)
Balance at October 27, 2012
Goodwill	176,956			1,337,549			155,416			1,669,921
Accumulated impairment losses	—			(45,832		)	—			(45,832		)
	$	176,956		$	1,291,717		$	155,416		$	1,624,089

(1) Goodwill disposed relates to sale of Strategic Business Systems, Inc. (“SBS”), a wholly owned subsidiary, see Note 17, “Loss on Sale of Subsidiary,” of the Notes to Consolidated Financial Statements.

(2) The goodwill adjustments were primarily a result of tax benefit from the exercise of stock awards of acquired companies.

Schedule Of Company's Intangible Assets

The following tables present details of the Company’s intangible assets (in thousands, except for weighted-average remaining useful life):

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Weighted- Average Remaining Useful Life (in years)
October 27, 2012
Trade name	$	10,441	$	10,438	$	3	0.17
Core/developed technology	337,858		292,083		45,775		1.14
Customer relationships	352,581		289,094		63,487		1.16
Total intangible assets	$	700,880	$	591,615	$	109,265	1.16

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Weighted- Average Remaining Useful Life (in years)
October 29, 2011
Trade name	$	10,441	$	10,422	$	19	1.17
Core/developed technology	337,858		245,855		92,003		2.04
Customer relationships	352,581		229,906		122,675		2.12
Total intangible assets	$	700,880	$	486,183	$	214,697	2.08

Schedule Of Amortization Of Intangible Assets Included On Consolidated Statements Of Operations

The following table presents the amortization of intangible assets included on the Consolidated Statements of Operations (in thousands):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Cost of revenues	$	46,229	$	57,489	$	61,249
Operating expenses	$	59,204	$	60,713	$	65,623
Total	$	105,433	$	118,202	$	126,872

Schedule Of Estimated Future Amortization Of Intangible Assets

The following table presents the estimated future amortization of intangible assets as of October 27, 2012 (in thousands):

Fiscal Year	Estimated Future Amortization
2013	$	93,109
2014	16,156
Total	$	109,265

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Stock-Based Compensation Stock-Based Compensation (Schedule Of Equity Compensation Plans) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	Oct. 27, 2012		Oct. 29, 2011	Oct. 30, 2010	Oct. 31, 2009
Stock options
Share-based Compensation Arrangement by Share-based Payment Award
Number of securities to be Issued upon exercise of outstanding options, warrants and rights	29,497		50,765	71,666	89,647
Weighted-average exercise price of options outstanding	$ 5.43		$ 4.91	$ 4.82	$ 5.04
Number of securities remaining available for future issuance under equity compensation plans	76,048
Equity Compensation Plans Approved By Stockholders [Member]
Share-based Compensation Arrangement by Share-based Payment Award
Number of securities to be Issued upon exercise of outstanding options, warrants and rights	23,561	[1],[2]
Weighted-average exercise price of options outstanding	$ 5.52	[2]
Number of securities remaining available for future issuance under equity compensation plans	76,048	[2],[3]
Equity Compensation Plans Not Approved By Stockholders [Member]
Share-based Compensation Arrangement by Share-based Payment Award
Number of securities to be Issued upon exercise of outstanding options, warrants and rights	5,936	[4],[5]
Weighted-average exercise price of options outstanding	$ 5.06	[5]
Number of securities remaining available for future issuance under equity compensation plans	0	[5]

[1] Amount excludes purchase rights accrued under the 2009 ESPP. As of October 27, 2012, the 2009 ESPP had a stockholder-approved reserve of 65.0 million shares, of which 38.7 million shares were available for future issuance.

[2] Primarily consist of the 2009 ESPP, the 2009 and 1999 Director Plans and the 2009 and 1999 Stock Plans.

[3] Amount consists of shares available for future issuance under the 2009 ESPP, the 2009 Director Plan and the 2009 Stock Plan.

[4] Substantially all shares were granted prior to the fiscal year ended October 25, 2003. Information relating to equity compensation plans is set forth in Note 11, “Employee Compensation Plans,” of the Notes to Consolidated Financial Statements.

[5] Consist solely of the 1999 NSO Plan described in Note 11, “Employee Compensation Plans,” of the Notes to Consolidated Financial Statements and Foundry’s 2000 NSO Plan, which was assumed in connection with our acquisition of Foundry.

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Commitments And Contingencies (Loss Contingency Narrative) (Details)	12 Months Ended			12 Months Ended
	Oct. 27, 2012 Enterasys [Member] patents	Aug. 28, 2007 Enterasys [Member] patents	Jun. 21, 2005 Enterasys [Member] patents	Oct. 27, 2012 A10 Networks [Member] patents	Sep. 09, 2011 A10 Networks [Member] patents
Loss Contingencies [Line Items]
Number of alleged patents infringed and seeking injunctive relief			6		2
Number of patents filed for reexamination		5
Number of patent claims determined invalid and received final rejections		2
Number of patents dropped from the litigation, previously appealed				1
Number of patents remaining at issue in the litigation	4			1

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Income Taxes Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details)	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation
U.S. federal statutory income tax rate	35.00%	35.00%	35.00%
State taxes, net of federal tax benefit	3.80%	3.30%	4.00%
Foreign income taxed at other than U.S. rates	(17.70%)	(48.20%)	(32.60%)
Stock-based compensation	3.50%	11.80%	12.60%
Research and development credit	(3.50%)	(17.60%)	(10.40%)
Permanent items	0.30%	1.20%	0.90%
Change in liabilities for uncertain tax positions	(6.50%)	2.50%	(29.00%)
Repatriation from offshore operations	0.00%	62.60%	0.00%
Audit settlement and reinstated tax credit	(2.90%)	(11.70%)	10.20%
Other	1.00%	(2.60%)	0.40%
Effective tax rate	13.00%	36.30%	(8.90%)

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Balance Sheet Details (Schedule of Property, Plant and Equipment) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 27, 2012		Oct. 29, 2011
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	$ 908,375		$ 850,656
Less: Accumulated depreciation and amortization	(389,435)	[1],[2]	(318,272)	[1],[2]
Total property and equipment, net	518,940		532,384
Computer equipment
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	17,953		19,310
Software
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	39,410		35,865
Engineering and other equipment
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	409,524		357,827
Furniture and fixtures
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	30,516	[1]	29,195	[1]
Leasehold improvements
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	26,306		23,793
Land and building
Property, Plant and Equipment, Net, by Type [Abstract]
Property and equipment, gross	$ 384,666	[3]	$ 384,666	[3]

[1] Furniture and fixtures and accumulated depreciation and amortization include the following amounts under leases as of October 27, 2012 and October 29, 2011 (in thousands): October 27, 2012 October 29, 2011Cost$10,613 $10,613Accumulated depreciation(3,647) (2,131)Total$6,966 $8,482

[2] The following table presents the depreciation of property and equipment included on the Consolidated Statements of Operations (in thousands): Fiscal Year Ended October 27, 2012 October 29, 2011 October 30, 2010Depreciation expense$86,785 $88,150 $72,765

[3] In connection with the purchase of the property located in San Jose, California, the Company obtained a four-year option to purchase a fourth unimproved approximate four acre parcel for a fixed price of approximately $26.0 million as well as a right of first offer to purchase this parcel. The Company elected to not exercise the option and it terminated in November 2011. As of October 27, 2012, the Company retained the right of first offer.

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Derivative Instruments And Hedging Activities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Maximum derivative instrument maturity period	1 year
Foreign Currency Transaction [Abstract]
Foreign currency transaction gains (losses)	$ 1.5	$ 0.6	$ 6.6
Derivatives Designated As Hedging Instruments | Prepaid Expense And Other Current Asset
Derivative Instruments, Gain (Loss)
Gross unrealized gain positions	2.9
Derivatives Designated As Hedging Instruments | Other Accrued Liabilities
Derivative Instruments, Gain (Loss)
Gross unrealized loss positions	$ (0.3)

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Stock-Based Compensation Stock-Based Compensation (Narrative) (Details) (USD $)	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
2009 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award
Shares authorized for issuance under plan	65,000,000
Shares available for issuance under plan	38,700,000
Discount from Market Price At Offering Date	85.00%
Maximum payroll deductions	15.00%
Plan Offering Period	24 months
Plan Purchase Period	6 months
Stock options
Share-based Compensation Arrangement by Share-based Payment Award
Shares available for issuance under plan	76,048,000
Options granted subject to variable accounting	98,800,000
Options outstanding under variable accounting	100,000
Options under variable accounting, weighted-average exercise price	$ 4.85
Options under variable accounting, weighted-average contractual life, years	0.41
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award
Award vesting period (years), minimum	1
Award vesting period (years), maximum	4
RSUs, Nonvested, Aggregate intrinsic value	$ 106,100,000	$ 105,900,000	$ 178,900,000

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Stock-Based Compensation (Stock-Based Compensation Expense By Grant Type) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Share-based Compensation Arrangement by Share-based Payment Award
Total stock-based compensation	$ 77,169	$ 83,076	$ 101,625
Stock options
Share-based Compensation Arrangement by Share-based Payment Award
Total stock-based compensation	1,079	3,483	12,383
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award
Total stock-based compensation	56,791	55,750	55,580
Employee stock purchase plan
Share-based Compensation Arrangement by Share-based Payment Award
Total stock-based compensation	$ 19,299	$ 23,843	$ 33,662

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Income Taxes Income Taxes (Schedule of Income before Income Tax, Domestic and Foreign) (Details) (USD $)	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011		Oct. 30, 2010
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract]
United States	$ 115,736,000	$ (42,118,000)	[1]	$ 36,015,000
International	108,665,000	121,546,000	[1]	70,955,000
Income (loss) before income tax	224,401,000	79,428,000		106,970,000
Repatriation from offshore operations excluded from income before income taxes		$ 200,000,000

[1] Excludes the impact of repatriation of $200 million from offshore operations to the United States.

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Derivative Instruments And Hedging Activities (Schedule Of Total Gross Notional Amounts, Presented By Currency) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 27, 2012	Oct. 29, 2011
Derivatives Designated As Hedging Instruments
Derivative
Total gross notional amounts, presented by currency	$ 105,171	$ 130,370
Derivatives Designated As Hedging Instruments | Euro
Derivative
Total gross notional amounts, presented by currency	43,357	57,935
Derivatives Designated As Hedging Instruments | British Pound
Derivative
Total gross notional amounts, presented by currency	20,499	25,282
Derivatives Designated As Hedging Instruments | India Rupee
Derivative
Total gross notional amounts, presented by currency	16,046	0
Derivatives Designated As Hedging Instruments | Singapore Dollar
Derivative
Total gross notional amounts, presented by currency	12,918	16,136
Derivatives Designated As Hedging Instruments | Swiss Franc
Derivative
Total gross notional amounts, presented by currency	8,575	13,060
Derivatives Designated As Hedging Instruments | Japanese Yen
Derivative
Total gross notional amounts, presented by currency	3,776	17,957
Derivatives Not Designated As Hedging Instruments
Derivative
Total gross notional amounts, presented by currency	12,068	5,012
Derivatives Not Designated As Hedging Instruments | Euro
Derivative
Total gross notional amounts, presented by currency	0	0
Derivatives Not Designated As Hedging Instruments | British Pound
Derivative
Total gross notional amounts, presented by currency	0	0
Derivatives Not Designated As Hedging Instruments | India Rupee
Derivative
Total gross notional amounts, presented by currency	0	0
Derivatives Not Designated As Hedging Instruments | Singapore Dollar
Derivative
Total gross notional amounts, presented by currency	0	0
Derivatives Not Designated As Hedging Instruments | Swiss Franc
Derivative
Total gross notional amounts, presented by currency	0	5,012
Derivatives Not Designated As Hedging Instruments | Japanese Yen
Derivative
Total gross notional amounts, presented by currency	$ 12,068	$ 0

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Commitments And Contingencies (Schedule Of Accrued Liability For Estimated Future Warranty Costs) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011
Product Warranty Activity
Beginning balance	$ 11,298	$ 5,980
Liabilities accrued for warranties issued during the period	5,929	8,388
Warranty claims paid and used during the period	(575)	(1,394)
Changes in liability for pre-existing warranties during the period	(2,199)	(1,676)
Ending balance	$ 14,453	$ 11,298

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Subsequent Events

12 Months Ended

Oct. 27, 2012

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On November 6, 2012, California voters approved California Proposition 39 which revised certain provisions of the California State Tax Code, requiring mandatory single sales factor apportionment in California for most multi-state taxpayers for tax years beginning on or after January 1, 2013. Brocade currently expects that in fiscal year 2013 and beyond, Brocade's income subject to tax in California will be lower than under prior tax law and that Brocade's California deferred tax assets are, therefore, less likely to be realized. As a result, during the first quarter of fiscal year 2013, Brocade will record a charge of up to $78.0 million to reduce its previously recognized California deferred tax assets. This charge will not impact cash tax outlays and conformance to the new California apportionment rules is not expected to have a material impact on Brocade's future tax provision.

On November 9, 2012, Brocade paid $45.0 million and completed its acquisition of Vyatta Inc. (“Vyatta”), the developer of software-based network operating system that is relevant for multiple applications in network virtualization, software-defined networking (“SDN”) and private/public cloud computing platforms, which became a wholly owned subsidiary of Brocade. This acquisition complements Brocade investments in Ethernet fabrics and SDN, and enables Brocade to pursue new market opportunities in data center virtualization, public cloud, enterprise virtual private cloud, and managed services. Due to the limited time since the acquisition date, the initial accounting and purchase price allocation for this acquisition is incomplete as of December 14, 2012. Brocade does not consider the acquisition of Vyatta to be material to its results of operations and is therefore not presenting pro-forma financial information of combined operations.

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Goodwill And Intangible Assets (Schedule Of Goodwill Activity By Reportable Segment) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012		Oct. 29, 2011
Goodwill [Roll Forward]
Goodwill, Gross, Beginning Balance	$ 1,676,799		$ 1,690,782
Accumulated impairment losses, Beginning Balance	(45,832)		(45,832)
Goodwill, Net, Beginning Balance	1,630,967		1,644,950
Goodwill, Disposed			(1,673)	[1]
Goodwill, Tax and other adjustments	(6,878)	[2]	(12,310)	[2]
Goodwill, Gross, Ending Balance	1,669,921		1,676,799
Accumulated impairment losses, Ending Balance	(45,832)		(45,832)
Goodwill, Net, Ending Balance	1,624,089		1,630,967
SAN Products
Goodwill [Roll Forward]
Goodwill, Gross, Beginning Balance	176,968		176,989
Accumulated impairment losses, Beginning Balance	0		0
Goodwill, Net, Beginning Balance	176,968		176,989
Goodwill, Disposed			0	[1]
Goodwill, Tax and other adjustments	(12)	[2]	(21)	[2]
Goodwill, Gross, Ending Balance	176,956		176,968
Accumulated impairment losses, Ending Balance	0		0
Goodwill, Net, Ending Balance	176,956		176,968
IP Networking Products
Goodwill [Roll Forward]
Goodwill, Gross, Beginning Balance	1,344,415		1,356,704
Accumulated impairment losses, Beginning Balance	(45,832)		(45,832)
Goodwill, Net, Beginning Balance	1,298,583		1,310,872
Goodwill, Disposed			0	[1]
Goodwill, Tax and other adjustments	(6,866)	[2]	(12,289)	[2]
Goodwill, Gross, Ending Balance	1,337,549		1,344,415
Accumulated impairment losses, Ending Balance	(45,832)		(45,832)
Goodwill, Net, Ending Balance	1,291,717		1,298,583
Global Services
Goodwill [Roll Forward]
Goodwill, Gross, Beginning Balance	155,416		157,089
Accumulated impairment losses, Beginning Balance	0		0
Goodwill, Net, Beginning Balance	155,416		157,089
Goodwill, Disposed			(1,673)	[1]
Goodwill, Tax and other adjustments	0	[2]	0	[2]
Goodwill, Gross, Ending Balance	155,416		155,416
Accumulated impairment losses, Ending Balance	0		0
Goodwill, Net, Ending Balance	$ 155,416		$ 155,416

[1] Goodwill disposed relates to sale of Strategic Business Systems, Inc. (“SBS”), a wholly owned subsidiary, see Note 17, “Loss on Sale of Subsidiary,” of the Notes to Consolidated Financial Statements.

[2] The goodwill adjustments were primarily a result of tax benefit from the exercise of stock awards of acquired companies.

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Income Taxes Income Taxes (Tables)

12 Months Ended

Oct. 27, 2012

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

The domestic and international components of income (loss) before provision for (benefit from) income taxes for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 are presented as follows (in thousands):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011 (1)			October 30, 2010
United States	$	115,736	$	(42,118	)	$	36,015
International	108,665		121,546			70,955
Total	$	224,401	$	79,428		$	106,970

(1) Excludes the impact of repatriation of $200 million from offshore operations to the United States.

Schedule of Components of Income Tax Expense (Benefit)

The income tax provision (benefit) for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 consisted of the following (in thousands):

	Fiscal Year Ended
	October 27, 2012			October 29, 2011			October 30, 2010
U.S. federal taxes:
Current	$	(11,750	)	$	774		$	(30,768	)
Deferred	33,981			28,111			19,390
Total U.S. federal taxes	22,231			28,885			(11,378		)
State taxes:
Current	613			1,250			4,282
Deferred	(2,412		)	(9,187		)	(10,506		)
Total state taxes	(1,799		)	(7,937		)	(6,224		)
Non-U.S. taxes:
Current	8,770			7,854			8,964
Deferred	18			16			(915		)
Total non-U.S. taxes	8,788			7,870			8,049
Total	$	29,220		$	28,818		$	(9,553	)

Schedule of Effective Income Tax Rate Reconciliation

The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 consisted of the following:

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
U.S. federal statutory income tax rate	35.0	%	35.0	%	35.0	%
State taxes, net of federal tax benefit	3.8		3.3		4.0
Foreign income taxed at other than U.S. rates	(17.7	)	(48.2	)	(32.6	)
Stock-based compensation	3.5		11.8		12.6
Research and development credit	(3.5	)	(17.6	)	(10.4	)
Permanent items	0.3		1.2		0.9
Change in liabilities for uncertain tax positions	(6.5	)	2.5		(29.0	)
Repatriation from offshore operations	—		62.6		—
Audit settlement and reinstated tax credit	(2.9	)	(11.7	)	10.2
Other	1.0		(2.6	)	0.4
Effective tax rate	13.0	%	36.3	%	(8.9	)%

Schedule of Deferred Tax Assets and Liabilities

The components of deferred tax assets and deferred tax liabilities for the years ended October 27, 2012 and October 29, 2011 are presented as follows (in thousands):

	October 27, 2012			October 29, 2011
Net operating loss carry forwards	$	63,750		$	132,765
Stock-based compensation expense	22,582			28,886
Tax credit carry forwards	145,688			141,209
Reserves and accruals	94,755			104,135
Capitalized research and development expenditures	3,232			8,475
Net unrealized losses on investments	468			330
Gross deferred tax assets	330,475			415,800
Less: Valuation allowance	(22,269		)	(22,566		)
Total deferred tax assets	308,206			393,234
Acquired intangibles and goodwill	(50,266		)	(92,481		)
Fixed assets	(28,110		)	(34,992		)
Other	(2,116		)	(2,129		)
Total deferred tax liabilities	(80,492		)	(129,602		)
Total net deferred tax assets	$	227,714		$	263,632

Summary of Income Tax Contingencies

A reconciliation of the beginning and ending amount of total gross unrecognized tax benefits, excluding accrued net interest and penalties, is as follows (in thousands):

	October 27, 2012			October 29, 2011
Unrecognized tax benefits, beginning balance	$	149,430		$	136,812
Gross increases for tax positions taken in prior periods	797			9,066
Gross decreases for tax positions taken in prior periods	(26,001		)	(1,730		)
Gross increases for tax positions taken in current period	6,633			9,601
Changes due to settlements with taxing authorities	(6,771		)	(1,051		)
Reductions resulting from lapses of statutes of limitations	(4,835		)	(3,268		)
Unrecognized tax benefits, ending balance	$	119,253		$	149,430

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Derivative Instruments And Hedging Activities (Schedule Of Net Gains (Losses) Related To The Effective Portion Of Foreign Currency Derivatives) (Details) (Foreign Exchange Contract, USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Derivative Instruments, Gain (Loss)
Net gains (losses) related to the effective portion of foreign currency derivatives	$ (8,351)	$ 7,292	$ (5,285)
Cost of revenues
Derivative Instruments, Gain (Loss)
Net gains (losses) related to the effective portion of foreign currency derivatives	(1,043)	882	0
Research and development
Derivative Instruments, Gain (Loss)
Net gains (losses) related to the effective portion of foreign currency derivatives	(1,094)	496	0
Sales and marketing
Derivative Instruments, Gain (Loss)
Net gains (losses) related to the effective portion of foreign currency derivatives	(5,704)	5,498	0
General and administrative
Derivative Instruments, Gain (Loss)
Net gains (losses) related to the effective portion of foreign currency derivatives	(510)	416	0
Other expenses
Derivative Instruments, Gain (Loss)
Net gains (losses) related to the effective portion of foreign currency derivatives	$ 0	$ 0	$ (5,285)

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Sale-Leaseback Transaction Sale-Leaseback Transaction (Narrative) (Details) (Owned real estate property, USD $) In Millions, unless otherwise specified	12 Months Ended
	Oct. 30, 2010
Owned real estate property
Sale Leaseback Transaction
Sale leaseback transaction, Net proceeds	$ 30.2
Sale leaseback transaction, Lease terms	lease the property back from the purchaser over a minimum lease term of two years
Sale leaseback transaction, Current period loss recognized	$ 8.7

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Fair Value Measurements (Tables)

12 Months Ended

Oct. 27, 2012

Fair Value Disclosures [Abstract]

Schedule Of Assets And Liabilities Measured At Fair Value

Assets and liabilities measured at fair value on a recurring basis as of October 27, 2012 were as follows (in thousands):

			Fair Value Measurements Using
	Balance as of October 27, 2012		Quoted Prices in Active Markets For Identical Instruments (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds (1)	$	308,960	$	308,960	$	—	$	—
Derivative assets	2,941		—		2,941		—
Total assets measured at fair value	$	311,901	$	308,960	$	2,941	$	—
Liabilities:
Derivative liabilities	$	296	$	—	$	296	$	—
Total liabilities measured at fair value	$	296	$	—	$	296	$	—

(1) Money market funds are reported within “Cash and cash equivalents” on the Consolidated Balance Sheets.

Assets and liabilities measured at fair value on a recurring basis as of October 29, 2011 were as follows (in thousands):

			Fair Value Measurements Using
	Balance as of October 29, 2011		Quoted Prices in Active Markets For Identical Instruments (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds (1)	$	138,959	$	138,959	$	—	$	—
Corporate bonds	774		—		774		—
Derivative assets	$	1,368	$	—	$	1,368	$	—
Total assets measured at fair value	$	141,101	$	138,959	$	2,142	$	—
Liabilities:
Derivative liabilities	$	1,790	$	—	$	1,790	$	—
Total liabilities measured at fair value	$	1,790	$	—	$	1,790	$	—

(1) Money market funds are reported within “Cash and cash equivalents” on the Consolidated Balance Sheets.

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Goodwill And Intangible Assets (Schedule Of Amortization Of Intangible Assets Included On Consolidated Statements Of Operations) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Finite-Lived Intangible Assets [Abstract]
Cost of revenues	$ 46,229	$ 57,489	$ 61,249
Operating expenses	59,204	60,713	65,623
Total	$ 105,433	$ 118,202	$ 126,872

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Commitments And Contingencies Commitments And Contingencies (Leases Narrative) (Details) (USD $) In Millions, unless otherwise specified	Oct. 27, 2012
Commitments and Contingencies Disclosure [Abstract]
Letters of Credit Outstanding, Amount	$ 0.2

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Investments Investments (Available-for-sale Securities) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 27, 2012	Oct. 29, 2011
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 0	$ 774
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair value	$ 0	$ 774

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Summary Of Significant Accounting Policies Summary Of Significant Accounting Policies (Property and Equipment Narrative) (Details)	12 Months Ended
	Oct. 27, 2012 years
Computer equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life, Maximum	3
Software
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life, Minimum	4
Property, Plant and Equipment, Useful Life, Maximum	7
Engineering and other equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life, Maximum	4
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life, Maximum	7
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life, Maximum	10
Building and Building Improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life, Maximum	39

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Goodwill And Intangible Assets

12 Months Ended

Oct. 27, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill And Intangible Assets

Goodwill and Intangible Assets

The following table summarizes goodwill activity by reportable segment during the fiscal years ended October 27, 2012 and October 29, 2011 (in thousands):

	SAN Products			IP Networking Products			Global Services			Total
Balance at October 30, 2010
Goodwill	$	176,989		$	1,356,704		$	157,089		$	1,690,782
Accumulated impairment losses	—			(45,832		)	—			(45,832		)
	176,989			1,310,872			157,089			1,644,950
Goodwill disposed (1)	—			—			(1,673		)	(1,673		)
Tax and other adjustments (2)	(21		)	(12,289		)	—			(12,310		)
Balance at October 29, 2011
Goodwill	176,968			1,344,415			155,416			1,676,799
Accumulated impairment losses	—			(45,832		)	—			(45,832		)
	176,968			1,298,583			155,416			1,630,967
Tax and other adjustments (2)	(12		)	(6,866		)	—			(6,878		)
Balance at October 27, 2012
Goodwill	176,956			1,337,549			155,416			1,669,921
Accumulated impairment losses	—			(45,832		)	—			(45,832		)
	$	176,956		$	1,291,717		$	155,416		$	1,624,089

(1) Goodwill disposed relates to sale of Strategic Business Systems, Inc. (“SBS”), a wholly owned subsidiary, see Note 17, “Loss on Sale of Subsidiary,” of the Notes to Consolidated Financial Statements.

(2) The goodwill adjustments were primarily a result of tax benefit from the exercise of stock awards of acquired companies.

The Company conducts its goodwill impairment test annually, as of the first day of the second fiscal quarter, and whenever events or changes in facts and circumstances indicate that the fair value of the reporting unit may be less than its carrying amount. For the annual goodwill impairment test, the Company uses the income approach, the market approach, or a combination thereof, to determine each reporting unit’s fair value. The income approach provides an estimate of fair value based on discounted expected future cash flows (“DCF”). The market approach provides an estimate of fair value using various prices or market multiples applied to the reporting unit’s operating results and then applying an appropriate control premium. For the fiscal year 2012 annual goodwill impairment test, the Company used a combination of approaches to estimate each reporting unit’s fair value. The Company believed that at the time of impairment testing performed in the second fiscal quarter of 2012, the income approach and the market approach were equally representative of a reporting unit’s fair value.

Determining the fair value of a reporting unit or an intangible asset requires judgment and involves the use of significant estimates and assumptions. The Company based its fair value estimates on assumptions it believes to be reasonable, but inherently uncertain. Estimates and assumptions with respect to the determination of the fair value of its reporting units using the income approach include, among other inputs:

• The Company’s operating forecasts;

• Revenue growth rates; and

• Risk-commensurate discount rates and costs of capital.

The Company’s estimates of revenues and costs are based on historical data, various internal estimates and a variety of external sources, and are developed as part of our regular long-range planning process. The control premium used in market or combined approaches is determined by considering control premiums offered as part of the acquisitions that have occurred in the reporting units’ comparable market segments. Based on the results of the annual goodwill impairment analysis performed during the second fiscal quarter of 2012, the Company determined that no impairment needed to be recorded. During the fiscal year ended October 27, 2012, there were no facts and circumstances that indicated that the fair value of the reporting units may be less than their current carrying amount.

Intangible assets other than goodwill are amortized over the following estimated remaining useful lives, unless the Company has determined these lives to be indefinite. The following tables present details of the Company’s intangible assets (in thousands, except for weighted-average remaining useful life):

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Weighted- Average Remaining Useful Life (in years)
October 27, 2012
Trade name	$	10,441	$	10,438	$	3	0.17
Core/developed technology	337,858		292,083		45,775		1.14
Customer relationships	352,581		289,094		63,487		1.16
Total intangible assets	$	700,880	$	591,615	$	109,265	1.16

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Weighted- Average Remaining Useful Life (in years)
October 29, 2011
Trade name	$	10,441	$	10,422	$	19	1.17
Core/developed technology	337,858		245,855		92,003		2.04
Customer relationships	352,581		229,906		122,675		2.12
Total intangible assets	$	700,880	$	486,183	$	214,697	2.08

The following table presents the amortization of intangible assets included on the Consolidated Statements of Operations (in thousands):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Cost of revenues	$	46,229	$	57,489	$	61,249
Operating expenses	$	59,204	$	60,713	$	65,623
Total	$	105,433	$	118,202	$	126,872

The following table presents the estimated future amortization of intangible assets as of October 27, 2012 (in thousands):

Fiscal Year	Estimated Future Amortization
2013	$	93,109
2014	16,156
Total	$	109,265

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Investments Investments (Details) (USD $) In Millions, unless otherwise specified	Oct. 27, 2012	Oct. 29, 2011
Investments, All Other Investments [Abstract]
Cost-method Investments, Aggregate Carrying Amount	$ 7.0	$ 7.0

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Segment Information (Tables)

12 Months Ended

Oct. 27, 2012

Segment Reporting [Abstract]

Schedule Of Financial Information By Reportable Segment

Summarized financial information by reportable segment for the years ended October 27, 2012, October 29, 2011 and October 30, 2010, based on the internal management reporting system, is as follows (in thousands):

	SAN Products		IP Networking Products		Global Services		Total
Fiscal Year Ended October 27, 2012
Net revenues	$	1,356,099	$	534,757	$	346,914	$	2,237,770
Cost of revenues	362,608		327,248		164,895		854,751
Gross margin	$	993,491	$	207,509	$	182,019	$	1,383,019
Fiscal Year Ended October 29, 2011
Net revenues	$	1,237,994	$	551,820	$	357,628	$	2,147,442
Cost of revenues	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	394,506		288,980		176,547		860,033
Gross margin	$	846,120	$	199,208	$	185,792	$	1,231,120

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas

Geographic revenue and property and equipment information for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 is presented below (in thousands):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Net revenues:
United States	$	1,414,390	$	1,313,302	$	1,338,262
International
Europe, the Middle East and Africa (1)	493,979		502,999		482,707
Asia Pacific	186,244		212,636		173,243
Japan	99,887		75,542		58,914
Canada, Central and South America	43,270		42,963		38,027
Total international net revenues	823,380		834,140		752,891
Total net revenues	$	2,237,770	$	2,147,442	$	2,091,153

(1) Includes net revenues of $259.2 million, $257.5 million and $254.4 million for the years ended October 27, 2012, October 29, 2011 and October 30, 2010, respectively, relating to the Netherlands.

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Property and equipment, net:
United States	$	500,744	$	515,940	$	524,287
International	18,196		16,444		14,830
Total Property and equipment, net	$	518,940	$	532,384	$	539,117

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Summary Of Significant Accounting Policies Summary Of Significant Accounting Policies (Policies)

12 Months Ended

Oct. 27, 2012

Accounting Policies [Abstract]

Cash and Cash Equivalents, Policy

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents.

Investments and Equity Securities, Policy

Investments and Equity Securities

Investment securities with an original maturity of more than three months that mature less than one year from the Consolidated Balance Sheet date are considered short-term investments. Investment securities with an original or remaining maturity of one year or more and which the Company has the ability and intent to hold are considered long-term investments. Investments are classified as available-for-sale and are recorded on the accompanying Consolidated Balance Sheets at fair value.

Unrealized holding gains and losses related to the Company’s investments are included as a separate component of accumulated other comprehensive loss on the accompanying Consolidated Balance Sheets, net of any related tax effect. Realized gains and losses are calculated based on the specific identification method and are included in “Other expense, net” on the Consolidated Statements of Operations.

The Company recognizes an impairment charge when the fair values of its investments have fallen below their cost basis and the decline in fair value is assessed to be other-than-temporary. An other-than-temporary impairment is triggered when there is an intent to sell the security, it is more likely than not that the security will be required to be sold before recovery, or the Company is not expected to recover the entire amortized cost basis of the security. The Company also considers various factors in determining whether to recognize an impairment charge, including the length of time and extent to which the fair value has been less than the cost basis and the financial condition and near-term prospects of the issuer. For impairments involving credit losses, the Company recognizes the credit loss component in earnings and the remainder of the impairment is recorded in accumulated other comprehensive loss.

From time to time the Company makes equity investments in non-publicly traded companies. These investments are included in “Other assets” on the accompanying Consolidated Balance Sheets and are generally accounted for under the cost method as the Company does not have the ability to exercise significant influence over the respective issuer’s operating and financial policies nor does it have a liquidation preference that is substantive. The Company monitors its investments in non-publicly traded companies for impairment on a quarterly basis and makes appropriate reductions in carrying values when such impairments are determined to be other-than-temporary. Impairment charges are included in “Other expense, net” on the Consolidated Statements of Operations. Factors considered in determining an impairment include, but are not limited to, the current business environment including competition and uncertainty of financial condition, going concern considerations such as the rate at which the issuer company utilizes cash and the issuer company’s ability to obtain additional private financing to fulfill its stated business plan, the need for changes to the issuer company’s existing business model due to changing business environments and its ability to successfully implement necessary changes, and comparable valuations.

Fair Value of Financial Instruments, Policy

Fair Value of Financial Instruments

The fair value of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate cost because of their short maturities. The fair value of the Company’s investments is primarily determined using quoted market prices for those securities or similar financial instruments.

Derivative Financial Instruments, Policy

Derivative Financial Instruments

In the normal course of business, the Company is exposed to fluctuations in interest rates and the exchange rates associated with foreign currencies. The derivatives entered into by the Company qualify for and are designated as foreign currency cash flow hedges.

The derivatives are recognized on the Consolidated Balance Sheets at their respective fair values. Changes in fair values of outstanding cash flow hedges that are highly effective are recorded in accumulated other comprehensive loss until earnings are affected by the variability of cash flows of the underlying hedged transaction. In most cases, amounts recorded in accumulated other comprehensive loss will be released to earnings at maturity of the related derivative. The recognition of effective hedge results offsets the gains or losses on the underlying exposure. Cash flows from derivative transactions are classified according to the nature of the risk being hedged.

The Company formally documents all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking hedge transactions. This documentation includes linking all derivatives either to specific assets and liabilities on the consolidated balance sheets or specific firm commitments or forecasted transactions. The Company also formally assesses both at the hedge’s inception and on an ongoing basis whether the derivatives used in hedging transactions have been highly effective in offsetting changes in the cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods.

The Company discontinues hedge accounting prospectively when (i) the derivative is no longer highly effective in offsetting changes in the cash flows of a hedged item (including hedged items such as firm commitments or forecasted transactions); (ii) the derivative expires or is sold, terminated or exercised; (iii) it is no longer probable that the forecasted transaction will occur; or (iv) management determines that designating the derivative as a hedging instrument is no longer appropriate.

When the Company discontinues hedge accounting, but it continues to be probable that the forecasted transaction will occur in the originally expected period, the gain or loss on the derivative remains in accumulated other comprehensive loss and is reclassified into earnings when the forecasted transaction affects earnings. However, if it is no longer probable that a forecasted transaction will occur by the end of the originally specified time period or within an additional two-month period of time thereafter, the gain or loss that was in accumulated other comprehensive loss will be recognized immediately in earnings. In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the Company will carry the derivative at its fair value on the Consolidated Balance Sheet until maturity and will recognize future changes in the fair value in current period earnings. Any hedge ineffectiveness is recorded in current period earnings within “Other expenses.” Effectiveness is assessed based on the comparison of current forward rates to the rates established on the Company’s hedges.

Inventory, Policy

Inventories

Inventories are stated at the lower of cost or market, using the first-in, first-out method. Inventory costs include material, labor and overhead. The Company records inventory write-downs based on excess and obsolete inventory determined primarily by its forecast of future demand. A portion of the Company’s inventory is located offsite at customers, third party managed service depots and at contract manufacturers’ locations. Cash flows related to the sale of inventories are classified as cash flows from operating activities.

Property and Equipment, Policy

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. An estimated useful life of 3 years is used for computer equipment and 4 to 7 years is used for software based on the nature of the software purchased. Estimated useful lives of up to 4 years are used for engineering and other equipment, 7 years is used for furniture and an estimated useful life of 39 years is used for buildings. Leasehold improvements are amortized using the straight-line method over the shorter of 10 years or the remaining term of the lease.

Interest costs related to major construction projects are capitalized until the asset is ready for service. Capitalized interest is calculated by multiplying the weighted-average interest rate on the Company long-term debt by the qualifying construction costs. Interest capitalized may not exceed gross interest expense for the period. As the qualifying asset is moved to the depreciation and amortization pool, the related capitalized interest is also transferred and is amortized over the useful life of the related asset. Interest cost of $7.8 million was capitalized for the year ended October 30, 2010 specifically the Company campus project. No interest costs were capitalized during the years ended October 27, 2012 and October 29, 2011 since the construction of the Company campus project was completed in the third quarter of fiscal year 2010.

Brocade evaluates long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable in accordance with Accounting Standards Codification (“ASC”) 360-10 Property, Plant and Equipment. Brocade assesses the fair value of the assets based on the undiscounted future cash flow the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flow expected to result from the use of the asset plus net proceeds expected to result from the disposition of the asset, if any, are less than the carrying value of the asset. When Brocade identifies an impairment, Brocade reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values.

Goodwill and Intangible Assets, Policy

Goodwill and Intangible Assets

The Company evaluates goodwill on an annual basis during its second fiscal quarter or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized to the extent that the carrying amount of goodwill exceeds the asset’s implied fair value. Events which might indicate impairment include, but are not limited to, strategic decisions made in response to economic and competitive conditions, the impact of the economic environment on the Company’s customer base, material negative changes in relationships with significant customers, and/or a significant decline in the Company’s stock price for a sustained period.

Intangible assets are carried at cost less accumulated amortization. Amortization is recognized on a straight-line basis over the estimated useful life of the respective asset. The Company evaluates intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Examples of such events or circumstances include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of acquired assets or the strategy for the Company’s business, significant negative industry or economic trends, and/or a significant decline in the Company’s stock price for a sustained period. Impairment is recognized based on the difference between the fair value of the asset and its carrying value. For additional discussion, see Note 4, “Goodwill and Intangible Assets,” of the Notes to Consolidated Financial Statements.

Litigation Costs, Policy

Litigation Costs

The Company is subject to the possibility of legal actions arising in the ordinary course of business. The Company regularly monitors the status of pending legal actions to evaluate both the magnitude and likelihood of any potential losses. An accrual for these potential losses is made when they are probable and the amount of loss, or possible range of loss, can be reasonably estimated. Legal costs related to such potential losses are expensed as incurred. In addition, recoveries are shown as a reduction in litigation costs in the period in which they are realized.

Concentrations

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. Cash, cash equivalents and short-term investments are primarily maintained at five major financial institutions. Deposits held with banks may be redeemed upon demand and may exceed the amount of insurance provided on such deposits.

A majority of the Company’s accounts receivable balance is derived from sales to original equipment manufacturer (“OEM”) partners in the computer storage and server industry. As of October 27, 2012, three customers accounted for 16%, 12% and 10% respectively, of total accounts receivable, for a combined total of 38% of total accounts receivable. As of October 29, 2011, two customers accounted for 16% and 14%, respectively, of total accounts receivable, for a combined total of 30% of total accounts receivable. The Company performs ongoing credit evaluations of its customers and generally does not require collateral on accounts receivable balances. The Company has established reserves for credit losses, sales allowances, and other allowances.

For the years ended October 27, 2012, October 29, 2011 and October 30, 2010, the same three customers accounted for a combined total of 47% (EMC Corporation (“EMC”) with 16%, Hewlett-Packard Company (“HP”) with 13% and International Business Machines Corporation (“IBM”) with 18%), 43% (EMC with 15%, HP with 13% and IBM with 15%) and 47% (EMC with 16%, HP with 14% and IBM with 17%) of total net revenues, respectively.

The Company currently relies on single and limited sources for multiple key components used in the manufacture of its products. Additionally, the Company relies on multiple contract manufacturers for the production of its products, including Hon Hai Precision Industry Co., Ltd., Accton Wireless Broadband Corporation, Motorola, Inc. and Quanta Computer Incorporated (collectively the contract manufacturers or “CMs”). Although the Company uses standard parts and components for its products where possible, the Company’s CMs currently purchase, on their behalf, several key components used in the manufacture of products from single or limited supplier sources.

Revenue Recognition, Policy

Revenue Recognition

Product revenue. Substantially all of the Company’s products are integrated with software that is essential to the functionality of the equipment. Additionally, the Company provides unspecified software upgrades and enhancements related to the equipment through its maintenance contracts for most of its products. Product revenue is generally recognized when all of the following criteria have been met:

• Persuasive evidence of an arrangement exists;

• Delivery has occurred;

• The fee is fixed or determinable; and

• Collectability is reasonably assured.

For newly introduced products, many of the Company’s large OEM customers require a product qualification period during which the Company’s products are tested and approved by the OEM customers for sale to their customers. Revenue recognition and related cost are deferred for shipments to new OEM customers and for shipments of newly introduced products to existing OEM customers until satisfactory evidence of completion of the product qualification has been received from the OEM customer. In addition, revenue from sales to the Company’s distributor customers is recognized in the same period in which the product is actually sold by the distributor (sell-through).

The Company reduces revenue for estimated sales allowances at the time of shipment and sales programs at the later of revenue recognition or communication of the commitment for sales incentives. Sales allowances are estimated based on historical sales returns. Sales programs are estimated based on approved sales programs versus claims under such sales programs, current trends and the Company’s expectations regarding future activity. In addition, the Company maintains an allowance for doubtful accounts, which is also accounted for as a reduction in revenue. The Company establishes the allowance for doubtful accounts to ensure accounts receivables are not overstated due to uncollectability. The Company maintains bad debt reserves based upon the analysis of accounts receivable, historical collection patterns, customer concentrations, customer creditworthiness, current economic trends, changes in customer payment terms and practices, and customer communication. The Company records a specific reserve for individual accounts when it becomes aware of a customer’s likely inability to meet its financial obligations, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position. If circumstances related to customers change, the Company would further adjust estimates of the recoverability of receivables.

Multiple-element arrangements. The Company’s multiple-element product offerings include networking hardware with embedded software products and support, which are considered separate units of accounting. For certain of the Company’s products, software and non-software components function together to deliver the tangible products’ essential functionality.

The Company allocates revenue to each element in a multiple-element arrangement based upon their relative selling price. When applying the relative selling price method, the Company determines the selling price for each deliverable using vendor-specific objective evidence (“VSOE”) of selling price, if it exists, or third-party evidence (“TPE”) of selling price. If neither VSOE nor TPE of selling price exist for a deliverable, the Company uses its best estimate of selling price for that deliverable. Revenue allocated to each element is then recognized when the basic revenue recognition criteria are met for each element.

The Company determines VSOE based on its normal pricing and discounting practices for the specific product or service when sold separately. In determining VSOE, the Company requires that a substantial majority of the selling prices for a product or service fall within a reasonably narrow pricing range. For post-contract customer support (“PCS”), the Company considers stated renewal rates in determining VSOE.

In most instances, the Company is not able to establish VSOE for all deliverables in an arrangement with multiple elements. This may be due to the Company infrequently selling each element separately, not pricing products within a narrow range, or only having a limited sales history. When VSOE cannot be established, the Company attempts to establish selling price for each element based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, the Company’s go-to-market strategy differs from that of its peers and its offerings contain a significant level of customization and differentiation such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Company is unable to reliably determine what similar competitor products’ selling prices are on a stand-alone basis. Therefore, the Company is typically not able to determine TPE.

When the Company is unable to establish selling price using VSOE or TPE, the Company uses estimated selling price (“ESP”) in its allocation of the arrangement consideration. The objective of ESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. ESP is generally used for offerings that are not typically sold on a stand-alone basis or for new or highly customized offerings.

The Company determines ESP for a product by considering multiple factors including, but not limited to, geographies, market conditions, competitive landscape, internal costs, gross margin objectives and pricing practices. The determination of ESP is made through consultation with and formal approval by the Company’s management, taking into consideration the go-to-market strategy.

The Company regularly reviews VSOE, TPE and ESP and maintains internal controls over the establishment and updates of these estimates. There was no material impact on revenues during the fiscal year ended October 27, 2012 nor does the Company expect a material impact in the near term from changes in VSOE, TPE or ESP.

Services revenue. Services revenue consists of training and maintenance arrangements, including PCS and other professional services. PCS services are offered under renewable, annual fee-based contracts or as part of multiple-element arrangements, and typically include telephone support and upgrades and enhancements to the Company’s operating system software. Revenue related to PCS elements is deferred and recognized ratably over the contractual period. PCS contracts are typically one to three years in length.

Professional services are offered under hourly or fixed fee-based contracts. Professional services revenue is recognized as services are performed. Training revenue is recognized upon completion of the training.

Warranty Expense, Policy

Warranty Expense

The Company provides standard warranties on its products ranging from one year to limited lifetime warranties. Estimated future warranty costs are accrued at the time of shipment and charged to cost of revenues based upon historical experience, current trends and the Company’s expectations regarding future experience.

Foreign Currency, Policy

Foreign Currency

Assets and liabilities of the Company’s international subsidiaries in which the local currency is the functional currency are translated into U.S. dollars at period-end exchange rates. Income and expenses are translated into U.S. dollars at the average exchange rates during the period. The resulting translation adjustments are included in the Company’s Consolidated Balance Sheets in the stockholders’ equity section as a component of accumulated other comprehensive loss. Foreign exchange gains and losses for assets and liabilities of the Company’s international subsidiaries in which the local currency is the U.S. dollar are recorded in the Company’s Consolidated Statement of Operations.

Software to be Sold, Leased, or Otherwise Marketed, Policy

Eligible software development costs are capitalized upon the establishment of technological feasibility, which is defined as being equivalent to completion of a beta-phase working prototype. Total eligible software development costs have not been material to date.

Internal Use Software, Policy

Costs related to internally developed software and software purchased for internal use, primarily for implementation and upgrade of the Company’s enterprise wide integrated business information system, are capitalized and included in “Property and equipment, net.” These costs are being depreciated over the estimated useful lives of four to seven years based on the nature of the software purchased.

Advertising Costs, Policy

Advertising Costs

The Company expenses all advertising costs as incurred. Advertising costs were $17.7 million, $12.1 million and $7.9 million for the years ended October 27, 2012, October 29, 2011 and October 30, 2010, respectively.

Income Taxes, Policy

Income Taxes

The Company recognizes income tax expense for the amount of taxes payable or refundable for the current year. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts, along with net operating loss carry forwards and credit carry forwards. A valuation allowance is recognized to the extent that it is more likely than not that the tax benefits will not be realized.

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes. For additional discussion, see Note 13, “Income Taxes,” of the Notes to Consolidated Financial Statements.

Computation of Net Income (Loss) per Share, Policy

Computation of Net Income per Share

Basic net income per share is computed using the weighted-average number of common shares outstanding during the period, less shares subject to repurchase. Diluted net income per share is computed using the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period that have a dilutive effect on earnings per share. Potentially dilutive common shares result from the assumed exercise of outstanding stock options, assumed vesting of outstanding restricted stock units and awards and assumed issuance of stock under the employee stock purchase plan all using the treasury stock method, as well as the assumed conversion of outstanding convertible subordinated debt using the if-converted method.

Stock-Based Compensation, Policy

Stock-Based Compensation

The Company accounts for employee equity awards under the fair value method. Accordingly, the Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options and the Employee Stock Purchase Plan (“ESPP”) is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to restricted stock units is based on the fair value of the Company’s common stock on the date of the grant. The Company records stock-based compensation expense over the twenty-four month offering period in connection with shares issued under its ESPP. The compensation expense for stock-based awards is reduced by an estimate for forfeitures and is recognized over the expected term of the award under a graded vesting method, except for restricted stock units granted by the Company, which are recognized over the expected term of the award under a straight-line vesting method. For additional discussion, see Note 12, “Stock-Based Compensation,” of the Notes to Consolidated Financial Statements.

The Company accounts for the tax effects of share-based payment awards using the alternative transition method, which includes simplified methods to establish the beginning balance of the additional paid-in capital pool (“APIC Pool”) related to the tax effects of employee stock-based compensation and to determine the subsequent impact on the APIC Pool and consolidated statement of cash flows of the tax effects of employee stock-based compensation awards.

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Basis Of Presentation (Policies)

12 Months Ended

Oct. 27, 2012

Accounting Policies [Abstract]

Fiscal Period Policy

The fiscal year for the Company is the 52 or 53 weeks ending on the last Saturday in October. As is customary for companies that use the 52/53-week convention, every fifth year contains a 53-week year. Fiscal years 2012, 2011 and 2010 were 52-week fiscal years. The Company’s next 53-week fiscal year will be fiscal year 2014 and its next 14-week quarter will be in the second quarter of fiscal year 2014.

Consolidation Policy

The Consolidated Financial Statements include the accounts of Brocade and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates in Preparation of Consolidated Financial Statements

Use of Estimates in Preparation of Consolidated Financial Statements

The preparation of consolidated financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to sales allowances and programs, allowance for doubtful accounts, stock-based compensation, purchase price allocations, warranty obligations, inventory valuation and purchase commitments, restructuring costs, commissions, facilities lease losses, impairment of goodwill and intangible assets, litigation, income taxes and investments. Actual results may differ materially from these estimates.

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Guarantor And Non-Guarantor Subsidiaries (Schedule Of Consolidated Balance Sheet) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 27, 2012	Oct. 29, 2011
Condensed Financial Statements, Captions [Line Items]
Cash, cash equivalents and short-term investments	$ 713,226	$ 414,976
Accounts receivable, net	233,139	249,141
Inventories	68,179	74,172
Intercompany receivables	0	0
Other current assets	141,035	105,912
Total current assets	1,155,579	844,201
Property and equipment, net	518,940	532,384
Investment in subsidiaries	0	0
Other non-current assets	1,906,742	2,097,723
Total assets	3,581,261	3,474,308
Accounts payable	117,350	109,471
Current portion of long-term debt	1,977	40,539
Intercompany payables	0	0
Other current liabilities	491,141	415,977
Total current liabilities	610,468	565,987
Total long-term debt, net of current portion	599,203	748,904
Other non-current liabilities	135,770	145,279
Total liabilities	1,345,441	1,460,170
Total stockholders' equity	2,235,820	2,014,138
Total liabilities and stockholders' equity	3,581,261	3,474,308
Brocade Communications Systems, Inc. [Member]
Condensed Financial Statements, Captions [Line Items]
Cash, cash equivalents and short-term investments	284,466	101,367
Accounts receivable, net	150,367	157,839
Inventories	55,084	50,000
Intercompany receivables	0	0
Other current assets	124,690	87,495
Total current assets	614,607	396,701
Property and equipment, net	500,530	460,347
Investment in subsidiaries	871,157	1,285,356
Other non-current assets	1,814,729	1,506,086
Total assets	3,801,023	3,648,490
Accounts payable	92,661	85,700
Current portion of long-term debt	2,226	40,539
Intercompany payables	434,981	377,228
Other current liabilities	346,959	276,982
Total current liabilities	876,827	780,449
Total long-term debt, net of current portion	599,203	748,904
Other non-current liabilities	89,173	104,999
Total liabilities	1,565,203	1,634,352
Total stockholders' equity	2,235,820	2,014,138
Total liabilities and stockholders' equity	3,801,023	3,648,490
Subsidiary Guarantors [Member]
Condensed Financial Statements, Captions [Line Items]
Cash, cash equivalents and short-term investments	680	2,301
Accounts receivable, net	(1,847)	(2,149)
Inventories	0	0
Intercompany receivables	478,133	446,455
Other current assets	514	805
Total current assets	477,480	447,412
Property and equipment, net	213	55,594
Investment in subsidiaries	0	0
Other non-current assets	90,766	590,318
Total assets	568,459	1,093,324
Accounts payable	0	376
Current portion of long-term debt	(249)	0
Intercompany payables	0	0
Other current liabilities	7,628	17,261
Total current liabilities	7,379	17,637
Total long-term debt, net of current portion	0	0
Other non-current liabilities	2,429	580
Total liabilities	9,808	18,217
Total stockholders' equity	558,651	1,075,107
Total liabilities and stockholders' equity	568,459	1,093,324
Non-Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Cash, cash equivalents and short-term investments	428,080	311,308
Accounts receivable, net	84,619	93,451
Inventories	13,095	24,172
Intercompany receivables	0	0
Other current assets	15,606	15,609
Total current assets	541,400	444,540
Property and equipment, net	18,197	16,443
Investment in subsidiaries	0	0
Other non-current assets	1,247	1,319
Total assets	560,844	462,302
Accounts payable	24,689	23,395
Current portion of long-term debt	0	0
Intercompany payables	43,152	69,227
Other current liabilities	136,329	119,731
Total current liabilities	204,170	212,353
Total long-term debt, net of current portion	0	0
Other non-current liabilities	44,168	39,700
Total liabilities	248,338	252,053
Total stockholders' equity	312,506	210,249
Total liabilities and stockholders' equity	560,844	462,302
Consolidating Adjustments [Member]
Condensed Financial Statements, Captions [Line Items]
Cash, cash equivalents and short-term investments	0	0
Accounts receivable, net	0	0
Inventories	0	0
Intercompany receivables	(478,133)	(446,455)
Other current assets	225	2,003
Total current assets	(477,908)	(444,452)
Property and equipment, net	0	0
Investment in subsidiaries	(871,157)	(1,285,356)
Other non-current assets	0	0
Total assets	(1,349,065)	(1,729,808)
Accounts payable	0	0
Current portion of long-term debt	0	0
Intercompany payables	(478,133)	(446,455)
Other current liabilities	225	2,003
Total current liabilities	(477,908)	(444,452)
Total long-term debt, net of current portion	0	0
Other non-current liabilities	0	0
Total liabilities	(477,908)	(444,452)
Total stockholders' equity	(871,157)	(1,285,356)
Total liabilities and stockholders' equity	$ (1,349,065)	$ (1,729,808)

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Balance Sheet Details (Schedule of Inventory) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 27, 2012	Oct. 29, 2011
Inventory Disclosure [Abstract]
Inventory, Raw Materials	$ 24,240	$ 25,535
Inventory, Finished Goods	43,939	48,637
Inventory, Net	$ 68,179	$ 74,172

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Net Income Per Share (Tables)

12 Months Ended

Oct. 27, 2012

Earnings Per Share [Abstract]

Schedule Of Calculation Of Basic And Diluted Net Income (Loss) Per Share

The following table presents the calculation of basic and diluted net income per share (in thousands, except per share amounts):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Basic net income per share
Net income	$	195,181	$	50,610	$	116,523
Weighted-average shares used in computing basic net income per share	456,629		474,259		446,996
Basic net income per share	$	0.43	$	0.11	$	0.26
Diluted net income per share
Net income	$	195,181	$	50,610	$	116,523
Weighted-average shares used in computing basic net income per share	456,629		474,259		446,996
Dilutive potential common shares in the form of stock options	7,846		13,654		22,083
Dilutive potential common shares in the form of other share based awards	7,868		9,117		13,662
Weighted-average shares used in computing diluted net income per share	472,343		497,030		482,741
Diluted net income per share	$	0.41	$	0.10	$	0.24
Antidilutive potential common shares from: (1)
Stock options	16,402		21,905		21,217
Other share based awards	570		3,075		700
Convertible subordinated debt	—		—		3,552

(1) These potential common shares were excluded from diluted net income per share calculation because their effect would have been anti-dilutive.

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Goodwill And Intangible Assets Goodwill And Intangible Assets (Policies)

12 Months Ended

Oct. 27, 2012

Accounting Policies [Abstract]

Goodwill and Intangible Assets, Goodwill Policy

The Company conducts its goodwill impairment test annually, as of the first day of the second fiscal quarter, and whenever events or changes in facts and circumstances indicate that the fair value of the reporting unit may be less than its carrying amount. For the annual goodwill impairment test, the Company uses the income approach, the market approach, or a combination thereof, to determine each reporting unit’s fair value. The income approach provides an estimate of fair value based on discounted expected future cash flows (“DCF”). The market approach provides an estimate of fair value using various prices or market multiples applied to the reporting unit’s operating results and then applying an appropriate control premium. For the fiscal year 2012 annual goodwill impairment test, the Company used a combination of approaches to estimate each reporting unit’s fair value. The Company believed that at the time of impairment testing performed in the second fiscal quarter of 2012, the income approach and the market approach were equally representative of a reporting unit’s fair value.

Determining the fair value of a reporting unit or an intangible asset requires judgment and involves the use of significant estimates and assumptions. The Company based its fair value estimates on assumptions it believes to be reasonable, but inherently uncertain. Estimates and assumptions with respect to the determination of the fair value of its reporting units using the income approach include, among other inputs:

• The Company’s operating forecasts;

• Revenue growth rates; and

• Risk-commensurate discount rates and costs of capital.

The Company’s estimates of revenues and costs are based on historical data, various internal estimates and a variety of external sources, and are developed as part of our regular long-range planning process. The control premium used in market or combined approaches is determined by considering control premiums offered as part of the acquisitions that have occurred in the reporting units’ comparable market segments. Based on the results of the annual goodwill impairment analysis performed during the second fiscal quarter of 2012, the Company determined that no impairment needed to be recorded.

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Fair Value Measurements Fair Value Measurements (Policies)

12 Months Ended

Oct. 27, 2012

Accounting Policies [Abstract]

Fair Value Transfer Policy

During the fiscal year ended October 27, 2012, the Company had no transfers between levels of the fair value hierarchy of its assets measured at fair value.

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Summary Of Significant Accounting Policies

12 Months Ended

Oct. 27, 2012

Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

Summary of Significant Accounting Policies

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents.

Investments and Equity Securities

Investment securities with an original maturity of more than three months that mature less than one year from the Consolidated Balance Sheet date are considered short-term investments. Investment securities with an original or remaining maturity of one year or more and which the Company has the ability and intent to hold are considered long-term investments. Investments are classified as available-for-sale and are recorded on the accompanying Consolidated Balance Sheets at fair value.

Unrealized holding gains and losses related to the Company’s investments are included as a separate component of accumulated other comprehensive loss on the accompanying Consolidated Balance Sheets, net of any related tax effect. Realized gains and losses are calculated based on the specific identification method and are included in “Other expense, net” on the Consolidated Statements of Operations.

The Company recognizes an impairment charge when the fair values of its investments have fallen below their cost basis and the decline in fair value is assessed to be other-than-temporary. An other-than-temporary impairment is triggered when there is an intent to sell the security, it is more likely than not that the security will be required to be sold before recovery, or the Company is not expected to recover the entire amortized cost basis of the security. The Company also considers various factors in determining whether to recognize an impairment charge, including the length of time and extent to which the fair value has been less than the cost basis and the financial condition and near-term prospects of the issuer. For impairments involving credit losses, the Company recognizes the credit loss component in earnings and the remainder of the impairment is recorded in accumulated other comprehensive loss.

From time to time the Company makes equity investments in non-publicly traded companies. These investments are included in “Other assets” on the accompanying Consolidated Balance Sheets and are generally accounted for under the cost method as the Company does not have the ability to exercise significant influence over the respective issuer’s operating and financial policies nor does it have a liquidation preference that is substantive. The Company monitors its investments in non-publicly traded companies for impairment on a quarterly basis and makes appropriate reductions in carrying values when such impairments are determined to be other-than-temporary. Impairment charges are included in “Other expense, net” on the Consolidated Statements of Operations. Factors considered in determining an impairment include, but are not limited to, the current business environment including competition and uncertainty of financial condition, going concern considerations such as the rate at which the issuer company utilizes cash and the issuer company’s ability to obtain additional private financing to fulfill its stated business plan, the need for changes to the issuer company’s existing business model due to changing business environments and its ability to successfully implement necessary changes, and comparable valuations.

Fair Value of Financial Instruments

The fair value of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate cost because of their short maturities. The fair value of the Company’s investments is primarily determined using quoted market prices for those securities or similar financial instruments.

Derivative Financial Instruments

In the normal course of business, the Company is exposed to fluctuations in interest rates and the exchange rates associated with foreign currencies. The derivatives entered into by the Company qualify for and are designated as foreign currency cash flow hedges.

The derivatives are recognized on the Consolidated Balance Sheets at their respective fair values. Changes in fair values of outstanding cash flow hedges that are highly effective are recorded in accumulated other comprehensive loss until earnings are affected by the variability of cash flows of the underlying hedged transaction. In most cases, amounts recorded in accumulated other comprehensive loss will be released to earnings at maturity of the related derivative. The recognition of effective hedge results offsets the gains or losses on the underlying exposure. Cash flows from derivative transactions are classified according to the nature of the risk being hedged.

The Company formally documents all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking hedge transactions. This documentation includes linking all derivatives either to specific assets and liabilities on the consolidated balance sheets or specific firm commitments or forecasted transactions. The Company also formally assesses both at the hedge’s inception and on an ongoing basis whether the derivatives used in hedging transactions have been highly effective in offsetting changes in the cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods.

The Company discontinues hedge accounting prospectively when (i) the derivative is no longer highly effective in offsetting changes in the cash flows of a hedged item (including hedged items such as firm commitments or forecasted transactions); (ii) the derivative expires or is sold, terminated or exercised; (iii) it is no longer probable that the forecasted transaction will occur; or (iv) management determines that designating the derivative as a hedging instrument is no longer appropriate.

When the Company discontinues hedge accounting, but it continues to be probable that the forecasted transaction will occur in the originally expected period, the gain or loss on the derivative remains in accumulated other comprehensive loss and is reclassified into earnings when the forecasted transaction affects earnings. However, if it is no longer probable that a forecasted transaction will occur by the end of the originally specified time period or within an additional two-month period of time thereafter, the gain or loss that was in accumulated other comprehensive loss will be recognized immediately in earnings. In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the Company will carry the derivative at its fair value on the Consolidated Balance Sheet until maturity and will recognize future changes in the fair value in current period earnings. Any hedge ineffectiveness is recorded in current period earnings within “Other expenses.” Effectiveness is assessed based on the comparison of current forward rates to the rates established on the Company’s hedges.

Inventories

Inventories are stated at the lower of cost or market, using the first-in, first-out method. Inventory costs include material, labor and overhead. The Company records inventory write-downs based on excess and obsolete inventory determined primarily by its forecast of future demand. A portion of the Company’s inventory is located offsite at customers, third party managed service depots and at contract manufacturers’ locations. Cash flows related to the sale of inventories are classified as cash flows from operating activities.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. An estimated useful life of 3 years is used for computer equipment and 4 to 7 years is used for software based on the nature of the software purchased. Estimated useful lives of up to 4 years are used for engineering and other equipment, 7 years is used for furniture and an estimated useful life of 39 years is used for buildings. Leasehold improvements are amortized using the straight-line method over the shorter of 10 years or the remaining term of the lease.

Interest costs related to major construction projects are capitalized until the asset is ready for service. Capitalized interest is calculated by multiplying the weighted-average interest rate on the Company long-term debt by the qualifying construction costs. Interest capitalized may not exceed gross interest expense for the period. As the qualifying asset is moved to the depreciation and amortization pool, the related capitalized interest is also transferred and is amortized over the useful life of the related asset. Interest cost of $7.8 million was capitalized for the year ended October 30, 2010 specifically the Company campus project. No interest costs were capitalized during the years ended October 27, 2012 and October 29, 2011 since the construction of the Company campus project was completed in the third quarter of fiscal year 2010.

Brocade evaluates long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable in accordance with Accounting Standards Codification (“ASC”) 360-10 Property, Plant and Equipment. Brocade assesses the fair value of the assets based on the undiscounted future cash flow the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flow expected to result from the use of the asset plus net proceeds expected to result from the disposition of the asset, if any, are less than the carrying value of the asset. When Brocade identifies an impairment, Brocade reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values.

Goodwill and Intangible Assets

The Company evaluates goodwill on an annual basis during its second fiscal quarter or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized to the extent that the carrying amount of goodwill exceeds the asset’s implied fair value. Events which might indicate impairment include, but are not limited to, strategic decisions made in response to economic and competitive conditions, the impact of the economic environment on the Company’s customer base, material negative changes in relationships with significant customers, and/or a significant decline in the Company’s stock price for a sustained period.

Intangible assets are carried at cost less accumulated amortization. Amortization is recognized on a straight-line basis over the estimated useful life of the respective asset. The Company evaluates intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Examples of such events or circumstances include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of acquired assets or the strategy for the Company’s business, significant negative industry or economic trends, and/or a significant decline in the Company’s stock price for a sustained period. Impairment is recognized based on the difference between the fair value of the asset and its carrying value. For additional discussion, see Note 4, “Goodwill and Intangible Assets,” of the Notes to Consolidated Financial Statements.

Litigation Costs

The Company is subject to the possibility of legal actions arising in the ordinary course of business. The Company regularly monitors the status of pending legal actions to evaluate both the magnitude and likelihood of any potential losses. An accrual for these potential losses is made when they are probable and the amount of loss, or possible range of loss, can be reasonably estimated. Legal costs related to such potential losses are expensed as incurred. In addition, recoveries are shown as a reduction in litigation costs in the period in which they are realized.

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. Cash, cash equivalents and short-term investments are primarily maintained at five major financial institutions. Deposits held with banks may be redeemed upon demand and may exceed the amount of insurance provided on such deposits.

A majority of the Company’s accounts receivable balance is derived from sales to original equipment manufacturer (“OEM”) partners in the computer storage and server industry. As of October 27, 2012, three customers accounted for 16%, 12% and 10% respectively, of total accounts receivable, for a combined total of 38% of total accounts receivable. As of October 29, 2011, two customers accounted for 16% and 14%, respectively, of total accounts receivable, for a combined total of 30% of total accounts receivable. The Company performs ongoing credit evaluations of its customers and generally does not require collateral on accounts receivable balances. The Company has established reserves for credit losses, sales allowances, and other allowances.

For the years ended October 27, 2012, October 29, 2011 and October 30, 2010, the same three customers accounted for a combined total of 47% (EMC Corporation (“EMC”) with 16%, Hewlett-Packard Company (“HP”) with 13% and International Business Machines Corporation (“IBM”) with 18%), 43% (EMC with 15%, HP with 13% and IBM with 15%) and 47% (EMC with 16%, HP with 14% and IBM with 17%) of total net revenues, respectively.

The Company currently relies on single and limited sources for multiple key components used in the manufacture of its products. Additionally, the Company relies on multiple contract manufacturers for the production of its products, including Hon Hai Precision Industry Co., Ltd., Accton Wireless Broadband Corporation, Motorola, Inc. and Quanta Computer Incorporated (collectively the contract manufacturers or “CMs”). Although the Company uses standard parts and components for its products where possible, the Company’s CMs currently purchase, on their behalf, several key components used in the manufacture of products from single or limited supplier sources.

Revenue Recognition

Product revenue. Substantially all of the Company’s products are integrated with software that is essential to the functionality of the equipment. Additionally, the Company provides unspecified software upgrades and enhancements related to the equipment through its maintenance contracts for most of its products. Product revenue is generally recognized when all of the following criteria have been met:

• Persuasive evidence of an arrangement exists;

• Delivery has occurred;

• The fee is fixed or determinable; and

• Collectability is reasonably assured.

For newly introduced products, many of the Company’s large OEM customers require a product qualification period during which the Company’s products are tested and approved by the OEM customers for sale to their customers. Revenue recognition and related cost are deferred for shipments to new OEM customers and for shipments of newly introduced products to existing OEM customers until satisfactory evidence of completion of the product qualification has been received from the OEM customer. In addition, revenue from sales to the Company’s distributor customers is recognized in the same period in which the product is actually sold by the distributor (sell-through).

The Company reduces revenue for estimated sales allowances at the time of shipment and sales programs at the later of revenue recognition or communication of the commitment for sales incentives. Sales allowances are estimated based on historical sales returns. Sales programs are estimated based on approved sales programs versus claims under such sales programs, current trends and the Company’s expectations regarding future activity. In addition, the Company maintains an allowance for doubtful accounts, which is also accounted for as a reduction in revenue. The Company establishes the allowance for doubtful accounts to ensure accounts receivables are not overstated due to uncollectability. The Company maintains bad debt reserves based upon the analysis of accounts receivable, historical collection patterns, customer concentrations, customer creditworthiness, current economic trends, changes in customer payment terms and practices, and customer communication. The Company records a specific reserve for individual accounts when it becomes aware of a customer’s likely inability to meet its financial obligations, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position. If circumstances related to customers change, the Company would further adjust estimates of the recoverability of receivables.

Multiple-element arrangements. The Company’s multiple-element product offerings include networking hardware with embedded software products and support, which are considered separate units of accounting. For certain of the Company’s products, software and non-software components function together to deliver the tangible products’ essential functionality.

The Company allocates revenue to each element in a multiple-element arrangement based upon their relative selling price. When applying the relative selling price method, the Company determines the selling price for each deliverable using vendor-specific objective evidence (“VSOE”) of selling price, if it exists, or third-party evidence (“TPE”) of selling price. If neither VSOE nor TPE of selling price exist for a deliverable, the Company uses its best estimate of selling price for that deliverable. Revenue allocated to each element is then recognized when the basic revenue recognition criteria are met for each element.

The Company determines VSOE based on its normal pricing and discounting practices for the specific product or service when sold separately. In determining VSOE, the Company requires that a substantial majority of the selling prices for a product or service fall within a reasonably narrow pricing range. For post-contract customer support (“PCS”), the Company considers stated renewal rates in determining VSOE.

In most instances, the Company is not able to establish VSOE for all deliverables in an arrangement with multiple elements. This may be due to the Company infrequently selling each element separately, not pricing products within a narrow range, or only having a limited sales history. When VSOE cannot be established, the Company attempts to establish selling price for each element based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, the Company’s go-to-market strategy differs from that of its peers and its offerings contain a significant level of customization and differentiation such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Company is unable to reliably determine what similar competitor products’ selling prices are on a stand-alone basis. Therefore, the Company is typically not able to determine TPE.

When the Company is unable to establish selling price using VSOE or TPE, the Company uses estimated selling price (“ESP”) in its allocation of the arrangement consideration. The objective of ESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. ESP is generally used for offerings that are not typically sold on a stand-alone basis or for new or highly customized offerings.

The Company determines ESP for a product by considering multiple factors including, but not limited to, geographies, market conditions, competitive landscape, internal costs, gross margin objectives and pricing practices. The determination of ESP is made through consultation with and formal approval by the Company’s management, taking into consideration the go-to-market strategy.

The Company regularly reviews VSOE, TPE and ESP and maintains internal controls over the establishment and updates of these estimates. There was no material impact on revenues during the fiscal year ended October 27, 2012 nor does the Company expect a material impact in the near term from changes in VSOE, TPE or ESP.

Services revenue. Services revenue consists of training and maintenance arrangements, including PCS and other professional services. PCS services are offered under renewable, annual fee-based contracts or as part of multiple-element arrangements, and typically include telephone support and upgrades and enhancements to the Company’s operating system software. Revenue related to PCS elements is deferred and recognized ratably over the contractual period. PCS contracts are typically one to three years in length.

Professional services are offered under hourly or fixed fee-based contracts. Professional services revenue is recognized as services are performed. Training revenue is recognized upon completion of the training.

Warranty Expense

The Company provides standard warranties on its products ranging from one year to limited lifetime warranties. Estimated future warranty costs are accrued at the time of shipment and charged to cost of revenues based upon historical experience, current trends and the Company’s expectations regarding future experience.

Foreign Currency

Assets and liabilities of the Company’s international subsidiaries in which the local currency is the functional currency are translated into U.S. dollars at period-end exchange rates. Income and expenses are translated into U.S. dollars at the average exchange rates during the period. The resulting translation adjustments are included in the Company’s Consolidated Balance Sheets in the stockholders’ equity section as a component of accumulated other comprehensive loss. Foreign exchange gains and losses for assets and liabilities of the Company’s international subsidiaries in which the local currency is the U.S. dollar are recorded in the Company’s Consolidated Statement of Operations.

Capitalized Software Development Costs

Eligible software development costs are capitalized upon the establishment of technological feasibility, which is defined as being equivalent to completion of a beta-phase working prototype. Total eligible software development costs have not been material to date.

Costs related to internally developed software and software purchased for internal use, primarily for implementation and upgrade of the Company’s enterprise wide integrated business information system, are capitalized and included in “Property and equipment, net.” These costs are being depreciated over the estimated useful lives of four to seven years based on the nature of the software purchased.

Advertising Costs

The Company expenses all advertising costs as incurred. Advertising costs were $17.7 million, $12.1 million and $7.9 million for the years ended October 27, 2012, October 29, 2011 and October 30, 2010, respectively.

Income Taxes

The Company recognizes income tax expense for the amount of taxes payable or refundable for the current year. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts, along with net operating loss carry forwards and credit carry forwards. A valuation allowance is recognized to the extent that it is more likely than not that the tax benefits will not be realized.

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes. For additional discussion, see Note 13, “Income Taxes,” of the Notes to Consolidated Financial Statements.

Computation of Net Income per Share

Basic net income per share is computed using the weighted-average number of common shares outstanding during the period, less shares subject to repurchase. Diluted net income per share is computed using the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period that have a dilutive effect on earnings per share. Potentially dilutive common shares result from the assumed exercise of outstanding stock options, assumed vesting of outstanding restricted stock units and awards and assumed issuance of stock under the employee stock purchase plan all using the treasury stock method, as well as the assumed conversion of outstanding convertible subordinated debt using the if-converted method.

Stock-Based Compensation

The Company accounts for employee equity awards under the fair value method. Accordingly, the Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options and the Employee Stock Purchase Plan (“ESPP”) is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to restricted stock units is based on the fair value of the Company’s common stock on the date of the grant. The Company records stock-based compensation expense over the twenty-four month offering period in connection with shares issued under its ESPP. The compensation expense for stock-based awards is reduced by an estimate for forfeitures and is recognized over the expected term of the award under a graded vesting method, except for restricted stock units granted by the Company, which are recognized over the expected term of the award under a straight-line vesting method. For additional discussion, see Note 12, “Stock-Based Compensation,” of the Notes to Consolidated Financial Statements.

The Company accounts for the tax effects of share-based payment awards using the alternative transition method, which includes simplified methods to establish the beginning balance of the additional paid-in capital pool (“APIC Pool”) related to the tax effects of employee stock-based compensation and to determine the subsequent impact on the APIC Pool and consolidated statement of cash flows of the tax effects of employee stock-based compensation awards.

Recent Accounting Pronouncements or Updates That Are Not Yet Effective

Recent Accounting Pronouncements or Updates That Are Not Yet Effective

In September 2011, the FASB issued an update to ASC 350 Intangibles—Goodwill and Other (“ASC 350”): Testing Goodwill for Impairment. The update gives an entity an option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. An entity has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test. An entity may resume performing the qualitative assessment in any subsequent period. Under the amendments, an entity no longer is permitted to carry forward its detailed calculation of a reporting unit’s fair value from a prior year as previously permitted by ASC 350. This update to ASC 350 is effective for the Company in the fiscal year 2013, with earlier adoption permitted if the Company’s financial statements for the most recent annual or interim period have not yet been issued. The Company is currently evaluating the impact of the update, but does not expect the adoption of this update to ASC 350 to have a material impact on its financial position, results of operations or cash flows.

In June 2011 and December 2011, the FASB issued updates to ASC 220 Comprehensive Income (“ASC 220”): Presentation of Comprehensive Income. The amendments from these updates will result in more converged guidance on how comprehensive income is presented under U.S. GAAP and International Financial Reporting Standards (“IFRS”). With these updates to ASC 220, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The amendments in these update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income, nor does it affect how earnings per share is calculated or presented. Current U.S. GAAP allows reporting entities three alternatives for presenting other comprehensive income and its components in financial statements. One of those alternatives is to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. This update eliminates that option. The update to ASC 220 should be applied retrospectively and will be adopted by the Company in the first quarter of fiscal year 2013. The Company does not expect the adoption of ASC 220 to have an impact on its financial position, results of operations or cash flows.

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Derivative Instruments And Hedging Activities Derivative Instruments And Hedging Activities (Policies)

12 Months Ended

Oct. 27, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives, Methods of Accounting, Hedging Derivatives

A majority of the Company’s revenue, expense and capital purchasing activities is transacted in U.S. dollars. However, the Company is exposed to foreign currency exchange rate risk inherent in conducting business globally in numerous currencies. The Company is primarily exposed to foreign currency fluctuations related to operating expenses denominated in currencies other than the U.S. dollar, of which the most significant to its operations for the fiscal year ended October 27, 2012 were the Chinese yuan, the euro, the Japanese yen, the Indian rupee, the British pound, the Singapore dollar and the Swiss franc. The Company has established a foreign currency risk management program to protect against the volatility of future cash flows caused by changes in foreign currency exchange rates. This program reduces, but does not always entirely eliminate, the impact of foreign currency exchange rate movements. The Company’s foreign currency risk management program includes foreign currency derivatives with cash flow hedge accounting designation that utilizes foreign currency forward and option contracts to hedge exposures to the variability in the U.S. dollar equivalent of anticipated non-U.S. dollar-denominated cash flows. These instruments generally have a maturity of less than one year. For these derivatives, the Company reports the after-tax gain or loss from the effective portion of the hedge as a component of accumulated other comprehensive loss in stockholders’ equity and reclassifies it into earnings in the same period in which the hedged transaction affects earnings.

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Stock-Based Compensation Stock-Based Compensation (Schedules of Share-based Payment Award, Stock Options and Employee Stock Purchase Plan, Valuation Assumptions) (Details)	12 Months Ended
	Oct. 27, 2012 years	Oct. 29, 2011 years	Oct. 30, 2010 years
Stock options
Share-based Compensation Arrangement by Share-based Payment Award
Expected dividend yield	0.00%	0.00%	0.00%
Risk free interest rate minimum	0.10%	0.10%	0.30%
Risk free interest rate maximum	0.80%	0.60%	2.00%
Expected volatility minimum	48.80%	50.30%	49.30%
Expected volatility maximum	56.50%	61.90%	53.30%
Expected term (in years)	4	4	4
Employee stock purchase plan
Share-based Compensation Arrangement by Share-based Payment Award
Expected dividend yield	0.00%	0.00%	0.00%
Risk free interest rate	0.20%	0.60%	0.60%
Expected volatility	52.50%	65.50%	67.80%
Expected term (in years)	1.5	1.1	1.5

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Derivative Instruments And Hedging Activities (Tables)

12 Months Ended

Oct. 27, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule Of Net Gains (Losses) Related To The Effective Portion Of Foreign Currency Derivatives

Net gains (losses) relating to the effective portion of foreign currency derivatives recorded in the consolidated statements of operations are as follows (in thousands):

	Fiscal Year Ended October 27, 2012			Fiscal Year Ended October 29, 2011		Fiscal Year Ended October 30, 2010
Cost of revenues	$	(1,043	)	$	882	$	—
Research and development	(1,094		)	496		—
Sales and marketing	(5,704		)	5,498		—
General and Administrative	(510		)	416		—
Other expenses	—			—		(5,285		)
Total	$	(8,351	)	$	7,292	$	(5,285	)

Schedule Of Total Gross Notional Amounts, Presented By Currency

Total gross notional amounts, presented by currency, are as follows (in thousands):

	Derivatives Designated as Hedging Instruments				Derivatives Not Designated as Hedging Instruments
In United States Dollars	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Euro	$	43,357	$	57,935	$	—	$	—
British pound	20,499		25,282		—		—
India rupee	16,046		—		—		—
Singapore dollar	12,918		16,136		—		—
Swiss franc	8,575		13,060		—		5,012
Japanese yen	3,776		17,957		12,068		—
Total	$	105,171	$	130,370	$	12,068	$	5,012

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Goodwill And Intangible Assets (Schedule Of Estimated Future Amortization Of Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract]
2013	$ 93,109
2014	16,156
Total	$ 109,265

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Commitments And Contingencies (Purchase Commitment Narrative) (Details) (Inventory Purchase Commitment, USD $) In Millions, unless otherwise specified	Oct. 27, 2012
Inventory Purchase Commitment
Purchase Commitment, Excluding Long-term Commitment [Line Items]
Purchase Commitment, Remaining Minimum Amount Committed	$ 212.0
Purchase Commitment, Recognized Loss	$ 4.3

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Consolidated Statements Of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Net revenues
Product	$ 1,890,856	$ 1,789,814	$ 1,728,814
Service	346,914	357,628	362,339
Total net revenues	2,237,770	2,147,442	2,091,153
Cost of revenues
Product	689,856	677,196	683,486
Service	164,895	186,712	176,547
Total cost of revenues	854,751	863,908	860,033
Gross margin	1,383,019	1,283,534	1,231,120
Operating expenses:
Research and development	363,090	354,401	354,260
Sales and marketing	608,502	608,513	534,458
General and administrative	74,583	69,506	67,848
Amortization of intangible assets	59,204	60,713	65,623
Restructuring, integration and indemnification costs	(89)	125	1,100
Loss on sale of subsidiary	0	12,756	0
Total operating expenses	1,105,290	1,106,014	1,023,289
Income (loss) from operations	277,729	177,520	207,831
Interest income	659	597	763
Interest expense	(52,488)	(97,838)	(85,858)
Other expenses, net	(1,473)	(975)	(7,215)
Gain (loss) on sale of investments and property, net	(26)	124	(8,551)
Income (loss) before income tax	224,401	79,428	106,970
Income tax expense (benefit)	29,220	28,818	(9,553)
Net income (loss)	$ 195,181	$ 50,610	$ 116,523
Net income per share - basic (dollars per share)	$ 0.43	$ 0.11	$ 0.26
Net income per share - diluted (dollars per share)	$ 0.41	$ 0.10	$ 0.24
Shares used in per share calculation - basic	456,629	474,259	446,996
Shares used in per share calculation - diluted	472,343	497,030	482,741

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Guarantor And Non-Guarantor Subsidiaries (Tables)

12 Months Ended

Oct. 27, 2012

Guarantor And Non-Guarantor Subsidiaries [Abstract]

Schedule Of Condensed Consolidated Balance Sheet

The following is the consolidated balance sheet as of October 27, 2012 (in thousands):

	Brocade Communications Systems, Inc.		Subsidiary Guarantors			Non- Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	284,466	$	680		$	428,080	$	—		$	713,226
Accounts receivable, net	150,367		(1,847		)	84,619		—			233,139
Inventories	55,084		—			13,095		—			68,179
Intercompany receivables	—		478,133			—		(478,133		)	—
Other current assets	124,690		514			15,606		225			141,035
Total current assets	614,607		477,480			541,400		(477,908		)	1,155,579
Property and equipment, net	500,530		213			18,197		—			518,940
Investment in subsidiaries	871,157		—			—		(871,157		)	—
Other non-current assets	1,814,729		90,766			1,247		—			1,906,742
Total assets	$	3,801,023	$	568,459		$	560,844	$	(1,349,065	)	$	3,581,261
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	92,661	$	—		$	24,689	$	—		$	117,350
Current portion of long-term debt	2,226		(249		)	—		—			1,977
Intercompany payables	434,981		—			43,152		(478,133		)	—
Other current liabilities	346,959		7,628			136,329		225			491,141
Total current liabilities	876,827		7,379			204,170		(477,908		)	610,468
Long-term debt, net of current portion	599,203		—			—		—			599,203
Other non-current liabilities	89,173		2,429			44,168		—			135,770
Total liabilities	1,565,203		9,808			248,338		(477,908		)	1,345,441
Total stockholders’ equity	2,235,820		558,651			312,506		(871,157		)	2,235,820
Total liabilities and stockholders’ equity	$	3,801,023	$	568,459		$	560,844	$	(1,349,065	)	$	3,581,261

The following is the consolidated balance sheet as of October 29, 2011 (in thousands):

	Brocade Communications Systems, Inc.		Subsidiary Guarantors			Non- Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	101,367	$	2,301		$	311,308	$	—		$	414,976
Accounts receivable, net	157,839		(2,149		)	93,451		—			249,141
Inventories	50,000		—			24,172		—			74,172
Intercompany receivables	—		446,455			—		(446,455		)	—
Other current assets	87,495		805			15,609		2,003			105,912
Total current assets	396,701		447,412			444,540		(444,452		)	844,201
Property and equipment, net	460,347		55,594			16,443		—			532,384
Investment in subsidiaries	1,285,356		—			—		(1,285,356		)	—
Other non-current assets	1,506,086		590,318			1,319		—			2,097,723
Total assets	$	3,648,490	$	1,093,324		$	462,302	$	(1,729,808	)	$	3,474,308
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	85,700	$	376		$	23,395	$	—		$	109,471
Current portion of long-term debt	40,539		—			—		—			40,539
Intercompany payables	377,228		—			69,227		(446,455		)	—
Other current liabilities	276,982		17,261			119,731		2,003			415,977
Total current liabilities	780,449		17,637			212,353		(444,452		)	565,987
Long-term debt, net of current portion	748,904		—			—		—			748,904
Other non-current liabilities	104,999		580			39,700		—			145,279
Total liabilities	1,634,352		18,217			252,053		(444,452		)	1,460,170
Total stockholders’ equity	2,014,138		1,075,107			210,249		(1,285,356		)	2,014,138
Total liabilities and stockholders’ equity	$	3,648,490	$	1,093,324		$	462,302	$	(1,729,808	)	$	3,474,308

Schedule Of Condensed Consolidated Statement Of Income

The following is the consolidated statement of operations for the fiscal year ended October 27, 2012 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	1,409,705		$	4,685		$	823,380		$	—		$	2,237,770
Intercompany revenues	44,152			—			21,709			(65,861		)	—
Total net revenues	1,453,857			4,685			845,089			(65,861		)	2,237,770
Cost of revenues	559,835			49,935			234,889			10,092			854,751
Intercompany cost of revenues	(35,070		)	—			100,931			(65,861		)	—
Total cost of revenues	524,765			49,935			335,820			(55,769		)	854,751
Gross margin (loss)	929,092			(45,250		)	509,269			(10,092		)	1,383,019
Operating expenses	827,318			56,838			231,226			(10,092		)	1,105,290
Intercompany operating expenses (income)	(138,197		)	(27,319		)	165,516			—			—
Total operating expenses	689,121			29,519			396,742			(10,092		)	1,105,290
Income (loss) from operations	239,971			(74,769		)	112,527			—			277,729
Other income (expense)	(49,470		)	4			(3,862		)	—			(53,328		)
Income (loss) before income tax provision and equity in net earnings (losses) of subsidiaries	190,501			(74,765		)	108,665			—			224,401
Income tax expense	20,432			—			8,788			—			29,220
Equity in net earnings (losses) of subsidiaries	25,112			—			—			(25,112		)	—
Net income (loss)	$	195,181		$	(74,765	)	$	99,877		$	(25,112	)	$	195,181

The following is the consolidated statement of operations for the fiscal year ended October 29, 2011 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	1,285,732		$	27,569		$	834,141		$	—		$	2,147,442
Intercompany revenues	88,063			1,753			35,980			(125,796		)	—
Total net revenues	1,373,795			29,322			870,121			(125,796		)	2,147,442
Cost of revenues	531,162			85,540			233,448			13,758			863,908
Intercompany cost of revenues	(2,263		)	—			128,059			(125,796		)	—
Total cost of revenues	528,899			85,540			361,507			(112,038		)	863,908
Gross margin (loss)	844,896			(56,218		)	508,614			(13,758		)	1,283,534
Operating expenses	821,018			76,645			222,109			(13,758		)	1,106,014
Intercompany operating expenses (income)	(138,789		)	(25,694		)	164,483			—			—
Total operating expenses	682,229			50,951			386,592			(13,758		)	1,106,014
Income (loss) from operations	162,667			(107,169		)	122,022			—			177,520
Other income (expense)	109,902			(7,518		)	(200,476		)	—			(98,092		)
Income (loss) before income tax provision and equity in net earnings (losses) of subsidiaries	272,569			(114,687		)	(78,454		)	—			79,428
Income tax expense	22,115			46			6,657			—			28,818
Equity in net earnings (losses) of subsidiaries	(199,844		)	—			—			199,844			—
Net income (loss)	$	50,610		$	(114,733	)	$	(85,111	)	$	199,844		$	50,610

The following is the consolidated statement of operations for fiscal year ended October 30, 2010 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	1,287,646		$	50,731		$	752,776		$	—		$	2,091,153
Intercompany revenues	102,178			13,954			25,464			(141,596		)	—
Total net revenues	1,389,824			64,685			778,240			(141,596		)	2,091,153
Cost of revenues	529,641			112,477			214,024			3,891			860,033
Intercompany cost of revenues	40,588			—			101,008			(141,596		)	—
Total cost of revenues	570,229			112,477			315,032			(137,705		)	860,033
Gross margin (loss)	819,595			(47,792		)	463,208			(3,891		)	1,231,120
Operating expenses	783,968			63,855			179,357			(3,891		)	1,023,289
Intercompany operating expenses (income)	(167,746		)	(30,349		)	198,095			—			—
Total operating expenses	616,222			33,506			377,452			(3,891		)	1,023,289
Income (loss) from operations	203,373			(81,298		)	85,756			—			207,831
Other expense	(80,276		)	(1,628		)	(18,957		)	—			(100,861		)
Income (loss) before income tax provision and equity in net earnings (losses) of subsidiaries	123,097			(82,926		)	66,799			—			106,970
Income tax expense (benefit)	(20,672		)	1,266			9,853			—			(9,553		)
Equity in net earnings (losses) of subsidiaries	(27,246		)	—			—			27,246			—
Net income (loss)	$	116,523		$	(84,192	)	$	56,946		27,246			$	116,523

Schedule Of Condensed Consolidated Statement Of Cash Flows

The following is the consolidated statement of cash flows for the fiscal year ended October 27, 2012 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments		Total
Net cash provided by (used in) operating activities	$	464,097		$	(1,799	)	$	128,572		$	—	$	590,870
Cash flows from investing activities:
Proceeds from sale of subsidiary	35			—			—			—		35
Proceeds from maturities and sale of short-term investments	—			952			—			—		952
Purchases of property and equipment	(62,791		)	—			(10,006		)	—		(72,797		)
Net cash provided by (used in) investing activities	(62,756		)	952			(10,006		)	—		(71,810		)
Cash flows from financing activities:
Payment of principal related to the term loan	(190,000		)	—			—			—		(190,000		)
Payment of principal related to capital leases	(1,866		)	—			—			—		(1,866		)
Common stock repurchases	(130,209		)	—			—			—		(130,209		)
Proceeds from issuance of common stock	98,791			—			—			—		98,791
Excess tax benefits from stock-based compensation	5,042			—			99			—		5,141
Net cash provided by (used in) financing activities	(218,242		)	—			99			—		(218,143		)
Effect of exchange rate fluctuations on cash and cash equivalents	—			—			(1,893		)	—		(1,893		)
Net increase (decrease) in cash and cash equivalents	183,099			(847		)	116,772			—		299,024
Cash and cash equivalents, beginning of period	101,367			1,527			311,308			—		414,202
Cash and cash equivalents, end of period	$	284,466		$	680		$	428,080		$	—	$	713,226

The following is the consolidated statement of cash flows for the fiscal year ended October 29, 2011 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments		Total
Net cash provided (used) by operating activities	$	436,714		$	(5,852	)	$	18,370		$	—	$	449,232
Cash flows from investing activities:
Purchases of short-term investments	—			(38		)	—			—		(38		)
Proceeds from maturities and sale of short-term investments	—			1,604			—			—		1,604
Purchases of property and equipment	(86,447		)	(33		)	(10,317		)	—		(96,797		)
Proceeds from sale of subsidiary	4,966			(1,061		)	—			—		3,905
Net cash provided by (used in) investing activities	(81,481		)	472			(10,317		)	—		(91,326		)
Cash flows from financing activities:
Payment of principal related to the term loan	(359,898		)	—			—			—		(359,898		)
Payment of fees related to the term loan	(1,167		)	—			—			—		(1,167		)
Proceeds from term loan	198,950			—			—			—		198,950
Payment of principal related to capital leases	(1,761		)	—			—			—		(1,761		)
Common stock repurchases	(210,698		)	—			—			—		(210,698		)
Proceeds from issuance of common stock	97,152			—			—			—		97,152
Excess tax benefits from stock-based compensation	101			—			211			—		312
Net cash provided by (used in) financing activities	(277,321		)	—			211			—		(277,110		)
Effect of exchange rate fluctuations on cash and cash equivalents	—			—			(578		)	—		(578		)
Net increase (decrease) in cash and cash equivalents	77,912			(5,380		)	7,686			—		80,218
Cash and cash equivalents, beginning of period	23,455			6,907			303,622			—		333,984
Cash and cash equivalents, end of period	$	101,367		$	1,527		$	311,308		$	—	$	414,202

The following is the consolidated statement of cash flows for the fiscal year ended October 30, 2010 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments		Total
Net cash provided by operating activities	$	71,094		$	169,986		$	57,433		$	—	$	298,513
Cash flows from investing activities:
Purchases of short-term investments	—			(53		)	—			—		(53		)
Purchases of non-marketable minority equity investments	(200		)	—			—			—		(200		)
Proceeds from maturities and sale of short-term investments	—			3,255			—			—		3,255
Proceeds from sale of property	30,185			—			—			—		30,185
Purchases of property and equipment	(196,193		)	471			(5,899		)	—		(201,621		)
Net cash provided by (used in) investing activities	(166,208		)	3,673			(5,899		)	—		(168,434		)
Cash flows from financing activities:
Payment of debt issuance costs related to the senior secured notes	(3,666		)	—			—			—		(3,666		)
Payment of principal related to the revolving credit facility	(14,050		)	—			—			—		(14,050		)
Payment of principal related to the convertible subordinated debt	—			(172,500		)	—			—		(172,500		)
Payment of principal related to the term loan	(583,029		)	—			—			—		(583,029		)
Payment of principal related to capital leases	(1,173		)	—			—			—		(1,173		)
Common stock repurchases	(25,004		)	—			—			—		(25,004		)
Proceeds from senior secured notes	587,968			—			—			—		587,968
Proceeds from issuance of common stock	81,593			—			—			—		81,593
Excess tax benefits from stock-based compensation	1,420			—			741			—		2,161
Net cash provided by (used in) financing activities	44,059			(172,500		)	741			—		(127,700		)
Effect of exchange rate fluctuations on cash and cash equivalents	—			—			(2,588		)	—		(2,588		)
Net increase (decrease) in cash and cash equivalents	(51,055		)	1,159			49,687			—		(209		)
Cash and cash equivalents, beginning of period	74,510			5,748			253,935			—		334,193
Cash and cash equivalents, end of period	$	23,455		$	6,907		$	303,622		$	—	$	333,984

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Net Income Per Share (Schedule Of Calculation Of Basic And Diluted Net Income (Loss) Per Share) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Oct. 27, 2012	Jul. 28, 2012	Apr. 28, 2012	Jan. 28, 2012	Oct. 29, 2011	Jul. 30, 2011	Apr. 30, 2011	Jan. 29, 2011	Oct. 27, 2012		Oct. 29, 2011		Oct. 30, 2010
Earnings Per Share, Basic
Net income	$ 54,001	$ 43,300	$ 39,296	$ 58,584	$ (4,324)	$ 1,937	$ 26,079	$ 26,918	$ 195,181		$ 50,610		$ 116,523
Weighted-average shares used in computing basic net income per share	459,333	457,147	457,541	452,494	474,975	483,744	473,209	465,108	456,629		474,259		446,996
Basic net income per share (dollars per share)	$ 0.12	$ 0.09	$ 0.09	$ 0.13	$ (0.01)	$ 0.00	$ 0.06	$ 0.06	$ 0.43		$ 0.11		$ 0.26
Earnings Per Share, Diluted
Net income	$ 54,001	$ 43,300	$ 39,296	$ 58,584	$ (4,324)	$ 1,937	$ 26,079	$ 26,918	$ 195,181		$ 50,610		$ 116,523
Weighted-average shares used in computing diluted net income per share	474,213	469,571	476,848	468,738	474,975	509,548	501,511	491,166	472,343		497,030		482,741
Diluted net income per share (dollars per share)	$ 0.11	$ 0.09	$ 0.08	$ 0.12	$ (0.01)	$ 0.00	$ 0.05	$ 0.05	$ 0.41		$ 0.10		$ 0.24
Weighted Average Number of Shares Outstanding Reconciliation
Weighted-average shares used in computing basic net income per share	459,333	457,147	457,541	452,494	474,975	483,744	473,209	465,108	456,629		474,259		446,996
Dilutive potential common shares in the form of stock options									7,846		13,654		22,083
Dilutive potential common shares in the form of other share based awards									7,868		9,117		13,662
Weighted-average shares used in computing diluted net income per share	474,213	469,571	476,848	468,738	474,975	509,548	501,511	491,166	472,343		497,030		482,741
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive potential common shares									16,402	[1]	21,905	[1]	21,217	[1]
Other share based awards
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive potential common shares									570	[1]	3,075	[1]	700	[1]
Convertible debt
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive potential common shares									0	[1]	0	[1]	3,552	[1]

[1] These potential common shares were excluded from diluted net income per share calculation because their effect would have been anti-dilutive.

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Consolidated Statements Of Stockholders' Equity And Other Comprehensive Income (USD $) In Thousands, unless otherwise specified	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings (Accumulated Deficit)	Total Stockholders’ Equity	Comprehensive Income (Loss)
Balance, Value at Oct. 31, 2009		$ 434	$ 1,901,200	$ (5,920)	$ (126,277)	$ 1,769,437
Balance, Shares at Oct. 31, 2009		433,988
Increase (Decrease) in Stockholders' Equity
Issuance of common stock, Value		32	68,900			68,932
Issuance of common stock, Shares		31,757
Common stock repurchases, Value		(5)	(24,999)			(25,004)
Common stock repurchases, Shares		(4,454)
Settlement of stock awards assumed upon acquisition			(1,362)			(1,362)
Tax benefit (detriment) from employee stock plans			2,161			2,161
Stock-based compensation			101,625			101,625
Change in net unrealized gains on cash flow hedges				5,346		5,346	5,346
Change in cumulative translation adjustments				(2,253)		(2,253)	(2,253)
Net income	116,523
Net Income (Loss)					116,523	116,523	116,523
Total Comprehensive Income (Loss), Net of Tax							119,616
Balance, Value at Oct. 30, 2010		461	2,047,525	(2,827)	(9,754)	2,035,405
Balance, Shares at Oct. 30, 2010		461,291
Increase (Decrease) in Stockholders' Equity
Issuance of common stock, Value		35	70,119			70,154
Issuance of common stock, Shares		34,735
Common stock repurchases, Value		(48)	(210,650)			(210,698)
Common stock repurchases, Shares		(48,004)
Tax benefit (detriment) from employee stock plans			(5,240)			(5,240)
Stock-based compensation			83,076			83,076
Change in net unrealized gains on cash flow hedges				(8,275)		(8,275)	(8,275)
Change in cumulative translation adjustments				(894)		(894)	(894)
Net income	50,610
Net Income (Loss)					50,610	50,610	50,610
Total Comprehensive Income (Loss), Net of Tax							41,441
Balance, Value at Oct. 29, 2011		448	1,984,830	(11,996)	40,856	2,014,138
Balance, Shares at Oct. 29, 2011		448,022
Increase (Decrease) in Stockholders' Equity
Issuance of common stock, Value		33	82,138			82,171
Issuance of common stock, Shares		33,198
Common stock repurchases, Value		(24)	(130,185)			(130,209)
Common stock repurchases, Shares		(24,307)
Tax benefit (detriment) from employee stock plans			(4,762)			(4,762)
Stock-based compensation			77,169			77,169
Change in net unrealized gains on cash flow hedges				3,965		3,965	3,965
Change in cumulative translation adjustments				(1,833)		(1,833)	(1,833)
Net income	195,181
Net Income (Loss)						195,181	195,181
Total Comprehensive Income (Loss), Net of Tax							197,313
Balance, Value at Oct. 27, 2012		$ 457	$ 2,009,190	$ (9,864)	$ 236,037	$ 2,235,820
Balance, Shares at Oct. 27, 2012		456,913

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Segment Information Segment Information (Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012		Oct. 29, 2011		Oct. 30, 2010
Revenues from External Customers and Long-Lived Assets
Revenues	$ 2,237,770		$ 2,147,442		$ 2,091,153
Property and equipment, net	518,940		532,384		539,117
United States
Revenues from External Customers and Long-Lived Assets
Revenues	1,414,390		1,313,302		1,338,262
Property and equipment, net	500,744		515,940		524,287
International
Revenues from External Customers and Long-Lived Assets
Revenues	823,380		834,140		752,891
Property and equipment, net	18,196		16,444		14,830
Europe Middle East And Africa, including Netherlands
Revenues from External Customers and Long-Lived Assets
Revenues	493,979	[1]	502,999	[1]	482,707	[1]
Netherlands
Revenues from External Customers and Long-Lived Assets
Revenues	259,200		257,500		254,400
Asia Pacific
Revenues from External Customers and Long-Lived Assets
Revenues	186,244		212,636		173,243
JAPAN
Revenues from External Customers and Long-Lived Assets
Revenues	99,887		75,542		58,914
Canada Central And South America
Revenues from External Customers and Long-Lived Assets
Revenues	$ 43,270		$ 42,963		$ 38,027

[1] Includes net revenues of $259.2 million, $257.5 million and $254.4 million for the years ended October 27, 2012, October 29, 2011 and October 30, 2010, respectively, relating to the Netherlands.

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Balance Sheet Details (Schedule of Capital Leased Assets) (Details) (Furniture and fixtures, USD $) In Thousands, unless otherwise specified	Oct. 27, 2012	Oct. 29, 2011
Furniture and fixtures
Capital Leases, Balance Sheet, Assets by Major Class, Net [Abstract]
Cost	$ 10,613	$ 10,613
Accumulated depreciation	(3,647)	(2,131)
Total	$ 6,966	$ 8,482

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Guarantor And Non-Guarantor Subsidiaries (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Jan. 20, 2010 Senior Secured Notes
Guarantor And Non-Guarantor Subsidiaries [Abstract]
Description of Guarantees Given by Parent Company	The Company's obligations under the senior secured notes are guaranteed by certain of the Company's domestic subsidiaries (the “Subsidiary Guarantors”). Each of the Subsidiary Guarantors is 100% owned by the Company and all guarantees are joint and several. The senior secured notes are not guaranteed by certain of the Company's domestic subsidiaries and all of the Company’s foreign subsidiaries (the “Non-Guarantor Subsidiaries”). Pursuant to the terms of the senior secured notes, the guarantees are full and unconditional, but are subject to release under the following circumstances: - upon the sale of the subsidiary or all or substantially all of its assets; - upon the discharge of the guarantees under the credit facility or other debt provided that the credit facility has been paid in full and the applicable series of senior secured notes have an investment grade rating from both Standard & Poor's and Moody's; - upon designation of the subsidiary as an “unrestricted subsidiary” under the applicable Indenture; - upon the merger, consolidation or liquidation of the subsidiary into another subsidiary guarantor; and - upon legal or covenant defeasance or the discharge of the Company's obligations under the applicable indenture. Because the guarantees are subject to release under the above described circumstances, they would not be deemed “full and unconditional” for purposes of Rule 3-10 of Regulation S-X. However, as these circumstances are customary, the Company concluded that it may rely on Rule 3-10 of Regulation S-X, as the other requirements of Rule 3-10 have been met.
Debt Instrument
Aggregate principal amount of Senior Secured Notes		$ 600.0

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Balance Sheet Details (Tables)

12 Months Ended

Oct. 27, 2012

Balance Sheet Details [Abstract]

Schedule of Accounts Receivable

	October 27, 2012			October 29, 2011
Accounts Receivable:
Accounts receivable	$	243,731		$	255,540
Allowance for doubtful accounts	(833		)	(1,388		)
Sales allowances	(9,759		)	(5,011		)
Total	$	233,139		$	249,141

Schedule of Inventory

	October 27, 2012		October 29, 2011
Inventories:
Raw materials	$	24,240	$	25,535
Finished goods	43,939		48,637
Total	$	68,179	$	74,172

Schedule of Property, Plant and Equipment

	October 27, 2012			October 29, 2011
Property and equipment, net:
Computer equipment	$	17,953		$	19,310
Software	39,410			35,865
Engineering and other equipment	409,524			357,827
Furniture and fixtures (1)	30,516			29,195
Leasehold improvements	26,306			23,793
Land and building (2)	384,666			384,666
Subtotal	908,375			850,656
Less: Accumulated depreciation and amortization (1), (3)	(389,435		)	(318,272		)
Total	$	518,940		$	532,384

Schedule of Accrued Liabilities

	October 27, 2012		October 29, 2011
Other accrued liabilities:
Income taxes payable	$	15,079	$	12,978
Accrued warranty	14,453		11,298
Inventory purchase commitments	4,271		5,075
Accrued sales programs	24,801		30,651
Accrued interest	12,011		12,829
Others	20,670		21,971
Total	$	91,285	$	94,802

Schedule of Capital Leased Assets

Furniture and fixtures and accumulated depreciation and amortization include the following amounts under leases as of October 27, 2012 and October 29, 2011 (in thousands):

	October 27, 2012			October 29, 2011
Cost	$	10,613		$	10,613
Accumulated depreciation	(3,647		)	(2,131		)
Total	$	6,966		$	8,482

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Borrowings (Narrative) (Details) (USD $)	12 Months Ended						12 Months Ended		12 Months Ended		12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010	Oct. 27, 2012 Senior Secured Notes	Oct. 29, 2011 Senior Secured Notes	Jan. 20, 2010 Senior Secured Notes	Oct. 27, 2012 Senior Secured 2018 Notes	Jan. 20, 2010 Senior Secured 2018 Notes	Oct. 27, 2012 Senior Secured 2020 Notes	Jan. 20, 2010 Senior Secured 2020 Notes	Oct. 27, 2012 Term Loan Facility	Oct. 31, 2008 Term Loan Facility	Oct. 07, 2008 Term Loan Facility	Oct. 27, 2012 Revolving Credit Facility	Oct. 29, 2011 Revolving Credit Facility	Oct. 31, 2008 Revolving Credit Facility	Oct. 07, 2008 Revolving Credit Facility	Oct. 07, 2008 Swing Line Loan Subfacility	Oct. 07, 2008 Letter Of Credit Subfacility
Debt Instrument
Principal amount of Senior Secured Notes						$ 600,000,000		$ 300,000,000		$ 300,000,000
Fair value of senior secured notes				638,000,000	626,000,000
Redemption price, percentage of face value							100.00%		100.00%
Redemption amount of notes, percentage of principal amount				35.00%
Repurchase price of notes in case of change in control, percentage of face value				101.00%
Repurchase price of notes in case of sale of assets, percentage of face value				100.00%
Term of loan												5 years				5 years
Senior secured credit facility, maximum borrowing capacity													1,100,000,000				125,000,000	25,000,000	25,000,000
Maximum Consolidated Senior Secured Leverage Ratio	2
Losses (Gains) on Extinguishment of Debt	0	25,465,000	0
Repayment Towards Principal Of Term Loan											190,000,000
Voluntary prepayments of term loan											170,700,000
Line of Credit Facility, Amount Outstanding														0	0
Line of Credit Facility, Current Borrowing Capacity														$ 125,000,000	$ 125,000,000

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Sale-Leaseback Transaction

12 Months Ended

Oct. 27, 2012

Leases [Abstract]

Sale Leaseback Transaction Disclosure

Sale-Leaseback Transaction

During fiscal year 2010, the Company sold an owned real estate property to an unrelated third party. Net proceeds from this sale were $30.2 million. Concurrent with this sale, the Company entered into an agreement to lease the property back from the purchaser over a minimum lease term of two years. The Company considers this lease as a normal leaseback and classified the lease as an operating lease. An $8.7 million loss on the sale of the property was recognized immediately upon execution of the sale and is recorded within “Gain (loss) on sale of investments and property, net” on the Consolidated Statements of Operations.

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Investments Investments (Tables)

12 Months Ended

Oct. 27, 2012

Investments, Debt and Equity Securities [Abstract]

Available-for-sale Securities

The following table summarizes the Company’s short-term investments (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
October 27, 2012
Corporate bonds	$	—	$	—	$	—	$	—
October 29, 2011
Corporate bonds	$	774	$	—	$	—	$	774

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Loss On Sale Of Subsidiary Loss On Sale Of Subsidiary (Narrative) (Details) (USD $)	12 Months Ended
	Oct. 29, 2011
Discontinued Operations and Disposal Groups [Abstract]
Assets and liabilities held for sale	$ 16,200,000
Intangible assets	11,100,000
Expected loss recognized on disposal	11,100,000
Goodwill written off	1,673,000	[1]
Loss on sale of subsidiary	$ 12,800,000

[1] Goodwill disposed relates to sale of Strategic Business Systems, Inc. (“SBS”), a wholly owned subsidiary, see Note 17, “Loss on Sale of Subsidiary,” of the Notes to Consolidated Financial Statements.

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Guarantor And Non-Guarantor Subsidiaries

12 Months Ended

Oct. 27, 2012

Guarantor And Non-Guarantor Subsidiaries [Abstract]

Guarantor And Non-Guarantor Subsidiaries

Guarantor and Non-Guarantor Subsidiaries

On January 20, 2010, the Company issued in total $600.0 million aggregate principal amount of its senior secured notes. The Company's obligations under the senior secured notes are guaranteed by certain of the Company's domestic subsidiaries (the “Subsidiary Guarantors”). Each of the Subsidiary Guarantors is 100% owned by the Company and all guarantees are joint and several. The senior secured notes are not guaranteed by certain of the Company's domestic subsidiaries and all of the Company’s foreign subsidiaries (the “Non-Guarantor Subsidiaries”).

Pursuant to the terms of the senior secured notes, the guarantees are full and unconditional,but are subject to release under the following circumstances:

• upon the sale of the subsidiary or all or substantially all of its assets;

• upon the discharge of the guarantees under the credit facility or other debt provided that the credit facility has been paid in full and the applicable series of senior secured notes have an investment grade rating from both Standard & Poor's and Moody's;

• upon designation of the subsidiary as an “unrestricted subsidiary” under the applicable Indenture;

• upon the merger, consolidation or liquidation of the subsidiary into another subsidiary guarantor; and

• upon legal or covenant defeasance or the discharge of the Company's obligations under the applicable indenture.

Because the guarantees are subject to release under the above described circumstances, they would not be deemed “full and unconditional” for purposes of Rule 3-10 of Regulation S-X. However, as these circumstances are customary, the Company concluded that it may rely on Rule 3-10 of Regulation S-X, as the other requirements of Rule 3-10 have been met.

The following tables present condensed consolidated financial statements for the parent company, the Subsidiary Guarantors and the Non-Guarantor Subsidiaries, respectively.

The following is the consolidated balance sheet as of October 27, 2012 (in thousands):

	Brocade Communications Systems, Inc.		Subsidiary Guarantors			Non- Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	284,466	$	680		$	428,080	$	—		$	713,226
Accounts receivable, net	150,367		(1,847		)	84,619		—			233,139
Inventories	55,084		—			13,095		—			68,179
Intercompany receivables	—		478,133			—		(478,133		)	—
Other current assets	124,690		514			15,606		225			141,035
Total current assets	614,607		477,480			541,400		(477,908		)	1,155,579
Property and equipment, net	500,530		213			18,197		—			518,940
Investment in subsidiaries	871,157		—			—		(871,157		)	—
Other non-current assets	1,814,729		90,766			1,247		—			1,906,742
Total assets	$	3,801,023	$	568,459		$	560,844	$	(1,349,065	)	$	3,581,261
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	92,661	$	—		$	24,689	$	—		$	117,350
Current portion of long-term debt	2,226		(249		)	—		—			1,977
Intercompany payables	434,981		—			43,152		(478,133		)	—
Other current liabilities	346,959		7,628			136,329		225			491,141
Total current liabilities	876,827		7,379			204,170		(477,908		)	610,468
Long-term debt, net of current portion	599,203		—			—		—			599,203
Other non-current liabilities	89,173		2,429			44,168		—			135,770
Total liabilities	1,565,203		9,808			248,338		(477,908		)	1,345,441
Total stockholders’ equity	2,235,820		558,651			312,506		(871,157		)	2,235,820
Total liabilities and stockholders’ equity	$	3,801,023	$	568,459		$	560,844	$	(1,349,065	)	$	3,581,261

The following is the consolidated balance sheet as of October 29, 2011 (in thousands):

	Brocade Communications Systems, Inc.		Subsidiary Guarantors			Non- Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	101,367	$	2,301		$	311,308	$	—		$	414,976
Accounts receivable, net	157,839		(2,149		)	93,451		—			249,141
Inventories	50,000		—			24,172		—			74,172
Intercompany receivables	—		446,455			—		(446,455		)	—
Other current assets	87,495		805			15,609		2,003			105,912
Total current assets	396,701		447,412			444,540		(444,452		)	844,201
Property and equipment, net	460,347		55,594			16,443		—			532,384
Investment in subsidiaries	1,285,356		—			—		(1,285,356		)	—
Other non-current assets	1,506,086		590,318			1,319		—			2,097,723
Total assets	$	3,648,490	$	1,093,324		$	462,302	$	(1,729,808	)	$	3,474,308
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	85,700	$	376		$	23,395	$	—		$	109,471
Current portion of long-term debt	40,539		—			—		—			40,539
Intercompany payables	377,228		—			69,227		(446,455		)	—
Other current liabilities	276,982		17,261			119,731		2,003			415,977
Total current liabilities	780,449		17,637			212,353		(444,452		)	565,987
Long-term debt, net of current portion	748,904		—			—		—			748,904
Other non-current liabilities	104,999		580			39,700		—			145,279
Total liabilities	1,634,352		18,217			252,053		(444,452		)	1,460,170
Total stockholders’ equity	2,014,138		1,075,107			210,249		(1,285,356		)	2,014,138
Total liabilities and stockholders’ equity	$	3,648,490	$	1,093,324		$	462,302	$	(1,729,808	)	$	3,474,308

The following is the consolidated statement of operations for the fiscal year ended October 27, 2012 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	1,409,705		$	4,685		$	823,380		$	—		$	2,237,770
Intercompany revenues	44,152			—			21,709			(65,861		)	—
Total net revenues	1,453,857			4,685			845,089			(65,861		)	2,237,770
Cost of revenues	559,835			49,935			234,889			10,092			854,751
Intercompany cost of revenues	(35,070		)	—			100,931			(65,861		)	—
Total cost of revenues	524,765			49,935			335,820			(55,769		)	854,751
Gross margin (loss)	929,092			(45,250		)	509,269			(10,092		)	1,383,019
Operating expenses	827,318			56,838			231,226			(10,092		)	1,105,290
Intercompany operating expenses (income)	(138,197		)	(27,319		)	165,516			—			—
Total operating expenses	689,121			29,519			396,742			(10,092		)	1,105,290
Income (loss) from operations	239,971			(74,769		)	112,527			—			277,729
Other income (expense)	(49,470		)	4			(3,862		)	—			(53,328		)
Income (loss) before income tax provision and equity in net earnings (losses) of subsidiaries	190,501			(74,765		)	108,665			—			224,401
Income tax expense	20,432			—			8,788			—			29,220
Equity in net earnings (losses) of subsidiaries	25,112			—			—			(25,112		)	—
Net income (loss)	$	195,181		$	(74,765	)	$	99,877		$	(25,112	)	$	195,181

The following is the consolidated statement of operations for the fiscal year ended October 29, 2011 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	1,285,732		$	27,569		$	834,141		$	—		$	2,147,442
Intercompany revenues	88,063			1,753			35,980			(125,796		)	—
Total net revenues	1,373,795			29,322			870,121			(125,796		)	2,147,442
Cost of revenues	531,162			85,540			233,448			13,758			863,908
Intercompany cost of revenues	(2,263		)	—			128,059			(125,796		)	—
Total cost of revenues	528,899			85,540			361,507			(112,038		)	863,908
Gross margin (loss)	844,896			(56,218		)	508,614			(13,758		)	1,283,534
Operating expenses	821,018			76,645			222,109			(13,758		)	1,106,014
Intercompany operating expenses (income)	(138,789		)	(25,694		)	164,483			—			—
Total operating expenses	682,229			50,951			386,592			(13,758		)	1,106,014
Income (loss) from operations	162,667			(107,169		)	122,022			—			177,520
Other income (expense)	109,902			(7,518		)	(200,476		)	—			(98,092		)
Income (loss) before income tax provision and equity in net earnings (losses) of subsidiaries	272,569			(114,687		)	(78,454		)	—			79,428
Income tax expense	22,115			46			6,657			—			28,818
Equity in net earnings (losses) of subsidiaries	(199,844		)	—			—			199,844			—
Net income (loss)	$	50,610		$	(114,733	)	$	(85,111	)	$	199,844		$	50,610

The following is the consolidated statement of operations for fiscal year ended October 30, 2010 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	1,287,646		$	50,731		$	752,776		$	—		$	2,091,153
Intercompany revenues	102,178			13,954			25,464			(141,596		)	—
Total net revenues	1,389,824			64,685			778,240			(141,596		)	2,091,153
Cost of revenues	529,641			112,477			214,024			3,891			860,033
Intercompany cost of revenues	40,588			—			101,008			(141,596		)	—
Total cost of revenues	570,229			112,477			315,032			(137,705		)	860,033
Gross margin (loss)	819,595			(47,792		)	463,208			(3,891		)	1,231,120
Operating expenses	783,968			63,855			179,357			(3,891		)	1,023,289
Intercompany operating expenses (income)	(167,746		)	(30,349		)	198,095			—			—
Total operating expenses	616,222			33,506			377,452			(3,891		)	1,023,289
Income (loss) from operations	203,373			(81,298		)	85,756			—			207,831
Other expense	(80,276		)	(1,628		)	(18,957		)	—			(100,861		)
Income (loss) before income tax provision and equity in net earnings (losses) of subsidiaries	123,097			(82,926		)	66,799			—			106,970
Income tax expense (benefit)	(20,672		)	1,266			9,853			—			(9,553		)
Equity in net earnings (losses) of subsidiaries	(27,246		)	—			—			27,246			—
Net income (loss)	$	116,523		$	(84,192	)	$	56,946		27,246			$	116,523

The following is the consolidated statement of cash flows for the fiscal year ended October 27, 2012 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments		Total
Net cash provided by (used in) operating activities	$	464,097		$	(1,799	)	$	128,572		$	—	$	590,870
Cash flows from investing activities:
Proceeds from sale of subsidiary	35			—			—			—		35
Proceeds from maturities and sale of short-term investments	—			952			—			—		952
Purchases of property and equipment	(62,791		)	—			(10,006		)	—		(72,797		)
Net cash provided by (used in) investing activities	(62,756		)	952			(10,006		)	—		(71,810		)
Cash flows from financing activities:
Payment of principal related to the term loan	(190,000		)	—			—			—		(190,000		)
Payment of principal related to capital leases	(1,866		)	—			—			—		(1,866		)
Common stock repurchases	(130,209		)	—			—			—		(130,209		)
Proceeds from issuance of common stock	98,791			—			—			—		98,791
Excess tax benefits from stock-based compensation	5,042			—			99			—		5,141
Net cash provided by (used in) financing activities	(218,242		)	—			99			—		(218,143		)
Effect of exchange rate fluctuations on cash and cash equivalents	—			—			(1,893		)	—		(1,893		)
Net increase (decrease) in cash and cash equivalents	183,099			(847		)	116,772			—		299,024
Cash and cash equivalents, beginning of period	101,367			1,527			311,308			—		414,202
Cash and cash equivalents, end of period	$	284,466		$	680		$	428,080		$	—	$	713,226

The following is the consolidated statement of cash flows for the fiscal year ended October 29, 2011 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments		Total
Net cash provided (used) by operating activities	$	436,714		$	(5,852	)	$	18,370		$	—	$	449,232
Cash flows from investing activities:
Purchases of short-term investments	—			(38		)	—			—		(38		)
Proceeds from maturities and sale of short-term investments	—			1,604			—			—		1,604
Purchases of property and equipment	(86,447		)	(33		)	(10,317		)	—		(96,797		)
Proceeds from sale of subsidiary	4,966			(1,061		)	—			—		3,905
Net cash provided by (used in) investing activities	(81,481		)	472			(10,317		)	—		(91,326		)
Cash flows from financing activities:
Payment of principal related to the term loan	(359,898		)	—			—			—		(359,898		)
Payment of fees related to the term loan	(1,167		)	—			—			—		(1,167		)
Proceeds from term loan	198,950			—			—			—		198,950
Payment of principal related to capital leases	(1,761		)	—			—			—		(1,761		)
Common stock repurchases	(210,698		)	—			—			—		(210,698		)
Proceeds from issuance of common stock	97,152			—			—			—		97,152
Excess tax benefits from stock-based compensation	101			—			211			—		312
Net cash provided by (used in) financing activities	(277,321		)	—			211			—		(277,110		)
Effect of exchange rate fluctuations on cash and cash equivalents	—			—			(578		)	—		(578		)
Net increase (decrease) in cash and cash equivalents	77,912			(5,380		)	7,686			—		80,218
Cash and cash equivalents, beginning of period	23,455			6,907			303,622			—		333,984
Cash and cash equivalents, end of period	$	101,367		$	1,527		$	311,308		$	—	$	414,202

The following is the consolidated statement of cash flows for the fiscal year ended October 30, 2010 (in thousands):

	Brocade Communications Systems, Inc.			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Consolidating Adjustments		Total
Net cash provided by operating activities	$	71,094		$	169,986		$	57,433		$	—	$	298,513
Cash flows from investing activities:
Purchases of short-term investments	—			(53		)	—			—		(53		)
Purchases of non-marketable minority equity investments	(200		)	—			—			—		(200		)
Proceeds from maturities and sale of short-term investments	—			3,255			—			—		3,255
Proceeds from sale of property	30,185			—			—			—		30,185
Purchases of property and equipment	(196,193		)	471			(5,899		)	—		(201,621		)
Net cash provided by (used in) investing activities	(166,208		)	3,673			(5,899		)	—		(168,434		)
Cash flows from financing activities:
Payment of debt issuance costs related to the senior secured notes	(3,666		)	—			—			—		(3,666		)
Payment of principal related to the revolving credit facility	(14,050		)	—			—			—		(14,050		)
Payment of principal related to the convertible subordinated debt	—			(172,500		)	—			—		(172,500		)
Payment of principal related to the term loan	(583,029		)	—			—			—		(583,029		)
Payment of principal related to capital leases	(1,173		)	—			—			—		(1,173		)
Common stock repurchases	(25,004		)	—			—			—		(25,004		)
Proceeds from senior secured notes	587,968			—			—			—		587,968
Proceeds from issuance of common stock	81,593			—			—			—		81,593
Excess tax benefits from stock-based compensation	1,420			—			741			—		2,161
Net cash provided by (used in) financing activities	44,059			(172,500		)	741			—		(127,700		)
Effect of exchange rate fluctuations on cash and cash equivalents	—			—			(2,588		)	—		(2,588		)
Net increase (decrease) in cash and cash equivalents	(51,055		)	1,159			49,687			—		(209		)
Cash and cash equivalents, beginning of period	74,510			5,748			253,935			—		334,193
Cash and cash equivalents, end of period	$	23,455		$	6,907		$	303,622		$	—	$	333,984

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Commitments And Contingencies Commitments And Contingencies (Schedule of Rent Expense) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Operating Leases, Rent Expense, Net [Abstract]
Rent expense	$ 25,867	$ 26,576	$ 35,781
Sublease income	(6,606)	(5,643)	(4,762)
Rent Expense, Net	$ 19,261	$ 20,933	$ 31,019

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Basis Of Presentation

12 Months Ended

Oct. 27, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis Of Presentation

Basis of Presentation

Brocade Communications Systems, Inc. (“Brocade” or the “Company”) is a leading supplier of networking equipment, including Internet Protocol (“IP”) based Ethernet networking solutions and Storage Area Networking (“SAN”) solutions for businesses and organizations of many types and sizes, including global enterprises, and service providers such as telecommunication firms, cable operators and mobile carriers. Brocade’s products, services and solutions simplify information technology (“IT”) infrastructure, increase resource utilization, ensure availability of mission critical applications, and support key IT services including Internet connectivity, enterprise mobility, virtualization, and cloud computing.

The fiscal year for the Company is the 52 or 53 weeks ending on the last Saturday in October. As is customary for companies that use the 52/53-week convention, every fifth year contains a 53-week year. Fiscal years 2012, 2011 and 2010 were 52-week fiscal years. The Company’s next 53-week fiscal year will be fiscal year 2014 and its next 14-week quarter will be in the second quarter of fiscal year 2014.

The Consolidated Financial Statements include the accounts of Brocade and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates in Preparation of Consolidated Financial Statements

The preparation of consolidated financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to sales allowances and programs, allowance for doubtful accounts, stock-based compensation, purchase price allocations, warranty obligations, inventory valuation and purchase commitments, restructuring costs, commissions, facilities lease losses, impairment of goodwill and intangible assets, litigation, income taxes and investments. Actual results may differ materially from these estimates.

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Oct. 27, 2012	Oct. 29, 2011
Current assets:
Cash and cash equivalents	$ 713,226	$ 414,202
Short-term investments	0	774
Total cash, cash equivalents and short-term investments	713,226	414,976
Accounts receivable, net of allowances	233,139	249,141
Inventories	68,179	74,172
Deferred tax assets	91,539	53,604
Prepaid expenses and other current assets	49,496	52,308
Total current assets	1,155,579	844,201
Property and equipment, net	518,940	532,384
Goodwill	1,624,089	1,630,967
Intangible assets, net	109,265	214,697
Non-current deferred tax assets	136,175	210,028
Other assets	37,213	42,031
Total assets	3,581,261	3,474,308
Current liabilities:
Accounts payable	117,350	109,471
Accrued employee compensation	182,597	118,298
Deferred revenue	216,283	201,421
Current liabilities associated with facilities lease losses	976	1,456
Current portion of long-term debt	1,977	40,539
Other accrued liabilities	91,285	94,802
Total current liabilities	610,468	565,987
Long-term debt, net of current portion	599,203	748,904
Non-current liabilities associated with facilities lease losses	1,606	2,496
Non-current deferred revenue	76,907	69,024
Non-current income tax liability	47,370	63,593
Other non-current liabilities	9,887	10,166
Total liabilities	1,345,441	1,460,170
Commitments and contingencies (Note 9)
Stockholders' equity:
Preferred stock	0	0
Common stock
Issued and outstanding	457	448
Additional paid-in capital	2,009,190	1,984,830
Accumulated other comprehensive loss	(9,864)	(11,996)
Retained earnings	236,037	40,856
Total stockholders' equity	2,235,820	2,014,138
Total liabilities and stockholders' equity	$ 3,581,261	$ 3,474,308

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Employee Compensation Plans

12 Months Ended

Oct. 27, 2012

Employee Service Share-based Compensation, Aggregate Disclosures [Abstract]

Compensation and Employee Benefit Plans

Employee Compensation Plans

In April 2009, the stockholders of Brocade approved the Company’s 2009 Stock Plan, 2009 Director Plan and 2009 Employee Stock Purchase Plan (“2009 ESPP”), and such plans are now part of the Company’s equity compensation plans. The Company’s 1999 Stock Plan, 1999 Director Option Plan and 1999 Employee Stock Purchase Plan each expired in March 2009 by their terms.

In April 2012, the stockholders of Brocade approved an amendment and restatement of the Company's 2009 Stock Plan and 2009 ESPP to increase the plans' share reserves by 35.0 million and 30.0 million shares, respectively.

2009 Stock Plan

The 2009 Stock Plan provides for the grant of stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and performance shares, and other stock or cash awards to employees, directors and consultants. Per the terms of the 2009 Stock Plan, as amended, 83.0 million shares of the Company’s common stock are reserved for issuance under the plan, plus the following:

• Any shares subject to stock options or similar awards granted under the Company’s 1999 Stock Plan, 1999 Nonstatutory Stock Option Plan (“NSO Plan”) and 2001 McDATA Equity Incentive Plan that expire or otherwise terminate without having been exercised in full; and

• Shares issued pursuant to awards granted under the Company’s 1999 Stock Plan, 1999 NSO Plan and 2001 McDATA Equity Incentive Plan that are forfeited to or repurchased by the Company, with the maximum number of shares to be added to the 2009 Stock Plan pursuant to this clause equal to 40.3 million shares.

2009 Director Plan

The 2009 Director Plan provides for the grant of stock options and restricted stock units to non-employee directors of the Company. The Board of Directors has reserved 2.0 million shares of the Company’s common stock for issuance under the 2009 Director Plan, plus any shares subject to stock options or similar awards granted under the Company’s 1999 Director Option Plan that expire or otherwise terminate without having been exercised in full, and shares issued pursuant to awards granted under the Company’s 1999 Director Option Plan that are forfeited to or repurchased by the Company, with the maximum number of shares to be added to the 2009 Director Plan pursuant to this clause equal to 0.9 million shares.

2009 Employee Stock Purchase Plan

The 2009 ESPP permits eligible employees to purchase shares of the Company’s common stock through payroll deductions for up to 15% of qualified compensation during the offering period. The purchase price is 85% of the lesser of the fair market value of the Company’s common stock on (i) the first trading day of the offering period, or (ii) the last day of each six-month purchase period; provided, however, that the purchase price for subsequent offering periods may be determined by the administrator, subject to compliance with the terms of the 2009 ESPP. A total of 65.0 million shares of the Company’s common stock are reserved for issuance under the 2009 ESPP, as amended. The 2009 ESPP is implemented through consecutive, overlapping offering periods of up to approximately twenty-four months. The offering periods generally start with the first trading day on or after June 1 and December 1 each year and end on the last trading day in the periods ending twenty-four months later, unless the fair market value of the Company’s common stock on the last day of a purchase period is lower than the fair market value of the Company’s common stock on the first trading day of the offering period, in which case the offering period will end early, immediately after the purchase period, and a new offering period will commence on or about such date. Each offering period will be divided into four purchase periods of approximately six months in length. Eligible employees may purchase no more than 3,750 shares of the Company’s common stock during each six-month purchase period. As of October 27, 2012, 38.7 million shares were available for issuance under the 2009 ESPP.

Equity Compensation Plans

The Company may grant stock options, restricted stock awards and restricted stock units for shares of the Company’s common stock and other types of equity compensation awards to its employees and directors under the various equity compensation plans described above. In accordance with the terms of the 2009 Stock Plan and the 2009 Director Plan, each award granted with an exercise price that is less than fair market value, which includes all grants of restricted stock awards, restricted stock units, performance shares and performance units, will count against the applicable plan’s share reserve as 1.56 shares for every one share subject to such award. In addition, the exercise price of stock options and stock appreciation rights granted under the 2009 Stock Plan must be at least equal to the fair market value of the Company’s common stock on the date of grant and the exercise price of incentive stock options granted to any participant who owns more than 10% of the total voting power of all classes of the Company’s outstanding stock must be at least 110% of the fair market value of the Company’s common stock on the date of grant.

The term of a stock option and a stock appreciation right may not exceed seven years, except that, with respect to any participant who owns 10% of the voting power of all classes of the Company’s outstanding capital stock, the term of an incentive stock option may not exceed five years. The majority of the stock options, restricted stock awards and restricted stock units granted under the Company’s equity compensation plans vest over a period of three to four years. Certain options and awards granted under the 2009 Stock Plan vest over shorter or longer periods.

At October 27, 2012, approximately 126.7 million shares were authorized for future issuance under the Company’s equity compensation plans, which include stock options, shares to be issued pursuant to the 2009 ESPP, restricted stock units and other awards, and shares of Brocade common stock that became issuable in connection with the assumption or substitution of Foundry equity awards. A total of 76.0 million shares of common stock were available for grant under the Company’s equity compensation plans as of October 27, 2012. At October 29, 2011, approximately 100.6 million shares were authorized for future issuance under the Company’s equity compensation plans, which include stock options, shares to be issued pursuant to the 2009 ESPP, restricted stock units and other awards, and shares of Brocade common stock that became issuable in connection with the assumption or substitution of Foundry equity awards. A total of 26.5 million shares of common stock were available for grant under the Company’s equity compensation plans as of October 29, 2011. Awards that expire, or are canceled without delivery of shares, generally become available for issuance under the Company’s equity compensation plans.

1999 Nonstatutory Stock Option Plan

In September 1999, the Board of Directors approved the Company’s 1999 NSO Plan. The 1999 NSO Plan provides for the grant of nonstatutory stock options to employees and consultants. A total of 51.4 million shares of the Company’s common stock have been reserved for issuance under the 1999 NSO Plan. As of October 27, 2012, the Company has reserved 5.2 million shares of authorized but unissued shares of common stock for future issuance upon exercise of options under the 1999 NSO Plan.

McDATA Equity Plans

On January 29, 2007, effective upon the consummation of the merger, Brocade assumed the McDATA equity plans. As of October 27, 2012, options to purchase approximately 1.6 million shares of converted common stock, restricted stock and other equity awards remained outstanding under former McDATA equity plans.

Employee 401(k) Plan

The Company sponsors the Brocade Communications Systems, Inc. 401(k) Plan (“401(k) Plan”), which qualifies under Section 401(k) of the Internal Revenue Code and is designed to provide retirement benefits for its eligible employees through tax-deferred salary deductions.

Employees may elect to contribute up to 60% of their eligible compensation to the 401(k) Plan. Employee contributions are limited to a maximum annual amount as set periodically by the Internal Revenue Service (“IRS”). The Company matches employee contributions dollar for dollar up to a maximum of $3,000 per calendar year per person. All matching contributions vest immediately. The Company’s matching contributions to the 401(k) Plan totaled $9.1 million, $9.3 million and $8.7 million for the years ended October 27, 2012, October 29, 2011 and October 30, 2010, respectively.

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Subsequent Events Subsequent Events (Narrative) (Details) (USD $) In Millions, unless otherwise specified	2 Months Ended
	Dec. 14, 2012
Deferred tax asset impairment
Subsequent Event
Subsequent Event, Date	Nov. 06, 2012
Subsequent Event, Description	On November 6, 2012, California voters approved California Proposition 39 which revised certain provisions of the California State Tax Code, requiring mandatory single sales factor apportionment in California for most multi-state taxpayers for tax years beginning on or after January 1, 2013. Brocade currently expects that in fiscal year 2013 and beyond, Brocade's income subject to tax in California will be lower than under prior tax law and that Brocade's California deferred tax assets are, therefore, less likely to be realized. As a result, during the first quarter of fiscal year 2013, Brocade will record a charge of up to $78.0 million to reduce its previously recognized California deferred tax assets. This charge will not impact cash tax outlays and conformance to the new California apportionment rules is not expected to have a material impact on Brocade's future tax provision.
Subsequent Event, Amount, Higher range of charge	$ 78.0
Vyatta acquisition
Subsequent Event
Subsequent Event, Date	Nov. 09, 2012
Subsequent Event, Description	On November 9, 2012, Brocade paid $45.0 million and completed its acquisition of Vyatta Inc. (“Vyatta”), the developer of software-based network operating system that is relevant for multiple applications in network virtualization, software-defined networking (“SDN”) and private/public cloud computing platforms, which became a wholly owned subsidiary of Brocade. This acquisition complements Brocade investments in Ethernet fabrics and SDN, and enables Brocade to pursue new market opportunities in data center virtualization, public cloud, enterprise virtual private cloud, and managed services. Due to the limited time since the acquisition date, the initial accounting and purchase price allocation for this acquisition is incomplete as of December 14, 2012. Brocade does not consider the acquisition of Vyatta to be material to its results of operations and is therefore not presenting pro-forma financial information of combined operations.
Subsequent Event, Amount paid	$ 45.0
Subsequent Event, Amount Inestimable	Due to the limited time since the acquisition date, the initial accounting and purchase price allocation for this acquisition is incomplete as of December 14, 2012. Brocade does not consider the acquisition of Vyatta to be material to its results of operations and is therefore not presenting pro-forma financial information of combined operations.

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Segment Information (Schedule Of Financial Information By Reportable Segment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Oct. 27, 2012	Jul. 28, 2012	Apr. 28, 2012	Jan. 28, 2012	Oct. 29, 2011	Jul. 30, 2011	Apr. 30, 2011	Jan. 29, 2011	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Segment Reporting Information [Line Items]
Net revenues	$ 578,357	$ 555,332	$ 543,439	$ 560,642	$ 550,472	$ 502,850	$ 548,364	$ 545,756	$ 2,237,770	$ 2,147,442	$ 2,091,153
Cost of revenues									854,751	863,908	860,033
Gross margin	360,690	340,478	337,082	344,769	327,515	306,527	328,609	320,883	1,383,019	1,283,534	1,231,120
SAN Products
Segment Reporting Information [Line Items]
Net revenues									1,356,099	1,237,994	1,240,626
Cost of revenues									362,608	356,013	394,506
Gross margin									993,491	881,981	846,120
IP Networking Products
Segment Reporting Information [Line Items]
Net revenues									534,757	551,820	488,188
Cost of revenues									327,248	321,183	288,980
Gross margin									207,509	230,637	199,208
Global Services
Segment Reporting Information [Line Items]
Net revenues									346,914	357,628	362,339
Cost of revenues									164,895	186,712	176,547
Gross margin									$ 182,019	$ 170,916	$ 185,792

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Income Taxes Income Taxes (Summary of Income Tax Contingencies) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns
Unrecognized tax benefits, beginning balance	$ 149,430	$ 136,812
Gross increases for tax positions taken in prior periods	797	9,066
Gross decreases for tax positions taken in prior periods	(26,001)	(1,730)
Gross increases for tax positions taken in current period	6,633	9,601
Changes due to settlements with taxing authorities	(6,771)	(1,051)
Reductions resulting from lapses of statutes of limitations	(4,835)	(3,268)
Unrecognized tax benefits, ending balance	$ 119,253	$ 149,430

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Document And Entity Information (USD $)	12 Months Ended
	Oct. 27, 2012	Dec. 07, 2012	Apr. 28, 2012
Entity Information [Line Items]
Entity Registrant Name	BROCADE COMMUNICATIONS SYSTEMS INC
Entity Central Index Key	0001009626
Current Fiscal Year End Date	--10-27
Entity Filer Category	Large Accelerated Filer
Document Type	10-K
Document Period End Date	Oct. 27, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		456,174,616
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 2,521,950,135

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Stock-Based Compensation

12 Months Ended

Oct. 27, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Equity Compensation Plan Information

The following table summarizes information with respect to shares of the Company’s common stock that may be issued under the Company’s existing equity compensation plans as of October 27, 2012 (in thousands, except per share amounts):

Plan Category	A Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		B Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		C Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excludes Securities Reflected in Column A)
Equity compensation plans approved by stockholders (1)	23,561	(3)	$	5.52	76,048	(4)
Equity compensation plans not approved by stockholders (2)	5,936	(5)	$	5.06	—
Total	29,497		$	5.43	76,048

(1) Primarily consist of the 2009 ESPP, the 2009 and 1999 Director Plans and the 2009 and 1999 Stock Plans.

(2) Consist solely of the 1999 NSO Plan described in Note 11, “Employee Compensation Plans,” of the Notes to Consolidated Financial Statements and Foundry’s 2000 NSO Plan, which was assumed in connection with our acquisition of Foundry.

(3) Amount excludes purchase rights accrued under the 2009 ESPP. As of October 27, 2012, the 2009 ESPP had a stockholder-approved reserve of 65.0 million shares, of which 38.7 million shares were available for future issuance.

(4) Amount consists of shares available for future issuance under the 2009 ESPP, the 2009 Director Plan and the 2009 Stock Plan.

(5) Substantially all shares were granted prior to the fiscal year ended October 25, 2003. Information relating to equity compensation plans is set forth in Note 11, “Employee Compensation Plans,” of the Notes to Consolidated Financial Statements.

Stock-based compensation expense, net of estimated forfeitures, was included in the following line items on the Consolidated Statements of Operations as follows (in thousands):

	Fiscal Year Ended October 27, 2012		Fiscal Year Ended October 29, 2011		Fiscal Year Ended October 30, 2010
Cost of revenues	$	15,433	$	15,607	$	13,552
Research and development	17,952		18,959		27,795
Sales and marketing	33,257		36,068		45,232
General and administrative	10,527		12,442		15,046
Total stock-based compensation	$	77,169	$	83,076	$	101,625

The following table presents stock-based compensation expense, net of estimated forfeitures, by grant type (in thousands):

	Fiscal Year Ended October 27, 2012		Fiscal Year Ended October 29, 2011		Fiscal Year Ended October 30, 2010
Stock options, including variable options	$	1,079	$	3,483	$	12,383
Restricted stock awards and restricted stock units (“RSUs”)	56,791		55,750		55,580
Employee stock purchase plan (“ESPP”)	19,299		23,843		33,662
Total stock-based compensation	$	77,169	$	83,076	$	101,625

The following table presents unrecognized compensation expense, net of estimated forfeitures, of the Company’s equity compensation plans as of October 27, 2012, which is expected to be recognized over the following weighted-average periods, (in thousands, except for weighted-average period):

	Unrecognized Compensation Expense		Weighted- Average Period (in years)
Stock options	$	635	0.54
RSUs	$	95,152	2.01
ESPP	$	16,737	1.11

Stock Options

The fair value of each option granted during the respective period is estimated on the date of grant using the Black-Scholes valuation model and the assumptions noted in the following table. The dividend yield reflects that Brocade has not paid any cash dividends since inception and does not anticipate paying cash dividends in the foreseeable future. The risk-free interest rate is based on the implied yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected term of the option. The expected volatility is based on an equal weighted-average of implied volatilities from traded options of the Company’s common stock and historical volatility of the Company’s common stock. The expected term is based on historical exercise behavior.

	Fiscal Year Ended
Stock Options	October 27, 2012		October 29, 2011		October 30, 2010
Expected dividend yield	0.0	%	0.0	%	0.0	%
Risk-free interest rate	0.1 - 0.8%		0.1 - 0.6%		0.3 - 2.0%
Expected volatility	48.8 - 56.5%		50.3 - 61.9%		49.3 - 53.3%
Expected term (in years)	4.0		4.0		4.0

Compensation expense computed under the fair value method for stock options issued is being amortized under a graded vesting method over the options’ vesting period. A summary of stock option activity under the equity compensation plans for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 is presented as follows:

	Shares (in  thousands)		Weighted-Average Exercise Price		Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at October 31, 2009	89,647		$	5.04			3.17	$	380,991
Granted	1,920		6.76		$	2.89
Exercised	(14,210	)	2.95					51,700
Forfeited or expired	(5,691	)	13.68
Outstanding at October 30, 2010	71,666		4.82				2.58	146,199
Granted	243		5.47		$	2.23
Exercised	(16,814	)	3.48					46,047
Forfeited or expired	(4,330	)	9.03
Outstanding at October 29, 2011	50,765		4.91				1.98	35,494
Granted	160		5.55		$	2.39
Exercised	(16,993	)	3.39					36,498
Forfeited or expired	(4,435	)	7.34
Outstanding at October 27, 2012	29,497		5.43				1.61	26,077
Vested and expected to vest at October 27, 2012	29,518		$	5.42			1.60	$	26,076
Exercisable and vested at:
October 27, 2012	28,591		$	5.40			1.51	$	25,985

From May 1999 through July 2003, the Company granted 98.8 million options subject to variable accounting as the measurement date of the options granted was not certain. As of October 27, 2012, 0.1 million options with a weighted-average exercise price of $4.85 and a weighted-average contractual life of 0.41 years remain outstanding and continue to be accounted for under variable accounting.

Employee Stock Purchase Plan

Under Brocade’s employee stock purchase plans, including the 2009 ESPP and the 1999 Employee Stock Purchase Plan (together, the “Brocade ESPP”), eligible employees can participate and purchase shares semi-annually at the lower of 85% of the fair market value of the Company’s common stock on (i) the first trading day of the offering period, or (ii) the last day of each six-month purchase period. The Brocade ESPP permits eligible employees to purchase common stock through payroll deductions for up to 15% of qualified compensation. The Company accounts for the Brocade ESPP as a compensatory plan and compensation expense is being amortized under a graded vesting method over the twenty-four month offering period. In addition, the Company accounts for changes in percentage contribution elected by employees, as well as decreases in the Company’s common stock price on the last day of each six-month purchase period as compared to the common stock price on the first trading day of the offering period, by applying modification accounting which results in an increase in compensation expense during the period of modification.

The fair value of the option component of Brocade ESPP shares was estimated using the Black-Scholes option pricing model using the following weighted-average assumptions:

	Fiscal Year Ended
Employee Stock Purchase Plan	October 27, 2012		October 29, 2011		October 30, 2010
Expected dividend yield	0.0	%	0.0	%	0.0	%
Risk-free interest rate	0.2	%	0.6	%	0.6	%
Expected volatility	52.5	%	65.5	%	67.8	%
Expected term (in years)	1.5		1.1		1.5

Restricted Stock Units

A summary of the changes in restricted stock units outstanding under Brocade’s equity compensation plans during the years ended October 27, 2012, October 29, 2011 and October 30, 2010 is presented as follows:

	Shares (in  thousands)		Weighted-Average Grant Date  Fair Value
Nonvested at October 31, 2009	32,693		$	4.37
Granted	10,801		5.84
Vested	(12,753	)	5.26
Forfeited	(2,570	)	6.74
Nonvested at October 30, 2010	28,171		4.32
Granted	12,754		5.68
Vested	(13,434	)	5.82
Forfeited	(4,010	)	6.37
Nonvested at October 29, 2011	23,481		3.85
Granted	11,166		4.97
Vested	(9,597	)	4.82
Forfeited	(3,054	)	5.92
Nonvested at October 27, 2012	21,996		3.71
Vested and expected to vest at October 27, 2012	20,277		$	3.71

Typically, vesting of restricted stock units occurs over one to four years and is subject to the employee’s continuing service to Brocade.

The aggregate intrinsic value of restricted stock units outstanding at October 27, 2012, October 29, 2011 and October 30, 2010 was $106.1 million, $105.9 million and $178.9 million, respectively.

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Stock-Based Compensation (Stock-Based Compensation Expense Included In Line Items Of Consolidated Statements Of Operations) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Total stock-based compensation	$ 77,169	$ 83,076	$ 101,625
Cost of revenues
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Total stock-based compensation	15,433	15,607	13,552
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Total stock-based compensation	17,952	18,959	27,795
Sales and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Total stock-based compensation	33,257	36,068	45,232
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs
Total stock-based compensation	$ 10,527	$ 12,442	$ 15,046

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Income Taxes Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 27, 2012	Oct. 29, 2011
Deferred Tax Assets, Gross
Net operating loss carry forwards	$ 63,750	$ 132,765
Stock-based compensation expense	22,582	28,886
Tax credit carry forwards	145,688	141,209
Reserves and accruals	94,755	104,135
Capitalized research and development expenditures	3,232	8,475
Net unrealized losses on investments	468	330
Gross deferred tax assets	330,475	415,800
Valuation allowance	(22,269)	(22,566)
Total deferred tax assets	308,206	393,234
Deferred Tax Liabilities
Acquired intangibles and goodwill	(50,266)	(92,481)
Fixed assets	(28,110)	(34,992)
Other	(2,116)	(2,129)
Total deferred tax liabilities	(80,492)	(129,602)
Deferred Tax Assets (Liabilities), Net
Total net deferred tax assets	$ 227,714	$ 263,632

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Oct. 27, 2012	Oct. 29, 2011
Statement of Financial Position [Abstract]
Accounts receivable, allowances	$ 833	$ 1,388
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000	5,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	800,000	800,000
Common stock, shares issued	456,913	448,022
Common stock, shares outstanding	456,913	448,022

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Investments

12 Months Ended

Oct. 27, 2012

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

The following table summarizes the Company’s short-term investments (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
October 27, 2012
Corporate bonds	$	—	$	—	$	—	$	—
October 29, 2011
Corporate bonds	$	774	$	—	$	—	$	774

Net unrealized holding gains or losses on investments, if any, are included in accumulated other comprehensive loss in the accompanying Consolidated Balance Sheets.

The carrying value of the Company’s equity investments in non-publicly traded companies at October 27, 2012 and October 29, 2011 was $7.0 million and $7.0 million, respectively.

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Balance Sheet Details

12 Months Ended

Oct. 27, 2012

Balance Sheet Details [Abstract]

Balance Sheet Details

Balance Sheet Details

The following tables provides details of selected balance sheet items (in thousands):

	October 27, 2012			October 29, 2011
Accounts Receivable:
Accounts receivable	$	243,731		$	255,540
Allowance for doubtful accounts	(833		)	(1,388		)
Sales allowances	(9,759		)	(5,011		)
Total	$	233,139		$	249,141

	October 27, 2012		October 29, 2011
Inventories:
Raw materials	$	24,240	$	25,535
Finished goods	43,939		48,637
Total	$	68,179	$	74,172

	October 27, 2012			October 29, 2011
Property and equipment, net:
Computer equipment	$	17,953		$	19,310
Software	39,410			35,865
Engineering and other equipment	409,524			357,827
Furniture and fixtures (1)	30,516			29,195
Leasehold improvements	26,306			23,793
Land and building (2)	384,666			384,666
Subtotal	908,375			850,656
Less: Accumulated depreciation and amortization (1), (3)	(389,435		)	(318,272		)
Total	$	518,940		$	532,384

	October 27, 2012		October 29, 2011
Other accrued liabilities:
Income taxes payable	$	15,079	$	12,978
Accrued warranty	14,453		11,298
Inventory purchase commitments	4,271		5,075
Accrued sales programs	24,801		30,651
Accrued interest	12,011		12,829
Others	20,670		21,971
Total	$	91,285	$	94,802

(1) Furniture and fixtures and accumulated depreciation and amortization include the following amounts under leases as of October 27, 2012 and October 29, 2011 (in thousands):

	October 27, 2012			October 29, 2011
Cost	$	10,613		$	10,613
Accumulated depreciation	(3,647		)	(2,131		)
Total	$	6,966		$	8,482

(2) In connection with the purchase of the property located in San Jose, California, the Company obtained a four-year option to purchase a fourth unimproved approximate four acre parcel for a fixed price of approximately $26.0 million as well as a right of first offer to purchase this parcel. The Company elected to not exercise the option and it terminated in November 2011. As of October 27, 2012, the Company retained the right of first offer.

(3) The following table presents the depreciation of property and equipment included on the Consolidated Statements of Operations (in thousands):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Depreciation expense	$	86,785	$	88,150	$	72,765

Trade Receivables Factoring Facility

In April 2010, the Company entered into a trade receivables factoring facility with a financial institution to sell certain of its trade receivables from customers with limited, non-credit related, recourse provisions. The sale of receivables eliminates the credit exposure of the Company in relation to these receivables. Under the terms of the factoring agreement, the maximum available amount of the factoring facility outstanding at any one time is $50.0 million, which is subject to change based on the financial institution’s approval. During the fiscal years ended October 27, 2012 and October 29, 2011, none and $50.5 million, respectively, of trade receivables were sold under the terms of the factoring facility. Sales of trade receivables are recorded as a reduction of trade accounts receivable. The discounts on the sale of receivables for the fiscal year ended October 29, 2011 were immaterial and are included in “Other expense, net” on the Consolidated Statement of Operations. Facility administration fees for the fiscal years ended October 27, 2012 and October 29, 2011 were immaterial and are included in “General and administrative expenses” on the Consolidated Statements of Operations.

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Loss On Sale Of Subsidiary

12 Months Ended

Oct. 27, 2012

Discontinued Operations and Disposal Groups [Abstract]

Loss On Sale Of Subsidiary

Loss on Sale of Subsidiary

In August 2011, the Company committed to a plan to exit a portion of its Global Services business through the sale of SBS, its wholly-owned subsidiary and signed a Stock Purchase Agreement to sell SBS to investors led by the former Managing Director of SBS. The sale was completed in September 2011 to enable the Company’s Global Services organization to focus on the execution of strategic and core offerings such as support and service for the Company’s products as well as professional consulting.

SBS’s assets and liabilities were classified as held for sale in the fourth quarter of fiscal year 2011 as a result of the Company’s commitment and actions. The net carrying amount of SBS’s assets and liabilities classified as held for sale was $16.2 million, comprising primarily of intangible assets of $11.1 million. Upon classifying the SBS assets as held for sale, the Company recognized an expected loss on disposal of $11.1 million, reducing the carrying amount of its SBS intangible assets to their fair value less costs to sell. Additionally, when the sale was completed, the Company wrote off $1.7 million of the associated Global Services goodwill resulting in a total loss of $12.8 million which is presented in the Company’s consolidated statement of operations as “Loss on sale of subsidiary.”

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Income Taxes

12 Months Ended

Oct. 27, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The domestic and international components of income (loss) before provision for (benefit from) income taxes for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 are presented as follows (in thousands):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011 (1)			October 30, 2010
United States	$	115,736	$	(42,118	)	$	36,015
International	108,665		121,546			70,955
Total	$	224,401	$	79,428		$	106,970

(1) Excludes the impact of repatriation of $200 million from offshore operations to the United States.

The income tax provision (benefit) for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 consisted of the following (in thousands):

	Fiscal Year Ended
	October 27, 2012			October 29, 2011			October 30, 2010
U.S. federal taxes:
Current	$	(11,750	)	$	774		$	(30,768	)
Deferred	33,981			28,111			19,390
Total U.S. federal taxes	22,231			28,885			(11,378		)
State taxes:
Current	613			1,250			4,282
Deferred	(2,412		)	(9,187		)	(10,506		)
Total state taxes	(1,799		)	(7,937		)	(6,224		)
Non-U.S. taxes:
Current	8,770			7,854			8,964
Deferred	18			16			(915		)
Total non-U.S. taxes	8,788			7,870			8,049
Total	$	29,220		$	28,818		$	(9,553	)

The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 consisted of the following:

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
U.S. federal statutory income tax rate	35.0	%	35.0	%	35.0	%
State taxes, net of federal tax benefit	3.8		3.3		4.0
Foreign income taxed at other than U.S. rates	(17.7	)	(48.2	)	(32.6	)
Stock-based compensation	3.5		11.8		12.6
Research and development credit	(3.5	)	(17.6	)	(10.4	)
Permanent items	0.3		1.2		0.9
Change in liabilities for uncertain tax positions	(6.5	)	2.5		(29.0	)
Repatriation from offshore operations	—		62.6		—
Audit settlement and reinstated tax credit	(2.9	)	(11.7	)	10.2
Other	1.0		(2.6	)	0.4
Effective tax rate	13.0	%	36.3	%	(8.9	)%

The effective tax rate in fiscal year 2012 is lower than the 35% U.S. federal statutory rate primarily due to earnings in our subsidiaries outside of the U.S. in jurisdictions where our effective tax rate is lower than in the U.S. Earnings of our subsidiaries outside of the U.S. primarily relate to our European and Asia Pacific businesses, which are headquartered in Switzerland. In the fourth fiscal quarter of 2011, we repatriated $200 million from our offshore operations, with which we repurchased approximately 46.5 million shares of our Company’s stock. The Company recorded tax expense of $49.7 million related to this one-time cash repatriation to fund the stock repurchase program. As of October 27, 2012, U.S. federal income taxes and foreign withholding taxes were not provided for on an estimated cumulative total of $370.5 million of undistributed earnings of the Company’s foreign subsidiaries. The Company intends to reinvest current and accumulated earnings of its foreign subsidiaries for expansion of its business operations outside the United States for an indefinite period of time. Our existing cash, cash equivalents and short-term investments totaled $713.2 million as of October 27, 2012. Of this amount, approximately 60% was held by our foreign subsidiaries. If these earnings were distributed to the United States in the form of dividends or otherwise, or if the shares of the relevant foreign subsidiaries were sold or otherwise transferred, the Company could be subject to additional U.S. income taxes, net of foreign tax credits, and foreign withholding taxes. Determination of the amount of unrecognized deferred income tax liability related to these earnings is not practicable.

The components of deferred tax assets and deferred tax liabilities for the years ended October 27, 2012 and October 29, 2011 are presented as follows (in thousands):

	October 27, 2012			October 29, 2011
Net operating loss carry forwards	$	63,750		$	132,765
Stock-based compensation expense	22,582			28,886
Tax credit carry forwards	145,688			141,209
Reserves and accruals	94,755			104,135
Capitalized research and development expenditures	3,232			8,475
Net unrealized losses on investments	468			330
Gross deferred tax assets	330,475			415,800
Less: Valuation allowance	(22,269		)	(22,566		)
Total deferred tax assets	308,206			393,234
Acquired intangibles and goodwill	(50,266		)	(92,481		)
Fixed assets	(28,110		)	(34,992		)
Other	(2,116		)	(2,129		)
Total deferred tax liabilities	(80,492		)	(129,602		)
Total net deferred tax assets	$	227,714		$	263,632

As of October 27, 2012, the Company believed that sufficient positive evidence existed from historical operations and projections of taxable income in future years to conclude that it was more likely than not that the Company will realize its deferred tax assets. Accordingly, the Company applied a valuation allowance only on the deferred tax assets relating to capital loss carryforwards, due to limited carryforward periods and the character of such tax attributes.

On November 6, 2012, California voters approved California Proposition 39. Proposition 39 affects future California state income tax apportionment that may have a significant negative impact on the Company’s ability to realize certain California deferred tax assets. See Note 19, “Subsequent Events,” of the Notes to Consolidated Financial Statements for more detail about the effect on the Company's financial statements.

As of October 27, 2012, the Company had federal net operating loss carryforwards of $603.1 million, California state net operating loss carryforwards of $71.4 million and other significant state net operating loss carryforwards of approximately $165.5 million. Additionally, the Company had $127.2 million of federal tax credits and $149.8 million of state tax credits. The federal net operating loss and other tax credit carryforwards expire on various dates between fiscal year 2013 through 2032. The state net operating loss and credit carryforwards expire on various dates between fiscal year 2013 through 2032. Under the current tax law, net operating loss and credit carryforwards available to offset future income in any given year may be limited by statute or upon the occurrence of certain events, including significant changes in ownership interests.

As a result of the McDATA and Foundry acquisitions, all the tax attributes from both companies are subject to an annual limitation, but the Company expects to use all the tax attributes before expiration.

The Company applies a recognition threshold and measurement attribute for the financial statement recognition and measurement of an income tax position taken or expected to be taken on a tax return. Recognition of a tax position is determined when it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority.

A reconciliation of the beginning and ending amount of total gross unrecognized tax benefits, excluding accrued net interest and penalties, is as follows (in thousands):

	October 27, 2012			October 29, 2011
Unrecognized tax benefits, beginning balance	$	149,430		$	136,812
Gross increases for tax positions taken in prior periods	797			9,066
Gross decreases for tax positions taken in prior periods	(26,001		)	(1,730		)
Gross increases for tax positions taken in current period	6,633			9,601
Changes due to settlements with taxing authorities	(6,771		)	(1,051		)
Reductions resulting from lapses of statutes of limitations	(4,835		)	(3,268		)
Unrecognized tax benefits, ending balance	$	119,253		$	149,430

As of October 27, 2012, the Company had net unrecognized tax benefits of $105.2 million, all of which, if recognized, would result in a reduction of the Company’s effective tax rate.

In general, the Company’s provision for income taxes differs from the tax computed at the U.S. federal statutory income tax rate due to state taxes, the effect of non-U.S. operations, non-deductible stock-based compensation expense and adjustments to unrecognized tax benefits.

For the fiscal year ended October 27, 2012, the Company recorded an income tax expense of $29.2 million. The tax reported was impacted by the effect of a decrease in benefit from the federal research and development tax credit which expired on December 31, 2011, offset by discrete benefits from reserve releases of settled tax audits, and the expiration of certain statutes of limitations.

For the fiscal year ended October 29, 2011, the Company recorded an income tax expense of $28.8 million. The tax reported was primarily as a result of cash repatriated from our foreign subsidiary and foreign tax expenses, offset by discrete benefits from the retroactive reinstatement of the federal research and development tax credit provision, reserve releases of settled tax audits, and the expiration of certain statutes of limitations.

The Internal Revenue Service (“IRS”) and other tax authorities regularly examine the Company’s income tax returns. The IRS is currently examining fiscal years 2009 and 2010. In addition, the IRS has also examined the Company’s income tax returns for fiscal years 2007 and 2008, and in May 2011, the Company received the IRS Revenue Agent’s Report. The IRS is contesting the Company’s transfer pricing for the cost sharing and buy-in arrangements with its foreign subsidiaries. The IRS’ proposed adjustment would offset approximately $317.4 million of the Company’s net operating loss carryforwards. The Company has filed a protest to appeal the amount of proposed adjustments in the Revenue Agent’s Report with the Appeals Office of the IRS. The Company believes it has sufficient reserves recorded for the ultimate settlement amount on this issue. Furthermore, the Company is in negotiations with foreign tax authorities to obtain correlative relief on transfer pricing adjustments settled with the IRS. We believe that our reserves for unrecognized tax benefits are adequate for all open tax years. The timing of the resolution of income tax examinations, as well as the amounts and timing of related settlements, is highly uncertain. The Company believes that before the end of fiscal year 2013, it is reasonably possible that either certain audits will conclude or the statutes of limitations relating to certain income tax examination periods will expire, or both. As such, after we reach settlement with the tax authorities, we expect to record a corresponding adjustment to our unrecognized tax benefits. Given the uncertainty as to settlement terms, the timing of payments and the impact of such settlements on other uncertain tax positions, the range of estimated potential decreases in underlying uncertain tax positions is between $0 and $24 million in the next twelve months.

The Company classifies interest and penalties related to unrecognized tax benefits as a component of income tax expense. During the fiscal year ended October 27, 2012, the Company expensed $0.5 million for net interest and penalties related to income tax liabilities through income tax expense. The total net interest and penalties accrued as of October 27, 2012 was $2.4 million. During the year ended October 29, 2011, the Company expensed $0.4 million for net interest and penalties related to income tax liabilities through income tax expense. The total net interest and penalties accrued as of October 29, 2011 was $3.4 million.

Of the total tax benefits (detriments) resulting from the exercise of employee stock options and employee participation in the Company’s equity compensation plans, the amounts recorded to stockholders’ equity were approximately $(4.8) million in fiscal year 2012, $(5.2) million in fiscal year 2011 and $2.2 million in fiscal year 2010.

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Stock-Based Compensation Stock-Based Compensation (Schedule of Share-based Compensation, Stock Options, Activity) (Details) (Stock options, USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Oct. 27, 2012 years	Oct. 29, 2011 years	Oct. 30, 2010 years	Oct. 31, 2009 years
Stock options
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding
Stock options, Beginning balance	50,765	71,666	89,647
Stock options, Granted	160	243	1,920
Stock options, Exercised	(16,993)	(16,814)	(14,210)
Stock options, Forfeited or expired	(4,435)	(4,330)	(5,691)
Stock options, Ending balance	29,497	50,765	71,666
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures
Weighted Average Exercise Price, Stock options, Beginning balance	$ 4.91	$ 4.82	$ 5.04
Weighted Average Exercise Price, Stock options, Granted	$ 5.55	$ 5.47	$ 6.76
Weighted Average Exercise Price, Stock options, Exercised	$ 3.39	$ 3.48	$ 2.95
Weighted Average Exercise Price, Stock options, Forfeited or expired	$ 7.34	$ 9.03	$ 13.68
Weighted Average Exercise Price, Stock options, Ending balance	$ 5.43	$ 4.91	$ 4.82
Aggregate intrinsic value, Stock options, Outstanding	$ 26,077	$ 35,494	$ 146,199	$ 380,991
Aggregate intrinsic value, Stock options, Exercised	36,498	46,047	51,700
Weighted-average grant date fair value	$ 2.39	$ 2.23	$ 2.89
Weighted average remaining contractual term, Stock options, Outstanding	1.61	1.98	2.58	3.17
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest
Vested and expected to vest, Stock options, Outstanding	29,518
Vested and expected to vest, Stock options, Weighted average exercise price	$ 5.42
Vested and expected to vest, Stock options, Weighted average remaining contractual term	1.6
Vested and expected to vest, Stock options, Outstanding, Aggregate intrinsic value	26,076
Exercisable and vested, Stock options, Outstanding	28,591
Exercisable and vested, Stock options, Weighted average exercise price	$ 5.40
Exercisable and vested, Stock options, Weighted average remaining contractual term	1.51
Exercisable and vested, Stock options, Outstanding, Aggregate intrinsic value	$ 25,985

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Commitments And Contingencies

12 Months Ended

Oct. 27, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

Commitments and Contingencies

Operating Leases

The Company leases certain facilities and certain equipment under various operating agreements expiring through March 2021. In connection with its facilities lease agreements, the Company has signed unconditional, irrevocable letters of credit totaling $0.2 million as security for the leases.

The following table presents the composition of net rent expense included on the Consolidated Statements of Operations (in thousands):

	Fiscal Year Ended
	October 27, 2012			October 29, 2011			October 30, 2010
Rent expense	$	25,867		$	26,576		$	35,781
Less: Sublease income	(6,606		)	(5,643		)	(4,762		)
	$	19,261		$	20,933		$	31,019

Future minimum lease payments under all non-cancelable operating leases as of October 27, 2012, excluding the contractual sublease income of $28.7 million, are as follows (in thousands):

Fiscal Year	Operating Leases
2013	$	22,471
2014	18,577
2015	15,311
2016	13,807
2017	5,638
Thereafter	6,585
Total minimum lease payments	$	82,389

Capital Lease Obligations

Future minimum lease payments under all non-cancelable capital leases as of October 27, 2012 are as follows (in thousands):

Fiscal Year	Capital Leases
2013	$	2,221
2014	2,221
2015	862
2016	—
Total minimum lease payments	5,304
Less: Amount representing interest	(388		)
Present value of net minimum lease payments	$	4,916

Product Warranties

The Company’s accrued liability for estimated future warranty costs is included in “Other accrued liabilities” in the accompanying Consolidated Balance Sheets. The following table summarizes the activity related to the Company’s accrued liability for estimated future warranty costs during the fiscal years ended October 27, 2012 and October 29, 2011 (in thousands):

	Accrued Warranty
	Twelve Months Ended
	October 27, 2012			October 29, 2011
Beginning balance	$	11,298		$	5,980
Liabilities accrued for warranties issued during the period	5,929			8,388
Warranty claims paid and used during the period	(575		)	(1,394		)
Changes in liability for pre-existing warranties during the period	(2,199		)	(1,676		)
Ending balance	$	14,453		$	11,298

In addition, the Company has standard defense and indemnification clauses contained within its various customer contracts. As such, the Company indemnifies the parties to whom it sells its products with respect to the Company’s product, alone or potentially in combination with others, infringing upon any patents, trademarks, copyrights, or trade secrets, as well as against bodily injury or damage to real or tangible personal property caused by a defective Company product. As of October 27, 2012, Brocade was not aware of any events or circumstances that have resulted in a material customer contract-related indemnification liability to the Company.

Manufacturing and Purchase Commitments

Brocade has manufacturing arrangements with CMs under which Brocade provides twelve-month product forecasts and places purchase orders in advance of the scheduled delivery of products to Brocade’s customers. The required lead time for placing orders with the CMs depends on the specific product. Brocade issues purchase orders and the CMs then generate invoices based on prices and payment terms mutually agreed upon and set forth in those purchase orders. Although the purchase orders Brocade places with its CMs are cancellable, the terms of the agreements require Brocade to purchase all inventory components not returnable, usable by, or sold to other customers of the CMs.

As of October 27, 2012, the Company’s aggregate commitment to the CMs for inventory components used in the manufacture of Brocade products was $212.0 million, which the Company expects to utilize during future normal ongoing operations, net of a purchase commitments reserve of $4.3 million. The Company’s purchase commitments reserve reflects the Company’s estimate of purchase commitments it does not expect to consume in normal ongoing operations within the next twelve months.

Income Taxes

The Company is subject to several ongoing income tax audits. For additional discussion, see Note 13, “Income Taxes,” of the Notes to Consolidated Financial Statements. The Company believes it has adequate reserves for all open tax years.

Legal Proceedings

Stockholder Litigation

In March 2012, a stockholder filed a complaint in Santa Clara County Superior Court captioned Stephen Knee vs. Brocade Communications Systems, Inc., et al. alleging that the proposal in Brocade’s proxy for its 2012 annual meeting of stockholders seeking additional shares for the 2009 Stock Plan pool was misleading and incomplete; the plaintiff claimed the right to enjoin the stockholders’ vote. In early April 2012, the plaintiff filed a motion for preliminary injunction seeking to enjoin the stockholders’ vote on the proposal. Brocade filed an opposition to the plaintiff’s motion for preliminary injunction. On April 10, 2012, the Court held a hearing and issued an order granting the plaintiff’s motion. On April 12, 2012, the Court entered a stipulation and order regarding settlement in which Brocade agreed to postpone the vote on the proposal at least seven days and to issue supplemental disclosures regarding the proposal. The supplemental disclosures were filed with the SEC on April 12, 2012. Brocade’s stockholders approved the proposal on April 20, 2012. On July 26, 2012, the parties signed a Stipulation of Settlement regarding the matter. On August 10, 2012, plaintiff filed a Motion for Preliminary Approval of Settlement. On December 7, 2012, plaintiff filed a Motion for Final Approval of Settlement. On December 13, 2012, the Court issued a tentative ruling to grant the Motion for Final Approval of Settlement.

Intellectual Property Litigation

On June 21, 2005, Enterasys Networks, Inc. (“Enterasys”) filed a lawsuit against Foundry Networks, LLC (formerly Foundry Networks, Inc.) (“Foundry”) (and Extreme Networks, Inc.) in the United States District Court for the District of Massachusetts alleging that certain of Foundry's products infringe six of Enterasys’ patents and seeking injunctive relief, as well as unspecified damages. The Court severed the claims against Extreme from the claims against Foundry for trial, and Enterasys subsequently added Brocade as a defendant. On August 28, 2007, the Court granted Foundry’s motion to stay the case based on petitions that Foundry had filed with the United States Patent and Trademark Office (“USPTO”) in 2007 for reexamination of five of the six Enterasys patents. Two of the patents received final rejections during their respective reexaminations, in which the USPTO held that the claims were invalid. Enterasys filed appeals of those rejections with the USPTO’s Board of Patent Appeals and Interferences in 2009. The USPTO's Board partially affirmed one and partially reversed the other of those two rejections on January 24, 2011, and Enterasys did not appeal further, which ended the proceedings on those two patents. The USPTO has issued reexamination certificates for the remaining three patents undergoing reexamination indicating that the patents were valid over the references that had been submitted. Meanwhile, on May 21, 2010, the Court lifted the stay of the litigation, and Enterasys subsequently dropped from the litigation the two patents it appealed at the USPTO. Accordingly, four patents remain at issue in the litigation. No trial date has been set.

On September 6, 2006, Chrimar Systems, Inc. (“Chrimar”) filed a lawsuit against Foundry (and D-Link Corporation and PowerDsine, Ltd.) in the United States District Court for the Eastern District of Michigan alleging that certain of Foundry’s products infringe Chrimar’s U.S. Patent 5,406,260 and seeking injunctive relief, as well as unspecified damages. Discovery has been completed. On June 1, 2012, Brocade filed its second Supplemental Statement of Material Facts In Support of the Motion for Summary Judgment of Invalidity of Paradigm Claim 17 of the 5,406,260 patent. On August 1, 2012, the Court issued its Memorandum and Order Granting Defendant’s Motion for Summary Judgment of Invalidity and dismissed the case. On August 30, 2012, Chrimar filed a notice of appeal and on November 5, 2012 filed its appeal brief. The appeal is currently pending in the U.S. Court of Appeals for the Federal Circuit, Case No. 2012-1641.

On August 4, 2010, Brocade and Foundry (“Plaintiffs”) filed a lawsuit against A10 Networks, Inc. (“A10”), A10’s founder and other individuals in the United States District Court for the Northern District of California. On October 29, 2010, Plaintiffs filed an amended complaint. In the amended complaint, Brocade alleged that A10 and the individual defendants have misappropriated Plaintiff’s trade secrets, infringed copyrighted works, interfered with existing contracts between the Plaintiffs and their employees, breached contracts, breached their fiduciary duties and duties of loyalty, and that certain of A10’s products infringe 13 of Brocade’s patents. Brocade is seeking injunctive relief, as well as monetary damages. On May 16, 2011, A10 filed an answer and counterclaim alleging that certain of Brocade’s products infringe a patent recently acquired by A10 and seeking injunctive relief, as well as unspecified damages. In addition, A10 filed petitions with the USPTO to have each of 13 of the patents reexamined, in view of prior art that A10 alleges invalidates the patents. The petitions were granted, and reexaminations of the patents are in progress. On January 6, 2012 the Court granted Brocade’s summary judgment motion of non-infringement of the A10 patent. Trial on Brocade’s claims against A10 and the individual defendants commenced on July 16, 2012. On August 6, 2012, the jury found A10 responsible for intellectual property infringement and unfair competition, awarding approximately $112 million to Brocade. On August 7, 2012, A10 issued a press release that reflected a different interpretation of the jury verdict. A10 has stated that it will take appropriate action to set aside the verdict and reverse the award of damages. A10 also stated that it intends to seek judgment in its favor as a matter of law. On August 27, 2012, the Court entered a judgment in favor of Brocade without commenting on the differing interpretations of the jury verdict or any post-trial motions. On November 8, 2012 the Court heard argument on the post-trial motions, and Brocade expects that the Court will issue its decision in the coming months. The outcome of such motions cannot be predicted with any certainty.

On September 9, 2011, A10 filed a lawsuit against Brocade in the United States District Court for the Northern District of California. A10 alleged that certain of Brocade’s products infringed two patents acquired by A10. After Brocade moved to dismiss the complaint, A10 dismissed one of its patents-in-suit, leaving only one patent at issue. In lieu of answering the complaint, Brocade filed a new motion to dismiss the complaint, which was granted. On June 27, 2012, the Court entered a Final Judgment dismissing A10’s action. A10 has appealed the Judgment, and the appeal is pending before the U.S. Court of Appeals for the Federal Circuit.

General

From time to time, the Company is subject to other legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of trademarks, copyrights, patents and/or other intellectual property rights and commercial contract disputes. Third parties assert patent infringement claims against the Company from time to time in the form of letters, lawsuits and other forms of communication. In addition, from time to time, the Company receives notification from customers claiming that they are entitled to indemnification or other obligations from the Company related to infringement claims made against them by third parties. Litigation, even if the Company is ultimately successful, can be costly and divert management’s attention away from the day-to-day operations of the Company.

On a quarterly basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and, when possible, estimates of reasonably possible losses or ranges of loss based on such reviews. However, litigation is inherently unpredictable, and outcomes are typically uncertain, and the Company’s past experience does not provide any additional visibility or predictability to estimate the range of loss that may occur because the costs, outcome and status of these types of claims and proceedings have varied significantly in the past. The Company is not currently able to reasonably estimate the possible loss or range of loss from the above legal proceedings where the Company is the defendant and, accordingly, the Company is unable to estimate the effects of the above on its financial condition, results of operations or cash flows.

The Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

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Balance Sheet Details (Narratives) (Details) (USD $)	12 Months Ended
	Oct. 27, 2012 acre parcels years	Oct. 29, 2011	Oct. 30, 2010
Balance Sheet Details [Abstract]
Option to purchase unimproved parcel in years	4
Number of parcels of land potentially owned if option exercised	4
Number of acres	4
Fixed price for land purchase option	$ 26,000,000
Depreciation expense	86,785,000	88,150,000	72,765,000
Maximum Available Factoring Facility Outstanding Amount Under The Terms Of The Factoring Agreement	50,000,000
Trade Receivables Sold Under The Terms Of The Factoring Facility During The Reporting Period	$ 0	$ 50,500,000

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Fair Value Measurements

12 Months Ended

Oct. 27, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and also considers assumptions that market participants would use when pricing the asset or liability. The Company applies fair value measurements for both financial and nonfinancial assets and liabilities. The Company has no nonfinancial assets and liabilities that are required to be measured at fair value on a recurring basis as of October 27, 2012.

The fair value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, restricted cash, accounts payable and accrued liabilities, approximate cost because of their short maturities.

The Company did not elect to measure any eligible financial instruments at fair value and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date.

Fair Value Hierarchy

The Company utilizes a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value:

Level 1

Observable inputs that reflect quoted prices in active markets for identical assets or liabilities. Brocade’s assets utilizing Level 1 inputs include money market funds.

Level 2

Inputs that reflect quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in less active markets, or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Brocade’s assets and liabilities utilizing Level 2 inputs include corporate bonds and derivative instruments, respectively.

Level 3

Unobservable inputs that reflect the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. Brocade has no assets or liabilities utilizing Level 3 inputs.

Assets and liabilities measured at fair value on a recurring basis as of October 27, 2012 were as follows (in thousands):

			Fair Value Measurements Using
	Balance as of October 27, 2012		Quoted Prices in Active Markets For Identical Instruments (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds (1)	$	308,960	$	308,960	$	—	$	—
Derivative assets	2,941		—		2,941		—
Total assets measured at fair value	$	311,901	$	308,960	$	2,941	$	—
Liabilities:
Derivative liabilities	$	296	$	—	$	296	$	—
Total liabilities measured at fair value	$	296	$	—	$	296	$	—

(1) Money market funds are reported within “Cash and cash equivalents” on the Consolidated Balance Sheets.

Assets and liabilities measured at fair value on a recurring basis as of October 29, 2011 were as follows (in thousands):

			Fair Value Measurements Using
	Balance as of October 29, 2011		Quoted Prices in Active Markets For Identical Instruments (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds (1)	$	138,959	$	138,959	$	—	$	—
Corporate bonds	774		—		774		—
Derivative assets	$	1,368	$	—	$	1,368	$	—
Total assets measured at fair value	$	141,101	$	138,959	$	2,142	$	—
Liabilities:
Derivative liabilities	$	1,790	$	—	$	1,790	$	—
Total liabilities measured at fair value	$	1,790	$	—	$	1,790	$	—

(1) Money market funds are reported within “Cash and cash equivalents” on the Consolidated Balance Sheets.

The Company uses a midpoint of the highest bid and lowest offering obtained from market makers to value its corporate bonds. The Company uses observable market prices for comparable instruments to value its derivative instruments.

During the fiscal year ended October 27, 2012, the Company had no transfers between levels of the fair value hierarchy of its assets measured at fair value.

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Borrowings

12 Months Ended

Oct. 27, 2012

Debt Disclosure [Abstract]

Borrowings

Borrowings

The following table provides details of the Company's long-term debt (in thousands, except percentages):

					October 27, 2012				October 29, 2011
	Maturity	Stated Annual Interest Rate			Amount		Effective Interest Rate		Amount		Effective Interest Rate
Senior Secured Notes:
2018 Notes	2018		6.625	%	$	300,000	7.05	%	$	300,000	7.05	%
2020 Notes	2020		6.875	%	300,000		7.26	%	300,000		7.26	%
Senior Secured Credit Facility:
Term loan	2014	LIBOR+	2.25	%	—		—	%	190,000		4.41	%
Capital lease obligations	2015		5.80	%	4,916		5.80	%	6,782		5.80	%
Total long-term debt					604,916				796,782
Less:
Unamortized discount					3,736				7,339
Current portion of long-term debt					1,977				40,539
Total long-term debt, net of current portion					$	599,203			$	748,904

Senior Secured Notes

In January 2010, the Company issued $300 million in aggregate principal amount of senior secured notes due 2018 (the “2018 Notes”) and $300 million in aggregate principal amount of senior secured notes due 2020 (the “2020 Notes" and together with the 2018 Notes, the “senior secured notes”). The senior secured notes bear interest payable semi-annually on January 15 and July 15 of each year. No payments were made towards the principal of the senior secured notes during the fiscal years ended October 27, 2012 and October 29, 2011.

As of October 27, 2012 and October 29, 2011, the fair value of the Company’s senior secured notes was approximately $638 million and $626 million, respectively, estimated based on broker trading prices.

On or after January 2013, the Company may redeem all or a part of the 2018 Notes at the redemption prices set forth in the Indenture governing the 2018 Notes (the 2018 Indenture), plus accrued and unpaid interest and special interest, if any, to the applicable redemption date. In addition, at any time prior to January 2013, the Company may, on one or more than one occasion, redeem some or all of the 2018 Notes at any time at a redemption price equal to 100% of the principal amount of the 2018 Notes redeemed, plus a “make-whole” premium determined as of, and accrued and unpaid interest and special interest, if any, to, the applicable redemption date. On or after January 2015, the Company may redeem all or a part of the 2020 Notes at the redemption prices set forth in the Indenture governing the 2020 Notes (the 2020 Indenture), plus accrued and unpaid interest and special interest, if any, to the applicable redemption date. In addition, at any time prior to January 2015, the Company may, on one or more than one occasion, redeem some or all of the 2020 Notes at any time at a redemption price equal to 100% of the principal amount of the 2020 Notes redeemed, plus a “make-whole” premium determined as of, and accrued and unpaid interest and special interest, if any, to the applicable redemption date. At any time prior to January 2013, the Company may also redeem up to 35% of the aggregate principal amount of the 2018 Notes and 2020 Notes, using the proceeds of certain qualified equity offerings, at the redemption prices set forth in the 2018 Indenture and the 2020 Indenture, respectively.

If the Company experiences specified change of control triggering events, it must offer to repurchase the senior secured notes at a repurchase price equal to 101% of the principal amount of the senior secured notes repurchased, plus accrued and unpaid interest and special interest, if any, to the applicable repurchase date. If the Company or its subsidiaries sell assets under certain specified circumstances, the Company must offer to repurchase the senior secured notes at a repurchase price equal to 100% of the principal amount of the senior secured notes repurchased, plus accrued and unpaid interest and special interest, if any, to the applicable repurchase date.

Each of the Indentures contains covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries to:

• pay dividends, make investments or make other restricted payments;

• incur additional indebtedness;

• sell assets;

• enter into transactions with affiliates;

• incur liens;

• permit consensual encumbrances or restrictions on the Company’s restricted subsidiaries’ ability to pay dividends or make certain other payments to the Company;

• consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s or its restricted subsidiaries’ assets; and

• designate subsidiaries as unrestricted.

These covenants are subject to a number of other limitations and exceptions set forth in the Indentures. Each of the Indentures also includes customary events of default, including cross-defaults to other debt of the Company and its subsidiaries. The Company was in compliance with all applicable covenants of the Indentures as of October 27, 2012 and October 29, 2011.

The Company’s obligations under the senior secured notes are guaranteed by certain of the Company’s domestic subsidiaries, see Note 18, “Guarantor and Non-Guarantor Subsidiaries.”

Senior Secured Credit Facility

In October 2008, the Company entered into a credit facility agreement for (i) a five-year $1,100 million term loan facility and (ii) a five-year $125 million revolving credit facility, which includes a $25 million swing line loan sub-facility and a $25 million letter of credit sub-facility (“Senior Secured Credit Facility”).

The credit facility agreement was subsequently amended in January 2010 and June 2011 to, among other things, (i) increase flexibility under certain financial and other covenants, (ii) permit the Company to issue additional senior indebtedness and additional subordinated indebtedness, (iii) permit the Company to sell its accounts receivable and lease receivables, (iv) reduce interest rates on the term loan facility and extend the maturity date of the term loan facility to October 31, 2014, and (v) remove certain restrictions on the repurchase of the Company’s shares, provided the consolidated senior secured leverage ratio is under 2.00:1.00. In accordance with the applicable accounting guidance for debt modification and extinguishment, the Company expensed $25.5 million of debt issuance costs and original issue discount relating to the portion of the term loan that was extinguished by the June 2011 amendment. This expense was reported within “Interest expense” in the Consolidated Statements of Operations for the fiscal year ended October 29, 2011.

During the fiscal year ended October 27, 2012, the Company paid $190.0 million to pay in full the term loan facility, $170.7 million of which were voluntary prepayments.

The Company believes that the carrying value of its Senior Secured Credit Facility approximated its fair value as the interest rate was based on a floating market rate.

The Company may draw additional proceeds from the revolving credit facility in the future for ongoing working capital and other general corporate purposes. There were no principal amounts outstanding under the revolving credit facility and the full $125 million was available for future borrowing under the revolving credit facility as of October 27, 2012 and October 29, 2011.

The credit agreement contains financial covenants that require the Company to maintain a minimum consolidated fixed charge coverage ratio, a maximum consolidated leverage ratio and a maximum consolidated senior secured leverage ratio. The credit agreement also includes customary non-financial covenants (similar in nature to those under the senior secured notes) and customary events of default, including cross-defaults to the Company’s material indebtedness and change of control. The Company was in compliance with all applicable Senior Secured Credit Facility's covenants as of October 27, 2012 and October 29, 2011.

Debt Maturities

As of October 27, 2012, our aggregate debt maturities based on outstanding principal were as follows (in thousands):

Fiscal Year	Principal Balances
2013	$	1,977
2014	2,095
2015	844
2016	—
2017	—
Thereafter	600,000
Total	$	604,916

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Derivative Instruments And Hedging Activities

12 Months Ended

Oct. 27, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments And Hedging Activities

Derivative Instruments and Hedging Activities

In the normal course of business, the Company is exposed to fluctuations in interest rates and the exchange rates associated with foreign currencies. The Company’s primary objective for holding derivative financial instruments is to manage foreign currency exchange rate risk. The Company currently does not enter into derivative instruments to manage credit risk. However, the Company manages its exposure to credit risk through its investment policies. The Company generally enters into derivative transactions with high-credit quality counterparties and, by policy, limits the amount of credit exposure to any one counterparty based on its analysis of that counterparty’s relative credit standing.

The amounts subject to credit risk related to derivative instruments are generally limited to the amounts, if any, by which counterparty’s obligations exceed the Company’s obligations with that counterparty.

Foreign Currency Exchange Rate Risk

A majority of the Company’s revenue, expense and capital purchasing activities is transacted in U.S. dollars. However, the Company is exposed to foreign currency exchange rate risk inherent in conducting business globally in numerous currencies. The Company is primarily exposed to foreign currency fluctuations related to operating expenses denominated in currencies other than the U.S. dollar, of which the most significant to its operations for the fiscal year ended October 27, 2012 were the Chinese yuan, the euro, the Japanese yen, the Indian rupee, the British pound, the Singapore dollar and the Swiss franc. The Company has established a foreign currency risk management program to protect against the volatility of future cash flows caused by changes in foreign currency exchange rates. This program reduces, but does not always entirely eliminate, the impact of foreign currency exchange rate movements. The Company’s foreign currency risk management program includes foreign currency derivatives with cash flow hedge accounting designation that utilizes foreign currency forward and option contracts to hedge exposures to the variability in the U.S. dollar equivalent of anticipated non-U.S. dollar-denominated cash flows. These instruments generally have a maturity of less than one year. For these derivatives, the Company reports the after-tax gain or loss from the effective portion of the hedge as a component of accumulated other comprehensive loss in stockholders’ equity and reclassifies it into earnings in the same period in which the hedged transaction affects earnings. Prior to fiscal year 2011, these gains or losses were included in “Other expenses” on the consolidated statements of operations. Beginning in the first fiscal quarter of 2011, these gains or losses are now presented within “Cost of revenues” and “Operating expenses,” to match the underlying exposure to the related hedge results. Prior period amounts are not material and have not been reclassified.

Net gains (losses) relating to the effective portion of foreign currency derivatives recorded in the consolidated statements of operations are as follows (in thousands):

	Fiscal Year Ended October 27, 2012			Fiscal Year Ended October 29, 2011		Fiscal Year Ended October 30, 2010
Cost of revenues	$	(1,043	)	$	882	$	—
Research and development	(1,094		)	496		—
Sales and marketing	(5,704		)	5,498		—
General and Administrative	(510		)	416		—
Other expenses	—			—		(5,285		)
Total	$	(8,351	)	$	7,292	$	(5,285	)

The net foreign currency exchange gains and losses recorded as part of “Other expenses” were losses of $1.5 million, $0.6 million and $6.6 million for the fiscal years ended October 27, 2012, October 29, 2011 and October 30, 2010, respectively.

Gross unrealized loss positions are recorded within “Other accrued liabilities” and “Other non-current liabilities,” and gross unrealized gain positions are recorded within “Prepaid expenses and other current assets.” As of October 27, 2012, the Company had gross unrealized loss positions of $0.3 million and gross unrealized gain positions of $2.9 million included in “Other accrued liabilities” and “Prepaid expenses and other current assets,” respectively. Effective cash flow hedges are reported as a component of accumulated other comprehensive loss. Ineffective cash flow hedges are included in the Company’s net income as part of “Other expense, net.” The amount recorded on ineffective cash flow hedges was not significant.

Volume of Derivative Activity

Total gross notional amounts, presented by currency, are as follows (in thousands):

	Derivatives Designated as Hedging Instruments				Derivatives Not Designated as Hedging Instruments
In United States Dollars	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Euro	$	43,357	$	57,935	$	—	$	—
British pound	20,499		25,282		—		—
India rupee	16,046		—		—		—
Singapore dollar	12,918		16,136		—		—
Swiss franc	8,575		13,060		—		5,012
Japanese yen	3,776		17,957		12,068		—
Total	$	105,171	$	130,370	$	12,068	$	5,012

The Company utilizes a rolling hedge strategy for the majority of its foreign currency derivative instruments with cash flow hedge accounting designation that hedges exposures to the variability in the U.S. dollar equivalent of anticipated non-U.S. dollar-denominated cash flows. All of the Company’s foreign currency forward contracts are single delivery, which are settled at maturity involving one cash payment exchange.

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Borrowings (Schedule Of Long-Term Debt) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011
Debt Instrument
Long-term Debt	$ 604,916	$ 796,782
Unamortized discount	3,736	7,339
Current portion of long-term debt	1,977	40,539
Total long-term debt, net of current portion	599,203	748,904
Senior Secured 2018 Notes
Debt Instrument
Maturity	2018
Stated annual interest rate	6.625%
Long-term Debt	300,000	300,000
Effective interest rate	7.05%	7.05%
Senior Secured 2020 Notes
Debt Instrument
Maturity	2020
Stated annual interest rate	6.875%
Long-term Debt	300,000	300,000
Effective interest rate	7.26%	7.26%
Term Loan Facility
Debt Instrument
Maturity	2014
Debt Instrument, Description of Variable Rate Basis	LIBOR+
Stated annual interest rate, LIBOR	2.25%
Long-term Debt	0	190,000
Effective interest rate	0.00%	4.41%
Capital Lease Obligations
Debt Instrument
Maturity	2015
Stated annual interest rate	5.80%
Long-term Debt	$ 4,916	$ 6,782
Effective interest rate	5.80%	5.80%

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Stock-Based Compensation (Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity) (Details) (Restricted stock units, USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested
RSUs, Nonvested, Beginning balance	23,481	28,171	32,693
RSUs, Granted	11,166	12,754	10,801
RSUs, Vested	(9,597)	(13,434)	(12,753)
RSUs, Forfeited	(3,054)	(4,010)	(2,570)
RSUs, Nonvested, Ending balance	21,996	23,481	28,171
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures
RSUs, Weighted-Average Grant Date Fair Value, Beginning balance	$ 3.85	$ 4.32	$ 4.37
RSUs, Weighted-Average Grant Date Fair Value, Granted	$ 4.97	$ 5.68	$ 5.84
RSUs, Weighted-Average Grant Date Fair Value, Vested	$ 4.82	$ 5.82	$ 5.26
RSUs, Weighted-Average Grant Date Fair Value, Forfeited	$ 5.92	$ 6.37	$ 6.74
RSUs, Weighted-Average Grant Date Fair Value, Ending balance	$ 3.71	$ 3.85	$ 4.32
Vested and expected to vest, Shares	20,277
Vested and expected to vest, Weighted-Average Grant Date Fair Value	$ 3.71

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Borrowings (Schedule Of Debt Maturities) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 27, 2012
Long-term Debt, by Maturity [Abstract]
2013	$ 1,977
2014	2,095
2015	844
2016	0
2017	0
Thereafter	600,000
Total	$ 604,916

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Guarantor And Non-Guarantor Subsidiaries (Schedule Of Consolidated Statement Of Cash Flows) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	$ 590,870	$ 449,232	$ 298,513
Purchases of short-term investments	0	(38)	(53)
Purchases of non-marketable minority equity investments	0	0	(200)
Proceeds from maturities and sale of short-term investments	952	1,604	3,255
Proceeds from sale of property	0	0	30,185
Proceeds from sale of subsidiary	35	3,905	0
Purchases of property and equipment	(72,797)	(96,797)	(201,621)
Net cash provided by (used in) investing activities	(71,810)	(91,326)	(168,434)
Payment of debt issuance costs related to the senior secured notes	0	0	(3,666)
Payment of principal related to the revolving credit facility	0	0	(14,050)
Payment of principal related to the convertible subordinated debt	0	0	(172,500)
Payment of principal related to the term loan	(190,000)	(359,898)	(583,029)
Payment of fees related to the term loan	0	(1,167)	0
Proceeds from term loan	0	198,950	0
Payment of principal related to capital leases	(1,866)	(1,761)	(1,173)
Common stock repurchases	(130,209)	(210,698)	(25,004)
Proceeds from senior secured notes	0	0	587,968
Proceeds from issuance of common stock	98,791	97,152	81,593
Excess tax benefits (detriments) from stock-based compensation	5,141	312	2,161
Net cash provided by (used in) financing activities	(218,143)	(277,110)	(127,700)
Effect of exchange rate fluctuations on cash and cash equivalents	(1,893)	(578)	(2,588)
Net increase (decrease) in cash and cash equivalents	299,024	80,218	(209)
Cash and cash equivalents, beginning of period	414,202	333,984	334,193
Cash and cash equivalents, end of period	713,226	414,202	333,984
Brocade Communications Systems, Inc. [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	464,097	436,714	71,094
Purchases of short-term investments		0	0
Purchases of non-marketable minority equity investments			(200)
Proceeds from maturities and sale of short-term investments	0	0	0
Proceeds from sale of property			30,185
Proceeds from sale of subsidiary	35	4,966
Purchases of property and equipment	(62,791)	(86,447)	(196,193)
Net cash provided by (used in) investing activities	(62,756)	(81,481)	(166,208)
Payment of debt issuance costs related to the senior secured notes			(3,666)
Payment of principal related to the revolving credit facility			(14,050)
Payment of principal related to the convertible subordinated debt			0
Payment of principal related to the term loan	(190,000)	(359,898)	(583,029)
Payment of fees related to the term loan		(1,167)
Proceeds from term loan		198,950
Payment of principal related to capital leases	(1,866)	(1,761)	(1,173)
Common stock repurchases	(130,209)	(210,698)	(25,004)
Proceeds from senior secured notes			587,968
Proceeds from issuance of common stock	98,791	97,152	81,593
Excess tax benefits (detriments) from stock-based compensation	5,042	101	1,420
Net cash provided by (used in) financing activities	(218,242)	(277,321)	44,059
Effect of exchange rate fluctuations on cash and cash equivalents	0	0	0
Net increase (decrease) in cash and cash equivalents	183,099	77,912	(51,055)
Cash and cash equivalents, beginning of period	101,367	23,455	74,510
Cash and cash equivalents, end of period	284,466	101,367	23,455
Subsidiary Guarantors [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	(1,799)	(5,852)	169,986
Purchases of short-term investments		(38)	(53)
Purchases of non-marketable minority equity investments			0
Proceeds from maturities and sale of short-term investments	952	1,604	3,255
Proceeds from sale of property			0
Proceeds from sale of subsidiary	0	(1,061)
Purchases of property and equipment	0	(33)	471
Net cash provided by (used in) investing activities	952	472	3,673
Payment of debt issuance costs related to the senior secured notes			0
Payment of principal related to the revolving credit facility			0
Payment of principal related to the convertible subordinated debt			(172,500)
Payment of principal related to the term loan	0	0	0
Payment of fees related to the term loan		0
Proceeds from term loan		0
Payment of principal related to capital leases	0	0	0
Common stock repurchases	0	0	0
Proceeds from senior secured notes			0
Proceeds from issuance of common stock	0	0	0
Excess tax benefits (detriments) from stock-based compensation	0	0	0
Net cash provided by (used in) financing activities	0	0	(172,500)
Effect of exchange rate fluctuations on cash and cash equivalents	0	0	0
Net increase (decrease) in cash and cash equivalents	(847)	(5,380)	1,159
Cash and cash equivalents, beginning of period	1,527	6,907	5,748
Cash and cash equivalents, end of period	680	1,527	6,907
Non-Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	128,572	18,370	57,433
Purchases of short-term investments		0	0
Purchases of non-marketable minority equity investments			0
Proceeds from maturities and sale of short-term investments	0	0	0
Proceeds from sale of property			0
Proceeds from sale of subsidiary	0	0
Purchases of property and equipment	(10,006)	(10,317)	(5,899)
Net cash provided by (used in) investing activities	(10,006)	(10,317)	(5,899)
Payment of debt issuance costs related to the senior secured notes			0
Payment of principal related to the revolving credit facility			0
Payment of principal related to the convertible subordinated debt			0
Payment of principal related to the term loan	0	0	0
Payment of fees related to the term loan		0
Proceeds from term loan		0
Payment of principal related to capital leases	0	0	0
Common stock repurchases	0	0	0
Proceeds from senior secured notes			0
Proceeds from issuance of common stock	0	0	0
Excess tax benefits (detriments) from stock-based compensation	99	211	741
Net cash provided by (used in) financing activities	99	211	741
Effect of exchange rate fluctuations on cash and cash equivalents	(1,893)	(578)	(2,588)
Net increase (decrease) in cash and cash equivalents	116,772	7,686	49,687
Cash and cash equivalents, beginning of period	311,308	303,622	253,935
Cash and cash equivalents, end of period	428,080	311,308	303,622
Consolidation, Eliminations [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	0	0	0
Purchases of short-term investments		0	0
Purchases of non-marketable minority equity investments			0
Proceeds from maturities and sale of short-term investments	0	0	0
Proceeds from sale of property			0
Proceeds from sale of subsidiary	0	0
Purchases of property and equipment	0	0	0
Net cash provided by (used in) investing activities	0	0	0
Payment of debt issuance costs related to the senior secured notes			0
Payment of principal related to the revolving credit facility			0
Payment of principal related to the convertible subordinated debt			0
Payment of principal related to the term loan	0	0	0
Payment of fees related to the term loan		0
Proceeds from term loan		0
Payment of principal related to capital leases	0	0	0
Common stock repurchases	0	0	0
Proceeds from senior secured notes			0
Proceeds from issuance of common stock	0	0	0
Excess tax benefits (detriments) from stock-based compensation	0	0	0
Net cash provided by (used in) financing activities	0	0	0
Effect of exchange rate fluctuations on cash and cash equivalents	0	0	0
Net increase (decrease) in cash and cash equivalents	0	0	0
Cash and cash equivalents, beginning of period	0	0	0
Cash and cash equivalents, end of period	$ 0	$ 0	$ 0

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Fair Value Measurements (Schedule Of Assets And Liabilities Measured At Fair Value) (Details) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified	Oct. 27, 2012		Oct. 29, 2011
Assets, Fair Value Disclosure [Abstract]
Money market funds	$ 308,960	[1]	$ 138,959	[1]
Corporate bonds			774
Derivative assets	2,941		1,368
Total assets measured at fair value	311,901		141,101
Liabilities, Fair Value Disclosure [Abstract]
Derivative liabilities	296		1,790
Total liabilities measured at fair value	296		1,790
Quoted Prices In Active Markets For Identical Instruments (Level 1)
Assets, Fair Value Disclosure [Abstract]
Money market funds	308,960	[1]	138,959	[1]
Corporate bonds			0
Derivative assets	0		0
Total assets measured at fair value	308,960		138,959
Liabilities, Fair Value Disclosure [Abstract]
Derivative liabilities	0		0
Total liabilities measured at fair value	0		0
Significant Other Observable Inputs (Level 2)
Assets, Fair Value Disclosure [Abstract]
Money market funds	0	[1]	0	[1]
Corporate bonds			774
Derivative assets	2,941		1,368
Total assets measured at fair value	2,941		2,142
Liabilities, Fair Value Disclosure [Abstract]
Derivative liabilities	296		1,790
Total liabilities measured at fair value	296		1,790
Significant Unobservable Inputs (Level 3)
Assets, Fair Value Disclosure [Abstract]
Money market funds	0	[1]	0	[1]
Corporate bonds			0
Derivative assets	0		0
Total assets measured at fair value	0		0
Liabilities, Fair Value Disclosure [Abstract]
Derivative liabilities	0		0
Total liabilities measured at fair value	$ 0		$ 0

[1] Money market funds are reported within “Cash and cash equivalents” on the Consolidated Balance Sheets.

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Income Taxes (Narrative) (Details) (USD $) Share data in Millions, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Shares Repurchased with Repatriation From Off Shore Operations		46.5
Tax Expense Related To Repatriation From Offshore Operations		$ 49,700,000
Cash, cash equivalents and short-term investments	713,226,000	414,976,000
Percentage of cash and cash equivalents and short term investments held in foreign subsidiaries	60.00%
Operating loss carryforwards, Expiration dates	various dates between fiscal year 2013 through 2032
Tax credit carryforward, Expiration dates	various dates between fiscal year 2013 through 2032
Percentage Of Tax Benefit Realized Upon Ultimate Settlement With Taxing Authority	50.00%
Amount of unrecognized tax benefits that could affect the effect tax rate	105,200,000
Lower range of estimated potential decreases in underlying uncertain tax positions	0
Upper range of estimated potential decreases in underlying uncertain tax positions	24,000,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense	500,000	400,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	2,400,000	3,400,000
Income Tax Expense (Benefit)
Income tax expense (benefit)	29,220,000	28,818,000	(9,553,000)
Foreign undistributed earnings permanent in duration
Deferred tax liability not recognized, Undistributed earnings of the Company's foreign subsidiaries	370,500,000
Internal Revenue Service (IRS)
Operating loss carryforwards	603,100,000
Tax credit carryforward	127,200,000
Adjustment proposed by IRS to reduce operating loss carryforwards		317,400,000
State and Local Jurisdiction
Tax credit carryforward	149,800,000
California State
Operating loss carryforwards	71,400,000
Other States
Operating loss carryforwards	165,500,000
Additional Paid-in Capital
Tax benefit (detriment) from employee stock plans	$ (4,762,000)	$ (5,240,000)	$ 2,161,000

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Liabilities Associated With Facilities Lease Losses (Tables)

12 Months Ended

Oct. 27, 2012

Restructuring and Related Activities [Abstract]

Schedule Of Facilities Lease Loss Reserve

The following table summarizes the activity related to the facilities lease loss reserve, net of expected sublease income (in thousands):

	Lease Loss Reserve
Reserve balance at October 30, 2010	$	9,976
Cash payments on facilities leases	(6,024		)
Reserve balance at October 29, 2011	3,952
Cash payments on facilities leases	(1,334		)
Other adjustments, net	(36		)
Reserve balance at October 27, 2012	$	2,582

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Goodwill And Intangible Assets (Schedule Of Company's Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012 years	Oct. 29, 2011 years
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 700,880	$ 700,880
Accumulated Amortization	591,615	486,183
Net Carrying Value	109,265	214,697
Weighted-Average Remaining Useful Life (in years)	1.16	2.08
Trade Name [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	10,441	10,441
Accumulated Amortization	10,438	10,422
Net Carrying Value	3	19
Weighted-Average Remaining Useful Life (in years)	0.17	1.17
Core/Developed Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	337,858	337,858
Accumulated Amortization	292,083	245,855
Net Carrying Value	45,775	92,003
Weighted-Average Remaining Useful Life (in years)	1.14	2.04
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	352,581	352,581
Accumulated Amortization	289,094	229,906
Net Carrying Value	$ 63,487	$ 122,675
Weighted-Average Remaining Useful Life (in years)	1.16	2.12

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Net Income Per Share

12 Months Ended

Oct. 27, 2012

Earnings Per Share [Abstract]

Net Income Per Share

Net Income per Share

The following table presents the calculation of basic and diluted net income per share (in thousands, except per share amounts):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Basic net income per share
Net income	$	195,181	$	50,610	$	116,523
Weighted-average shares used in computing basic net income per share	456,629		474,259		446,996
Basic net income per share	$	0.43	$	0.11	$	0.26
Diluted net income per share
Net income	$	195,181	$	50,610	$	116,523
Weighted-average shares used in computing basic net income per share	456,629		474,259		446,996
Dilutive potential common shares in the form of stock options	7,846		13,654		22,083
Dilutive potential common shares in the form of other share based awards	7,868		9,117		13,662
Weighted-average shares used in computing diluted net income per share	472,343		497,030		482,741
Diluted net income per share	$	0.41	$	0.10	$	0.24
Antidilutive potential common shares from: (1)
Stock options	16,402		21,905		21,217
Other share based awards	570		3,075		700
Convertible subordinated debt	—		—		3,552

(1) These potential common shares were excluded from diluted net income per share calculation because their effect would have been anti-dilutive.

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Quarterly Summary

12 Months Ended

Oct. 27, 2012

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information [Text Block]

BROCADE COMMUNICATIONS SYSTEMS, INC. QUARTERLY SUMMARY (Unaudited)
	Three Months Ended
	October 27, 2012		July 28, 2012		April 28, 2012		January 28, 2012		October 29, 2011			July 30, 2011		April 30, 2011		January 29, 2011
	(In thousands, except per share and stock price amounts)
Quarterly Data:
Net revenues	$	578,357	$	555,332	$	543,439	$	560,642	$	550,472		$	502,850	$	548,364	$	545,756
Gross margin	$	360,690	$	340,478	$	337,082	$	344,769	$	327,515		$	306,527	$	328,609	$	320,883
Income from operations	$	86,320	$	70,221	$	51,769	$	69,419	$	54,697		$	34,222	$	46,197	$	42,404
Net income (loss)	$	54,001	$	43,300	$	39,296	$	58,584	$	(4,324	)	$	1,937	$	26,079	$	26,918
Per share amounts:
Basic	$	0.12	$	0.09	$	0.09	$	0.13	$	(0.01	)	$	—	$	0.06	$	0.06
Diluted	$	0.11	$	0.09	$	0.08	$	0.12	$	(0.01	)	$	—	$	0.05	$	0.05
Shares used in computing per share amounts:
Basic	459,333		457,147		457,541		452,494		474,975			483,744		473,209		465,108
Diluted	474,213		469,571		476,848		468,738		474,975			509,548		501,511		491,166
Closing prices:
High	$	6.39	$	5.55	$	6.12	$	5.93	$	5.39		$	7.11	$	6.45	$	6.41
Low	$	4.92	$	4.41	$	5.24	$	4.17	$	3.22		$	5.48	$	5.64	$	4.97

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Segment Information Narrative (Details)	12 Months Ended
	Oct. 27, 2012 segments
Segment Reporting [Abstract]
Number of operating segments	4
Number of reportable segments, individually reported	2
Number of operating segments, combined to reporting segment	2

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Summary Of Significant Accounting Policies Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Capitalization of interest cost	$ 0	$ 0	$ 7,755,000
Advertising Expense	$ 17,700,000	$ 12,100,000	$ 7,900,000

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Valuation And Qualifying Accounts Valuation And Qualifying Accounts (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012		Oct. 29, 2011		Oct. 30, 2010
Allowance for doubtful accounts
Valuation and Qualifying Accounts Disclosure
Balance, Beginning of period	$ 1,388		$ 1,838		$ 3,954
Additions charged to revenues	1,482		1,357		0
Deductions	(2,037)	[1]	(1,807)	[1]	(2,116)	[1]
Balance, End of period	833		1,388		1,838
Sales Allowances
Valuation and Qualifying Accounts Disclosure
Balance, Beginning of period	5,011		4,883		8,619
Additions charged to revenues	10,947		9,048		11,811
Deductions	(6,199)	[1]	(8,920)	[1]	(15,547)	[1]
Balance, End of period	$ 9,759		$ 5,011		$ 4,883

[1] (1)Deductions related to the allowance for doubtful accounts and sales allowances represent amounts written off against the allowance and recoveries.

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Stock-Based Compensation (Tables)

12 Months Ended

Oct. 27, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule Of Equity Compensation Plans

The following table summarizes information with respect to shares of the Company’s common stock that may be issued under the Company’s existing equity compensation plans as of October 27, 2012 (in thousands, except per share amounts):

Plan Category	A Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		B Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		C Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excludes Securities Reflected in Column A)
Equity compensation plans approved by stockholders (1)	23,561	(3)	$	5.52	76,048	(4)
Equity compensation plans not approved by stockholders (2)	5,936	(5)	$	5.06	—
Total	29,497		$	5.43	76,048

(1) Primarily consist of the 2009 ESPP, the 2009 and 1999 Director Plans and the 2009 and 1999 Stock Plans.

(2) Consist solely of the 1999 NSO Plan described in Note 11, “Employee Compensation Plans,” of the Notes to Consolidated Financial Statements and Foundry’s 2000 NSO Plan, which was assumed in connection with our acquisition of Foundry.

(3) Amount excludes purchase rights accrued under the 2009 ESPP. As of October 27, 2012, the 2009 ESPP had a stockholder-approved reserve of 65.0 million shares, of which 38.7 million shares were available for future issuance.

(4) Amount consists of shares available for future issuance under the 2009 ESPP, the 2009 Director Plan and the 2009 Stock Plan.

(5) Substantially all shares were granted prior to the fiscal year ended October 25, 2003. Information relating to equity compensation plans is set forth in Note 11, “Employee Compensation Plans,” of the Notes to Consolidated Financial Statements.

Stock-Based Compensation Expense Included In Line Items Of Consolidated Statements Of Operations

Stock-based compensation expense, net of estimated forfeitures, was included in the following line items on the Consolidated Statements of Operations as follows (in thousands):

	Fiscal Year Ended October 27, 2012		Fiscal Year Ended October 29, 2011		Fiscal Year Ended October 30, 2010
Cost of revenues	$	15,433	$	15,607	$	13,552
Research and development	17,952		18,959		27,795
Sales and marketing	33,257		36,068		45,232
General and administrative	10,527		12,442		15,046
Total stock-based compensation	$	77,169	$	83,076	$	101,625

Stock-Based Compensation Expense By Grant Type

The following table presents stock-based compensation expense, net of estimated forfeitures, by grant type (in thousands):

	Fiscal Year Ended October 27, 2012		Fiscal Year Ended October 29, 2011		Fiscal Year Ended October 30, 2010
Stock options, including variable options	$	1,079	$	3,483	$	12,383
Restricted stock awards and restricted stock units (“RSUs”)	56,791		55,750		55,580
Employee stock purchase plan (“ESPP”)	19,299		23,843		33,662
Total stock-based compensation	$	77,169	$	83,076	$	101,625

Stock-Based Compensation, Unrecognized Compensation Expense And Weighted-Average Period

The following table presents unrecognized compensation expense, net of estimated forfeitures, of the Company’s equity compensation plans as of October 27, 2012, which is expected to be recognized over the following weighted-average periods, (in thousands, except for weighted-average period):

	Unrecognized Compensation Expense		Weighted- Average Period (in years)
Stock options	$	635	0.54
RSUs	$	95,152	2.01
ESPP	$	16,737	1.11

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

	Fiscal Year Ended
Stock Options	October 27, 2012		October 29, 2011		October 30, 2010
Expected dividend yield	0.0	%	0.0	%	0.0	%
Risk-free interest rate	0.1 - 0.8%		0.1 - 0.6%		0.3 - 2.0%
Expected volatility	48.8 - 56.5%		50.3 - 61.9%		49.3 - 53.3%
Expected term (in years)	4.0		4.0		4.0

Schedule of Share-based Compensation, Stock Options, Activity

A summary of stock option activity under the equity compensation plans for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 is presented as follows:

	Shares (in  thousands)		Weighted-Average Exercise Price		Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at October 31, 2009	89,647		$	5.04			3.17	$	380,991
Granted	1,920		6.76		$	2.89
Exercised	(14,210	)	2.95					51,700
Forfeited or expired	(5,691	)	13.68
Outstanding at October 30, 2010	71,666		4.82				2.58	146,199
Granted	243		5.47		$	2.23
Exercised	(16,814	)	3.48					46,047
Forfeited or expired	(4,330	)	9.03
Outstanding at October 29, 2011	50,765		4.91				1.98	35,494
Granted	160		5.55		$	2.39
Exercised	(16,993	)	3.39					36,498
Forfeited or expired	(4,435	)	7.34
Outstanding at October 27, 2012	29,497		5.43				1.61	26,077
Vested and expected to vest at October 27, 2012	29,518		$	5.42			1.60	$	26,076
Exercisable and vested at:
October 27, 2012	28,591		$	5.40			1.51	$	25,985

Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions

The fair value of the option component of Brocade ESPP shares was estimated using the Black-Scholes option pricing model using the following weighted-average assumptions:

	Fiscal Year Ended
Employee Stock Purchase Plan	October 27, 2012		October 29, 2011		October 30, 2010
Expected dividend yield	0.0	%	0.0	%	0.0	%
Risk-free interest rate	0.2	%	0.6	%	0.6	%
Expected volatility	52.5	%	65.5	%	67.8	%
Expected term (in years)	1.5		1.1		1.5

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity

A summary of the changes in restricted stock units outstanding under Brocade’s equity compensation plans during the years ended October 27, 2012, October 29, 2011 and October 30, 2010 is presented as follows:

	Shares (in  thousands)		Weighted-Average Grant Date  Fair Value
Nonvested at October 31, 2009	32,693		$	4.37
Granted	10,801		5.84
Vested	(12,753	)	5.26
Forfeited	(2,570	)	6.74
Nonvested at October 30, 2010	28,171		4.32
Granted	12,754		5.68
Vested	(13,434	)	5.82
Forfeited	(4,010	)	6.37
Nonvested at October 29, 2011	23,481		3.85
Granted	11,166		4.97
Vested	(9,597	)	4.82
Forfeited	(3,054	)	5.92
Nonvested at October 27, 2012	21,996		3.71
Vested and expected to vest at October 27, 2012	20,277		$	3.71

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Cash flows from operating activities:
Net income	$ 195,181	$ 50,610	$ 116,523
Adjustments to reconcile net income to net cash provided by operating activities:
Excess tax (benefits) detriments from stock-based compensation	(5,141)	(312)	(2,161)
Depreciation and amortization	192,218	206,352	199,637
Loss on disposal of property and equipment	883	2,325	10,412
Loss on sale of subsidiary	0	12,756	0
Amortization of debt issuance costs and original issue discount	7,788	13,183	21,100
Write-off of debt issuance costs and original issue discount on debt extinguishment	0	25,465	0
Net gains on investments	(179)	(340)	(523)
Provision for doubtful accounts receivable and sales allowances	11,301	9,343	11,811
Non-cash compensation expense	77,169	83,076	101,625
Non-cash facilities lease loss expense (benefit)	0	0	513
Capitalization of interest cost	0	0	(7,755)
Changes in assets and liabilities:
Restricted cash	0	0	12,502
Accounts receivable	4,701	53,561	(39,248)
Inventories	4,656	1,327	(4,657)
Prepaid expenses and other assets	3,987	(1,688)	13,657
Deferred tax assets	1,256	(2,158)	(1,134)
Accounts payable	7,720	(38,917)	(26,421)
Accrued employee compensation	47,679	216	(100,826)
Deferred revenue	22,744	19,579	15,420
Other accrued liabilities	20,277	20,878	(10,731)
Liabilities associated with facilities lease losses	(1,370)	(6,024)	(11,231)
Net cash provided by (used in) operating activities	590,870	449,232	298,513
Cash flows from investing activities:
Purchases of short-term investments	0	(38)	(53)
Purchases of non-marketable minority equity investments	0	0	(200)
Proceeds from maturities and sale of short-term investments	952	1,604	3,255
Purchases of property and equipment	(72,797)	(96,797)	(201,621)
Proceeds from sale of property	0	0	30,185
Proceeds from sale of subsidiary	35	3,905	0
Net cash provided by (used in) investing activities	(71,810)	(91,326)	(168,434)
Cash flows from financing activities:
Payment of fees related to the term loan	0	(1,167)	0
Payment of debt issuance costs related to the senior secured notes	0	0	(3,666)
Payment of principal related to the convertible subordinated debt	0	0	(172,500)
Payment of principal related to the term loan	(190,000)	(359,898)	(583,029)
Payment of principal related to capital leases	(1,866)	(1,761)	(1,173)
Common stock repurchases	(130,209)	(210,698)	(25,004)
Proceeds from senior secured notes	0	0	587,968
Proceeds from issuance of common stock	98,791	97,152	81,593
Proceeds from term loan	0	198,950	0
Payment of principal related to the revolving credit facility	0	0	(14,050)
Excess tax benefits (detriments) from stock-based compensation	5,141	312	2,161
Net cash provided by (used in) financing activities	(218,143)	(277,110)	(127,700)
Effect of Exchange Rate on Cash and Cash Equivalents:
Effect of exchange rate fluctuations on cash and cash equivalents	(1,893)	(578)	(2,588)
Net increase (decrease) in cash and cash equivalents	299,024	80,218	(209)
Cash and cash equivalents, beginning of period	414,202	333,984	334,193
Cash and cash equivalents, end of period	713,226	414,202	333,984
Interest Paid:
Cash paid for interest	44,686	56,576	59,549
Income Taxes Paid:
Cash paid for income taxes	4,999	1,148	8,801
Noncash Investing and Financing Items:
Note assumed on sale of subsidiary	0	1,218	0
Acquisition of property and equipment through capital leases	$ 0	$ 0	$ 9,716

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Income Taxes Income Taxes (Schedule of Components of Income Tax Expense (Benefit)) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Federal Income Tax Expense (Benefit)
Current, U.S. federal taxes	$ (11,750)	$ 774	$ (30,768)
Deferred, U.S. federal taxes	33,981	28,111	19,390
Total U.S. federal taxes	22,231	28,885	(11,378)
State and Local Income Tax Expense (Benefit)
Current, State taxes	613	1,250	4,282
Deferred, State taxes	(2,412)	(9,187)	(10,506)
Total state taxes	(1,799)	(7,937)	(6,224)
Foreign Income Tax Expense (Benefit)
Current, Non-U.S. taxes	8,770	7,854	8,964
Deferred, Non-U.S. taxes	18	16	(915)
Total non-U.S. taxes	8,788	7,870	8,049
Income Tax Expense (Benefit), Continuing Operations	$ 29,220	$ 28,818	$ (9,553)

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Liabilities Associated With Facilities Lease Losses

12 Months Ended

Oct. 27, 2012

Restructuring and Related Activities [Abstract]

Liabilities Associated With Facilities Lease Losses

Liabilities Associated with Facilities Lease Losses

The Company reevaluates its estimates and assumptions on a quarterly basis and makes adjustments to the reserve balance if necessary. The following table summarizes the activity related to the facilities lease loss reserve, net of expected sublease income (in thousands):

	Lease Loss Reserve
Reserve balance at October 30, 2010	$	9,976
Cash payments on facilities leases	(6,024		)
Reserve balance at October 29, 2011	3,952
Cash payments on facilities leases	(1,334		)
Other adjustments, net	(36		)
Reserve balance at October 27, 2012	$	2,582

Cash payments for facilities leases related to the above noted facilities lease losses are expected to be paid over the respective lease terms through fiscal year 2017.

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Balance Sheet Details Balance Sheet Details (Schedule of Accrued Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Oct. 27, 2012	Oct. 29, 2011
Accrued Liabilities, Current [Abstract]
Income taxes payable	$ 15,079	$ 12,978
Accrued warranty	14,453	11,298
Inventory purchase commitments	4,271	5,075
Accrued sales programs	24,801	30,651
Accrued interest	12,011	12,829
Others	20,670	21,971
Total other accrued liabilities	$ 91,285	$ 94,802

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Stock-Based Compensation (Stock-Based Compensation, Unrecognized Compensation Expense And Weighted-Average Period) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Oct. 27, 2012 years
Stock options
Share-based Compensation Arrangement by Share-based Payment Award
Unrecognized Compensation Expense	$ 635
Weighted-Average Period (in years)	0.54
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award
Unrecognized Compensation Expense	95,152
Weighted-Average Period (in years)	2.01
Employee stock purchase plan
Share-based Compensation Arrangement by Share-based Payment Award
Unrecognized Compensation Expense	$ 16,737
Weighted-Average Period (in years)	1.11

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Commitments And Contingencies Commitments And Contingencies (Schedule of Future Minimum Rental Payments for Operating Leases) (Details) (USD $)	Oct. 27, 2012
Operating Leases, Future Minimum Payments Due [Abstract]
2013	$ 22,471,000
2014	18,577,000
2015	15,311,000
2016	13,807,000
2017	5,638,000
Thereafter	6,585,000
Total minimum lease payments	82,389,000
Contractual sublease income	$ 28,700,000

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Valuation And Qualifying Accounts

12 Months Ended

Oct. 27, 2012

Valuation and Qualifying Accounts [Abstract]

Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

Fiscal Years Ended October 27, 2012, October 29, 2011 and October 30, 2010

	Balance at Beginning of Period		Additions Charged to Revenues		Deductions (1)			Balance at End of Period
	(in thousands)
Allowance for doubtful accounts:
2012	$	1,388	$	1,482	$	(2,037	)	$	833
2011	$	1,838	$	1,357	$	(1,807	)	$	1,388
2010	$	3,954	$	—	$	(2,116	)	$	1,838
Sales allowances:
2012	$	5,011	$	10,947	$	(6,199	)	$	9,759
2011	$	4,883	$	9,048	$	(8,920	)	$	5,011
2010	$	8,619	$	11,811	$	(15,547	)	$	4,883

(1 ) Deductions related to the allowance for doubtful accounts and sales allowances represent amounts written off against the allowance and recoveries.

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Commitments And Contingencies (Gain Contingency Narrative) (Details) (A10 Networks [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Oct. 27, 2012	Aug. 06, 2012	Oct. 29, 2010 patents
A10 Networks [Member]
Gain Contingencies [Line Items]
Number of alleged patents infringed and seeking injunctive relief			13
Gain Contingency, Unrecorded Amount		$ 112
Gain Contingency, Description	On August 6, 2012, the jury found A10 responsible for intellectual property infringement and unfair competition, awarding approximately $112 million to Brocade. On August 7, 2012, A10 issued a press release that reflected a different interpretation of the jury verdict. A10 has stated that it will take appropriate action to set aside the verdict and reverse the award of damages. A10 also stated that it intends to seek judgment in its favor as a matter of law. On August 27, 2012, the Court entered a judgment in favor of Brocade without commenting on the differing interpretations of the jury verdict or any post-trial motions. On November 8, 2012 the Court heard argument on the post-trial motions, and Brocade expects that the Court will issue its decision in the coming months. The outcome of such motions cannot be predicted with any certainty.

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Borrowings (Tables)

12 Months Ended

Oct. 27, 2012

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The following table provides details of the Company's long-term debt (in thousands, except percentages):

					October 27, 2012				October 29, 2011
	Maturity	Stated Annual Interest Rate			Amount		Effective Interest Rate		Amount		Effective Interest Rate
Senior Secured Notes:
2018 Notes	2018		6.625	%	$	300,000	7.05	%	$	300,000	7.05	%
2020 Notes	2020		6.875	%	300,000		7.26	%	300,000		7.26	%
Senior Secured Credit Facility:
Term loan	2014	LIBOR+	2.25	%	—		—	%	190,000		4.41	%
Capital lease obligations	2015		5.80	%	4,916		5.80	%	6,782		5.80	%
Total long-term debt					604,916				796,782
Less:
Unamortized discount					3,736				7,339
Current portion of long-term debt					1,977				40,539
Total long-term debt, net of current portion					$	599,203			$	748,904

Schedule Of Debt Maturities

As of October 27, 2012, our aggregate debt maturities based on outstanding principal were as follows (in thousands):

Fiscal Year	Principal Balances
2013	$	1,977
2014	2,095
2015	844
2016	—
2017	—
Thereafter	600,000
Total	$	604,916

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Segment Information

12 Months Ended

Oct. 27, 2012

Segment Reporting [Abstract]

Segment Information

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: Storage Area Networking (“SAN”) Products, formerly referred to as Data Storage Products, and Global Services. The other two operating segments, Ethernet Switching & Internet Protocol (“IP”) Routing and Application Delivery Products (“ADP”), combine to form a third reportable segment: IP Networking Products, formerly referred to as 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:

• SAN 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 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;

• IP Networking Products include Open Systems 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, 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 27, 2012, October 29, 2011 and October 30, 2010 were attributable to its United States operations.

Summarized financial information by reportable segment for the years ended October 27, 2012, October 29, 2011 and October 30, 2010, based on the internal management reporting system, is as follows (in thousands):

	SAN Products		IP Networking Products		Global Services		Total
Fiscal Year Ended October 27, 2012
Net revenues	$	1,356,099	$	534,757	$	346,914	$	2,237,770
Cost of revenues	362,608		327,248		164,895		854,751
Gross margin	$	993,491	$	207,509	$	182,019	$	1,383,019
Fiscal Year Ended October 29, 2011
Net revenues	$	1,237,994	$	551,820	$	357,628	$	2,147,442
Cost of revenues	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	394,506		288,980		176,547		860,033
Gross margin	$	846,120	$	199,208	$	185,792	$	1,231,120

Revenues are attributed to geographic areas based on where the Company’s products are shipped. Geographic revenue and property and equipment information for the years ended October 27, 2012, October 29, 2011 and October 30, 2010 is presented below (in thousands):

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Net revenues:
United States	$	1,414,390	$	1,313,302	$	1,338,262
International
Europe, the Middle East and Africa (1)	493,979		502,999		482,707
Asia Pacific	186,244		212,636		173,243
Japan	99,887		75,542		58,914
Canada, Central and South America	43,270		42,963		38,027
Total international net revenues	823,380		834,140		752,891
Total net revenues	$	2,237,770	$	2,147,442	$	2,091,153

(1) Includes net revenues of $259.2 million, $257.5 million and $254.4 million for the years ended October 27, 2012, October 29, 2011 and October 30, 2010, respectively, relating to the Netherlands.

	Fiscal Year Ended
	October 27, 2012		October 29, 2011		October 30, 2010
Property and equipment, net:
United States	$	500,744	$	515,940	$	524,287
International	18,196		16,444		14,830
Total Property and equipment, net	$	518,940	$	532,384	$	539,117

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Guarantor And Non-Guarantor Subsidiaries (Schedule Of Consolidated Statement Of Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Oct. 27, 2012	Jul. 28, 2012	Apr. 28, 2012	Jan. 28, 2012	Oct. 29, 2011	Jul. 30, 2011	Apr. 30, 2011	Jan. 29, 2011	Oct. 27, 2012	Oct. 29, 2011	Oct. 30, 2010
Condensed Financial Statements, Captions [Line Items]
Revenues									$ 2,237,770	$ 2,147,442	$ 2,091,153
Intercompany revenues									0	0	0
Total net revenues	578,357	555,332	543,439	560,642	550,472	502,850	548,364	545,756	2,237,770	2,147,442	2,091,153
Cost of revenues									854,751	863,908	860,033
Intercompany cost of revenues									0	0	0
Total cost of revenues									854,751	863,908	860,033
Gross margin	360,690	340,478	337,082	344,769	327,515	306,527	328,609	320,883	1,383,019	1,283,534	1,231,120
Operating expenses									1,105,290	1,106,014	1,023,289
Intercompany operating expenses (income)									0	0	0
Total operating expenses									1,105,290	1,106,014	1,023,289
Income (loss) from operations	86,320	70,221	51,769	69,419	54,697	34,222	46,197	42,404	277,729	177,520	207,831
Other income (expense)									(53,328)	(98,092)	(100,861)
Income (loss) before income tax									224,401	79,428	106,970
Income tax expense (benefit)									29,220	28,818	(9,553)
Equity in net earnings (losses) of subsidiaries									0	0	0
Net income (loss)	54,001	43,300	39,296	58,584	(4,324)	1,937	26,079	26,918	195,181	50,610	116,523
Brocade Communications Systems, Inc. [Member]
Condensed Financial Statements, Captions [Line Items]
Revenues									1,409,705	1,285,732	1,287,646
Intercompany revenues									44,152	88,063	102,178
Total net revenues									1,453,857	1,373,795	1,389,824
Cost of revenues									559,835	531,162	529,641
Intercompany cost of revenues									(35,070)	(2,263)	40,588
Total cost of revenues									524,765	528,899	570,229
Gross margin									929,092	844,896	819,595
Operating expenses									827,318	821,018	783,968
Intercompany operating expenses (income)									(138,197)	(138,789)	(167,746)
Total operating expenses									689,121	682,229	616,222
Income (loss) from operations									239,971	162,667	203,373
Other income (expense)									(49,470)	109,902	(80,276)
Income (loss) before income tax									190,501	272,569	123,097
Income tax expense (benefit)									20,432	22,115	(20,672)
Equity in net earnings (losses) of subsidiaries									25,112	(199,844)	(27,246)
Net income (loss)									195,181	50,610	116,523
Subsidiary Guarantors [Member]
Condensed Financial Statements, Captions [Line Items]
Revenues									4,685	27,569	50,731
Intercompany revenues									0	1,753	13,954
Total net revenues									4,685	29,322	64,685
Cost of revenues									49,935	85,540	112,477
Intercompany cost of revenues									0	0	0
Total cost of revenues									49,935	85,540	112,477
Gross margin									(45,250)	(56,218)	(47,792)
Operating expenses									56,838	76,645	63,855
Intercompany operating expenses (income)									(27,319)	(25,694)	(30,349)
Total operating expenses									29,519	50,951	33,506
Income (loss) from operations									(74,769)	(107,169)	(81,298)
Other income (expense)									4	(7,518)	(1,628)
Income (loss) before income tax									(74,765)	(114,687)	(82,926)
Income tax expense (benefit)									0	46	1,266
Equity in net earnings (losses) of subsidiaries									0	0	0
Net income (loss)									(74,765)	(114,733)	(84,192)
Non-Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Revenues									823,380	834,141	752,776
Intercompany revenues									21,709	35,980	25,464
Total net revenues									845,089	870,121	778,240
Cost of revenues									234,889	233,448	214,024
Intercompany cost of revenues									100,931	128,059	101,008
Total cost of revenues									335,820	361,507	315,032
Gross margin									509,269	508,614	463,208
Operating expenses									231,226	222,109	179,357
Intercompany operating expenses (income)									165,516	164,483	198,095
Total operating expenses									396,742	386,592	377,452
Income (loss) from operations									112,527	122,022	85,756
Other income (expense)									(3,862)	(200,476)	(18,957)
Income (loss) before income tax									108,665	(78,454)	66,799
Income tax expense (benefit)									8,788	6,657	9,853
Equity in net earnings (losses) of subsidiaries									0	0	0
Net income (loss)									99,877	(85,111)	56,946
Consolidating Adjustments [Member]
Condensed Financial Statements, Captions [Line Items]
Revenues									0	0	0
Intercompany revenues									(65,861)	(125,796)	(141,596)
Total net revenues									(65,861)	(125,796)	(141,596)
Cost of revenues									10,092	13,758	3,891
Intercompany cost of revenues									(65,861)	(125,796)	(141,596)
Total cost of revenues									(55,769)	(112,038)	(137,705)
Gross margin									(10,092)	(13,758)	(3,891)
Operating expenses									(10,092)	(13,758)	(3,891)
Intercompany operating expenses (income)									0	0	0
Total operating expenses									(10,092)	(13,758)	(3,891)
Income (loss) from operations									0	0	0
Other income (expense)									0	0	0
Income (loss) before income tax									0	0	0
Income tax expense (benefit)									0	0	0
Equity in net earnings (losses) of subsidiaries									(25,112)	199,844	27,246
Net income (loss)									$ (25,112)	$ 199,844	$ 27,246