In our Ethernet business, we generated revenue of $143 million in Q2, down 10% year-over-year due in part to softness in Federal sales and lower average selling prices driven by product mix, competitive pricing pressures as well as a transition to a 2-tier distribution model. The transition in our go-to-market model has also impacted sales execution in the short term.Our Ethernet business quarter-over-quarter benefited from 11% growth in the Enterprise business, but was offset by smaller router orders from our service provider customers after a record Q1. Despite the challenges that exist in our Ethernet business and the competitive environment in the market, we're seeing encouraging results and are taking active steps to position us well for near-term and longer-term success. These include: Accelerating customer adoption of our Ethernet fabrics, we exited Q2 with the global installed base of more than 550 VDX customers that have deployed more than 100,000 ports to date; we've also expanded in our 100-gig Ethernet offering routing business, the segment where we now hold the #2 market share position according to the Dell’Oro Group; strength in our Service Provider business, which is growing 18% year-over-year as we continue to expand and diversify our customer base; and execution of important initiatives in our channel, campus LAN and Ethernet fabric businesses, including 2 executive appointments, which I'll cover in greater detail later.
Brocade Communications Systems Management Discusses Q2 2012 Results - Earnings Call Transcript
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