Cisco lost almost 10 percentage points in overall SAN market share in Q1 while Brocade, its SAN rival, gained 14 percentage points in modular switches and almost four in fixed, according to Dell’Oro Group. Sales declined by a whopping 45% in Q1 compared to Q4, while Brocade’s only slid 6%.

Moreover, the average per port sales price of a Cisco high-end MDS 9500 modular SAN switch dropped 16%, according to Dell’Oro, which noted that typical quarterly price erosion on the platform had been in the low single digits.

Cisco says the Q1 slide is because Brocade got a head-start on the company in migrating users to 8Gbps FibreChannel SANs, and that Brocade has a more expensive upgrade strategy compared to Cisco’s chassis investment protection approach.

“Cisco customers spend less when they upgrade,” says Rajiv Ramaswami, vice president and general manager of the Data Center Switching Technology Group at Cisco, explaining the revenue shortfall and double digit drop in average selling price per port. “The reason for that is we are selling more 4G ports than Brocade. We are earlier in the migration (to 8G). What we expect to see in the next couple of quarters is (more migration to 8G) and that should benefit Cisco.”

Dell’Oro stated that Cisco’s decision to enter into the domain of channel partners HP and IBM with its own servers may have cut off those channels, resulting in the Q1 SAN revenue and share . Cisco says that is not the case.