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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    October 27, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For 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.)   1745 Technology Drive
 San Jose, CA 95110
 (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 RegisteredCommon Stock, $0.001 par value

The NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  þ o o
  Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE
  Form 10-K.




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##### 





BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  FORM 10-K
  INDEX
   
 PagePART IItem 1.


Business


3Item 1A.


Risk Factors


10Item 1B.


Unresolved Staff Comments


22Item 2.


Properties


22Item 3.


Legal Proceedings


22Item 4.


Submission of Matters to a Vote of Security
    Holders


24PART IIItem 5.


Market For Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


24Item 6.


Selected Financial Data


27Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operation


31Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


49Item 8.


Financial Statements and Supplementary Data


51Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


95Item 9A.


Controls and Procedures


95Item 9B.


Other Information


98PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


98Item 11.


Executive Compensation


98Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


98Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


98Item 14.


Principal Accountant Fees and Services


98PART IVItem 15.


Exhibits and Financial Statement Schedules


99Signatures


108EXHIBIT 10.80EXHIBIT 10.102EXHIBIT 10.103EXHIBIT 10.104EXHIBIT 12.1EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1




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Special
    Note Regarding Forward-Looking Statements
  Form 10-K
  
    changes in our relationship with EMC Corporation
    (EMC), International Business Machines Corporation
    (IBM), Hitachi Data Systems (HDS),
    Hewlett-Packard (HP) and our other distribution
    partners and the level of their orders;
    a loss of any of our key OEM customers (and our OEMs key
    customers), distributors, or resellers, a changes in our
    relationship with our large end-user customers and the level of
    their orders, or the loss of any of our key suppliers or our
    contract manufacturers;
    changes in our relationship with our large end-user customers
    and the level of their orders;
    our ability to successfully increase sales of Brocades
    directors, switches, channel extension products, embedded
    software, management software solutions, third party products,
    maintenance and support contracts, and professional services;
    competition in the storage networking and channel extension
    market, including competitive pricing pressures and product
    give-aways, by our competitors such as QLogic Corp., or QLogic,
    Cisco Systems, Inc., or Cisco, Emulex Corporation and other IP
    and multi-protocol switch and software suppliers;
    our ability to expand our product offerings including our
    ability to successfully qualify and ramp sales of new products
    (including higher port density, multi-protocol and intelligent
    network products);
    our ability to continue selling legacy McDATA Corporation
    (McDATA) products and services to end-user customers;
    our ability to partner with other companies and jointly sell
    products, including but not limited to management software with
    Network Appliance, Riverbed, FalconStor and software for blade
    servers with QLogic;
    unexpected engineering costs or delays, additional manufacturing
    and component costs or production delays that we may experience
    in connection with new product development or an inability to
    source products from third party product providers;
    any change in business conditions, our business and sales
    strategy or product development plans, and our ability to
    attract and retain highly skilled individuals;
    any industry or technology changes that cause obsolescence of
    our products or components of those products;
    any material settlement or unfavorable resolution of litigation
    matters involving the Company; and
    other one-time events and other important risks and factors
    disclosed previously and from time to time in our filings with
    the U.S. Securities and Exchange Commission, or SEC,
    including the risk factors discussed in this Annual Report.   2




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PART I
  Item 1.
    Business  General
        (408) 333-8000. Form 10-K, Form 10-Q, Form 8-K 1-800-SEC-0330. http://www.sec.gov.
  Products
    and Services
     3




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Storage
    Networking Solutions
  entry-level 8-port
    File Data
    Management Solutions
    
    Brocade StorageX is an integrated suite of applications designed
    to logically aggregate distributed file data across
    heterogeneous environments, providing administrators with
    policies to better manage and automate distributed file data; 4




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
    Brocade File Lifecycle Manager (FLM), provides a
    powerful way to automatically move files across tiers of storage
    based on company or administrative policies. Brocade FLM helps
    to meet compliance requirements, while driving lower overall
    storage costs;
    Brocade MyView is a resource access management solution that
    provides personalized, secure access to Windows file resources
    across the enterprise, improving data security and compliance
    practices; and
    Brocade UNC Update helps support non-disruptive storage
    migration by accurately reporting and updating interdependent
    references in files.  Server
    Connectivity Solutions
    Brocade
    Services
    Industry
    Initiatives and Standards Development
        Storage
    Networking Environment Interoperability
   5




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Application
    Interoperability
    Education
    and Technical Certification Services
    Distribution
    Model
    
    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 Brocade-authorized
    distributors, systems integrators and VARs. These partners are
    authorized by Brocade to market, sell and support its products
    and services. Some of these partners also sell training and
    other value-added services.    Customers
     6




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Geographic
    Information
    Acquisitions
    and Investments
              Research
    and Development
   7




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Competition
      Manufacturing
   8




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Patents,
    Intellectual Property and Licensing
         9




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Backlog
    Employees
    Item 1A.
    Risk
    Factors  1.
    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.        
    properly define the new products and services;
    timely develop and introduce the new products and services;
    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 OEM partners server and storage products
    and its competitors products; and
    maintain product quality and reliability. 10




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2.
    Brocade
    is currently expanding its product and service offerings in new
    and adjacent markets and Brocades operating results will
    suffer if these initiatives are not successful.          
    developing new customer relationships both with new and existing
    customers;
    expanding Brocades relationships with its existing OEM
    partners and end-users;
    managing different sales cycles;
    hiring qualified personnel with appropriate skill sets on a
    timely basis; and
    establishing effective distribution channels and alternative
    routes to market.    3.
    Increased
    market competition may lead to reduced sales, margins, profits
    and market share.   11




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4.
    Brocades
    revenues will be affected by changes in domestic and
    international information technology spending and overall demand
    for data center solutions.     12




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5.
    Brocade
    depends on OEM partners for a majority of Brocades
    revenues and the loss of any of these OEM partners or a decrease
    in their purchases could significantly reduce Brocades
    revenues and negatively affect Brocades financial
    results.        6.
    Brocades
    failure to successfully manage the transition between its new
    products and its older products may adversely affect
    Brocades financial results.   13




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7.
    Failure
    to manage expansion effectively could seriously harm our
    business, financial condition and prospects.  and/or
  8.
    The
    failure to accurately forecast demand for Brocades
    products or the failure to successfully manage the production of
    Brocades products could negatively affect the supply of
    key components for Brocades products and Brocades
    ability to manufacture and sell Brocades
    products.       14




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9.
    The
    prices of Brocades products have declined in the past and
    Brocade expects the price of Brocades products to continue
    to decline, which could reduce Brocades revenues, gross
    margins and profitability.      10.
    Brocade
    is dependent on sole source and limited source suppliers for
    certain key components, the loss of which may significantly
    impact results of operations.      11.
    Brocade
    has been named as a party to several class action and derivative
    action lawsuits arising from Brocades internal reviews and
    related restatements of Brocades financial statements
    during 2005, and Brocade may be named in additional litigation,
    all of which could require significant management time and
    attention and result in significant additional legal expenses as
    well as result in an unfavorable resolution which would likely
    have a material adverse effect on Brocades business,
    financial condition, results of operations and cash
    flows.   15




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and/or
  12.
    Certain
    former employees of Brocade are subject to ongoing actions by
    the SEC, the Department of Justice, or DOJ, and others, which
    have required, and may continue to require, a significant amount
    of legal expense pursuant to indemnification obligations of
    Brocade, which could adversely affect Brocades results of
    operations and cash flows.    13.
    Brocade
    may not realize the anticipated benefits of past or future
    acquisitions and strategic investments and integration of
    acquired companies or technologies may negatively impact
    Brocades business.    
    difficulties in successfully integrating the acquired businesses;
    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;
    potential loss of key employees;
    inability to retain key customers, distributors, vendors and
    other business partners of the acquired business;
    failure to successfully manage additional remote locations,
    including the additional infrastructure and resources necessary
    to support and integrate such locations;
    assumption of debt and contingent liabilities; 16




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
    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; and 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 acquisition-related costs or amortization costs
    for acquired intangible assets that could impact Brocades
    operating results;
    potential write-down of goodwill
    and/or
    acquired intangible assets, which are subject to impairment
    testing on a regular basis, and could significantly impact
    Brocades operating results; and
    dilution of the percentage of Brocades stockholders to the
    extent equity is used as consideration or option plans are
    assumed.    14.
    Brocades
    business is subject to cyclical fluctuations and uneven sales
    patterns, which makes predicting results of operations
    difficult.    15.
    Brocades
    quarterly and annual revenues and operating results may
    fluctuate in future periods due to a number of factors, which
    could adversely affect the trading price of Brocades
    stock.    
    announcements, introductions and transitions of new products by
    Brocade and its competitors or its OEM partners;
    the timing of customer orders, product qualifications and
    product introductions of Brocades OEM partners;
    seasonal fluctuations;
    long and complex sales cycles;
    changes, disruptions or downturns in general economic
    conditions, particularly in the information technology industry;
    declines in average selling prices for Brocades products
    as a result of competitive pricing pressures or new product
    introductions by Brocade or its competitors; 17




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
    the emergence of new competitors and new technologies in the
    storage network and data management markets;
    deferrals of customer orders in anticipation of new products,
    services, or product enhancements introduced by Brocade or its
    competitors;
    Brocades ability to timely produce products that comply
    with new environmental restrictions or related requirements of
    its OEM 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;
    increases in prices of components used in the manufacture of
    Brocades products;
    Brocades ability to attain and maintain production volumes
    and quality levels;
    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;
    stock-based compensation expense that is affected by
    Brocades stock price;
    new legislation and regulatory developments; and
    other risk factors detailed in this section entitled Risks
    Related to Brocades Business.    16.
    Undetected
    software or hardware errors could increase Brocades costs,
    reduce Brocades revenues and delay market acceptance of
    Brocades products.    17.
    If
    Brocade loses key personnel or is unable to hire additional
    qualified personnel, Brocades business may be
    harmed.   18




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18.
    Brocade
    is subject to environmental regulations that could have a
    material adverse effect on Brocades
    business.    19.
    Brocades
    future operating expenses may be adversely affected by changes
    in Brocades stock price.   19




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20.
    Brocade
    has extensive international operations, which subjects it to
    additional business risks.    
    supporting multiple languages;
    recruiting sales and technical support personnel with the skills
    to design, manufacture, sell and support Brocades products;
    increased complexity and costs of managing international
    operations;
    increased exposure to foreign currency exchange rate
    fluctuations;
    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;
    difficulties in collecting accounts receivable;
    reduced or limited protection of intellectual property rights;
    managing a development team in geographically disparate
    locations, including China and India; and
    more complicated logistics and distribution arrangements.      21.
    Brocade
    relies on licenses from third parties and the loss or inability
    to obtain any such license could harm Brocades
    business.   20




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22.
    Third-parties
    may bring infringement claims against Brocade, which could be
    time-consuming and expensive to defend.    
    stop selling, incorporating or using products or services that
    use the challenged intellectual property;
    obtain from the owner of the infringed intellectual property a
    license to the relevant intellectual property, which may require
    Brocade to pay royalty or license fees, or to license
    Brocades intellectual property to such owner and which may
    not be available on commercially reasonable terms or at
    all; and
    redesign those products or services that use technology that is
    the subject of an infringement claim.    23.
    Business
    interruptions could adversely affect Brocades
    business.    24.
    Brocades
    business is subject to increasingly complex corporate
    governance, public disclosure, accounting and tax requirements
    that have increased both its costs and the risk of
    noncompliance.     21




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25.
    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.    
    authorizing the issuance of preferred stock without stockholder
    approval;
    providing for a classified board of directors with staggered,
    three-year terms;
    prohibiting cumulative voting in the election of directors;
    limiting the persons who may call special meetings of
    stockholders;
    prohibiting stockholder actions by written consent; and
    requiring super-majority voting to effect amendments to the
    foregoing provisions of Brocades certificate of
    incorporation and bylaws.    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties    Item 3.
    Legal
    Proceedings    In Re Brocade Communications Systems, Inc.
    Initial Public Offering Securities Litigation In Re Initial Public Offering
    Securities Litigation
 22




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Rule 10b-5 Form 10-K
   23




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Item 4.
    Submission
    of Matters to a Vote of Security Holders    PART II
  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities     24




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Total Number of


Approximate DollarShares Purchased


Value of Shares thatTotal Number





as Part of Publicly


May Yet beof Shares


Average Price


Announced


Purchased UnderPurchased(1)


Paid per Share


Program(1)


the Program(2)July 29, 2007  August 25, 2007


3


$
6.97



2,835


$
112,891August 26, 2007  September 22, 2007





$
7.12



1,530


$
102,001September 23, 2007  October 27, 2007


3


$
8.73



2,238


$
82,458Total


6


$
7.60



6,603


$
82,458     (1)
    
    The total number of shares repurchased include those shares of
    Brocade common stock that employees deliver back to Brocade to
    satisfy tax-withholding obligations at the settlement of
    restricted stock exercises or upon termination of the employee
    and the forfeiture of restricted awards, but does not include
    those shares of Brocade common stock that were cashed-out as a
    result of the Reverse/Forward Split effective June 26, 2007.(2)
    
    On January 29, 2007, the Company announced the
    authorization of $200 million for stock repurchases, which
    is in addition to the $52.7 million remaining under the
    previously announced a $100 million stock repurchase
    program approved by our Board of Directors in August 2004. In
    addition, the Company announced on November 29, 2007 that
    an additional $500 million had been authorized for
    repurchase of the Companys 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 Company has also entered into a written
    plan for the automatic repurchase of its securities in
    accordance with
    Section 10b5-1
    of the Securities Exchange Act of 1934 as part of its share
    repurchase program. 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 and other
    factors, including alternative investment opportunities. 25




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COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
    Among Brocade Communications Systems, Inc., The NASDAQ Composite
    Index,
    The NASDAQ Computer Index And SIC Code 3577
  
   *
    
    $100 invested on 10/26/02 in stock or on 10/31/02 in
    index-including reinvestment of dividends. Indexes calculated on
    month-end basis. 26




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Item 6.
    Selected
    Financial Data  Form 10-K.
  Form 10-K.
  Five-Year
    Summary
  Fiscal Year EndedOctober 27,


October 28,


October 29,


October 30,


October 25,2007(1)


2006(2)


2005(3)


2004(4)


2003(5)(In thousands, except per share amounts)Statement of Income Data:Net revenues

$
1,236,863


$
750,592


$
574,120


$
596,265


$
525,277Cost of revenues


575,451



305,184



251,161



268,974



241,163Gross margin


661,412



445,408



322,959



327,291



284,114Operating expenses (benefits):Research and development


213,311



164,843



132,448



142,535



146,545Sales and marketing


211,168



139,434



101,202



102,445



115,075General and administrative


46,980



31,089



25,189



24,593



21,306Legal fees associated with indemnification obligations, SEC
    investigation and other related costs, net


46,257



13,654



14,027







Provision for SEC settlement






7,000











Amortization of intangible assets


24,719



2,294











Acquisition and integration costs


19,354



9,646











Restructuring and facilities lease losses, net






3,775



(670
)


84,557



20,828Settlement of an acquisition-related claim














6,943



In-process research and development










7,784







134,898Total operating expenses


561,789



371,735



279,980



361,073



438,652Income (loss) from operations


99,623



73,673



42,979



(33,782
)


(154,538
)Interest and other income, net


38,501



29,098



22,656



18,786



18,424Interest expense


(6,414
)


(7,082
)


(7,693
)


(10,677
)


(13,339
)Gain on repurchases of convertible subordinated debt










2,318



5,613



11,118Gain (loss) on investments, net


13,205



2,663



(5,062
)


436



3,638Income (loss) before provision for income taxes


144,915



98,352



55,198



(19,624
)


(134,697
)Income tax provision


68,043



30,723



12,077



14,070



11,852Net income (loss)


76,872


$
67,629


$
43,121


$
(33,694
)

$
(146,549
)Net income (loss) per share  basic

$
0.21


$
0.25


$
0.16


$
(0.13
)

$
(0.58
)Net income (loss) per share  diluted

$
0.21


$
0.25


$
0.16


$
(0.13
)

$
(0.58
)Shares used in per share calculation  basic


362,070



269,602



268,176



260,446



250,610Shares used in per share calculation  diluted


377,558



274,142



270,260



260,446



250,610Balance Sheet Data:Cash, cash equivalents, investments and restricted short-term
    investments

$
625,832


$
582,554


$
764,402


$
736,908


$
835,565Working capital(6)


502,499



428,233



317,819



434,162



355,634Total assets


1,930,100



900,718



981,730



987,382



1,063,174Non-current liabilities associated with lease losses


25,742



11,105



12,481



16,799



16,518Convertible subordinated debt and capital lease obligations


167,498







278,883



352,279



442,950Total stockholders equity


1,266,658



616,230



508,847



445,652



447,868  27




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##### Table of Contents



(1)
    
    The fiscal year ended October 27, 2007 includes the impact
    of the acquisition of McDATA, which was completed in the second
    quarter of fiscal year 2007 (see Note 3,
    Acquisitions, of the Notes to Consolidated Financial
    Statements). In addition, in the fiscal year ended
    October 27, 2007 we recorded a $13.2 million gain on
    investments on the disposition of portfolio investments
    primarily associated with the disposition of marketable
    strategic investments at amounts above the carrying value (see
    Note 16, Gain on Investment, net, of the Notes
    to Consolidated Financial Statements). The fiscal year ended
    October 27, 2007 also includes net legal fees associated
    with applicable indemnification obligations, SEC investigation
    and other related costs of $46.3 million. Further, during
    the first quarter of fiscal year 2006, we began active
    settlement discussions with the SECs Division of
    Enforcement regarding our financial restatements related to
    stock option accounting. As a result of these discussions, we
    recorded a provision of $7.0 million for an estimated
    settlement expense in the fiscal year ended October 28,
    2006. On May 31, 2007, the offer of settlement was approved
    by the SECs Commissioners. On August 27, 2007, final
    judgment approving the settlement was entered by the United
    States District Court for the Northern District of California
    and the $7.0 million settlement amount was released to the
    SEC.(2)
    
    The fiscal year ended October 28, 2006 includes the impact
    of the acquisition of NuView, which was completed in the second
    quarter of fiscal year 2006 (see Note 3,
    Acquisitions, of the Notes to Consolidated Financial
    Statements). In addition, in the fiscal year ended
    October 28, 2006 we recorded a $2.7 million gain on
    investments on the disposition of portfolio investments
    primarily associated with non-marketable private strategic
    investments (see Note 16, Gain on Investment,
    net, of the Notes to Consolidated Financial Statements).
    The fiscal year ended October 28, 2006 also includes net
    legal fees associated with applicable indemnification
    obligations, SEC investigation and other related costs of
    $13.7 million. Further, during the first fiscal quarter we
    began active settlement discussions with the SECs Division
    of Enforcement regarding our financial restatements related to
    stock option accounting. As a result of these discussions, we
    recorded a provision of $7.0 million for an estimated
    settlement expense (see Note 9, Commitments and
    Contingencies, of the Notes to Consolidated Financial
    Statements). During the second fiscal quarter, we recorded a
    charge of $3.8 million related to estimated facilities
    lease losses, net of expected sublease income (see Note 5,
    Liabilities Associated with Facilities Lease Losses,
    of the Notes to Consolidated Financial Statements). Moreover,
    during the fourth quarter and related to prior acquisitions and
    the potential acquisition of McDATA, we recorded acquisition and
    integration costs for a total of $9.6 million.(3)
    
    The fiscal year ended October 29, 2005 includes the impact
    of the acquisition of Therion, which was completed in the third
    quarter of fiscal year 2005. In connection with our acquisition
    of Therion, we recorded in-process research and development
    expense of $7.8 million (see Note 3,
    Acquisitions, of the Notes to Consolidated Financial
    Statements). The fiscal year ended October 29, 2005 also
    includes Audit Committee internal review and net SEC
    investigation costs of $14.0 million. In January 2005 we
    announced that our Audit Committee completed an internal review
    regarding historical stock option granting practices. Following
    the January 2005 Audit Commit tee internal review, on
    May 16, 2005, we announced that additional information came
    to our attention that indicated that certain guidelines
    regarding stock option granting practices were not followed and
    our Audit Committee had commenced an internal review of our
    stock option accounting focusing on leaves of absence and
    transition and advisory roles. Our Audit Committee review was
    completed in November 2005. In addition, in the fiscal year
    ended October 29, 2005 we recorded a $5.1 million net
    loss on investments on the disposition of portfolio investments
    primarily associated with the defeasance of the indenture
    agreement relating to our 2% Convertible Notes (see
    Note 8, Convertible Subordinated Debt, of the
    Notes to Consolidated Financial Statements) and recorded a total
    of $2.3 million gain on repurchases of convertible
    subordinated debt. 28




---



##### Table of Contents



(4)
    
    The fiscal year ended October 30, 2004 includes the impact
    of restructuring costs of $9.0 million related to a
    restructuring plan implemented during the three months ended
    May 1, 2004. The fiscal year ended October 30, 2004
    also includes a net lease termination charge and other of
    $75.6 million. During the three months ended
    January 24, 2004, we purchased a previously leased building
    located near our San Jose headquarters for
    $106.8 million in cash. The $106.8 million consisted
    of $30.0 million for the purchase of land and a building
    and $76.8 million for a lease termination fee (see
    Note 5, Liabilities Associated with Facilities Lease
    Losses, of the Notes to Consolidated Financial
    Statements). In addition, in the fiscal year ended
    October 30, 2004 we recorded a $6.9 million charge in
    settlement of a claim relating to our acquisition of Rhapsody
    and recorded a total of $5.6 million gain on repurchases of
    convertible subordinated debt.(5)
    
    The fiscal year ended October 25, 2003 includes the impact
    of our acquisition of Rhapsody, which was completed in the
    second quarter of fiscal year 2003. In connection with our
    acquisition of Rhapsody, we recorded in-process research and
    development expense of $134.9 million. The fiscal year
    ended October 25, 2003 also includes restructuring costs of
    $20.8 million, gain on repurchases of convertible
    subordinated debt of $11.1 million and net gains on the
    disposition of non-marketable private strategic investments of
    $3.6 million.(6)
    
    The calculation of working capital for the fiscal year ended
    October 29, 2005 also includes the balance of convertible
    subordinated debt of $278.9 million. 29




---



##### Table of Contents



First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(In thousands, except per share and stock price amounts)Quarterly Data:Fiscal Year Ended October 27, 2007Net revenues

$
224,156


$
345,268


$
327,455


$
339,984Gross margin

$
141,366


$
170,848


$
165,788


$
183,410Income from operations

$
39,413


$
8,836


$
12,004


$
39,370Net income

$
33,318


$
843


$
10,690


$
32,020Per share amounts:Basic

$
0.12


$
0.00


$
0.03


$
0.08Diluted

$
0.12


$
0.00


$
0.03


$
0.08Shares used in computing per share amounts:Basic


272,855



395,574



392,450



387,400Diluted


285,137



411,989



407,113



408,844Closing prices:High

$
9.41


$
10.52


$
9.77


$
9.25Low

$
7.56


$
8.23


$
7.37


$
6.19Fiscal Year Ended October 28, 2006Net revenues

$
170,082


$
182,742


$
188,947


$
208,821Gross margin

$
100,701


$
105,144


$
111,914


$
127,649Income from operations

$
12,261


$
15,357


$
21,575


$
24,480Net income

$
9,660


$
13,513


$
24,498


$
19,958Per share amounts:Basic

$
0.04


$
0.05


$
0.09


$
0.07Diluted

$
0.04


$
0.05


$
0.09


$
0.07Shares used in computing per share amounts:Basic


269,400



270,564



269,417



269,027Diluted


272,101



274,393



273,959



276,113Closing prices:High

$
4.63


$
6.97


$
6.69


$
8.92Low

$
3.44


$
4.56


$
5.52


$
5.01Fiscal Year Ended October 29, 2005Net revenues

$
161,578


$
144,753


$
122,273


$
145,516Gross margin

$
97,172


$
82,834


$
62,386


$
80,567Income (loss) from operations

$
30,162


$
19,448


$
(14,311
)

$
7,680Net income (loss)

$
27,943


$
21,357


$
(7,235
)

$
1,056Per share amounts:Basic

$
0.10


$
0.08


$
(0.03
)

$
0.00Diluted

$
0.10


$
0.08


$
(0.03
)

$
0.00Shares used in computing per share amounts:Basic


266,218



268,043



268,765



269,679Diluted


271,422



269,823



268,765



270,311Closing prices:High

$
7.99


$
6.42


$
4.49


$
4.49Low

$
5.83


$
4.35


$
3.88


$
3.51  30




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Results
    of Operations
    Fiscal Years EndedOctober 27,


October 28,


October 29,2007


2006


2005Net revenuesProduct


87.0
%


92.3
%


93.5
%Service


13.0



7.7



6.5Total net revenues


100.0



100.0



100.0Cost of revenuesProduct


38.1



35.9



39.8Service


8.4



4.8



3.9Total cost of revenues


46.5



40.7



43.7Gross margin


53.5



59.3



56.3Operating expenses:Research and development


17.2



22.0



23.1Sales and marketing


17.1



18.6



17.6General and administrative


3.8



4.1



4.4Legal fees associated with indemnification obligations, SEC
    investigation and other related costs, net


3.7



1.8



2.4Acquisition and integration costs


1.6



1.3



Provision for SEC settlement






0.9



Amortization of intangible assets


2.0



0.3



Restructuring and facilities lease loss, net






0.5



(0.1
)In-process research and development










1.4Total operating expenses


45.4



49.5



48.8Income from operations


8.1



9.8



7.5Interest and other income, net


3.1



3.9



3.9Interest expense


(0.5
)


(0.9
)


(1.3
)Gain on repurchases of convertible subordinated debt






0.0



0.4Gain (loss) on sale of investments


1.1



0.4



(0.9
)Income before provision for income taxes


11.8



13.2



9.6Income tax provision


5.6



4.1



2.1Net income


6.2
%


9.1
%


7.5
%  31




---



##### Table of Contents



Revenues.
    Year EndedOctober 27,


% of Net


October 28,


% of Net


Increase/


%2007


Revenue


2006


Revenue


(Decrease)


ChangeProduct

$
1,076,529



87.0
%

$
692,940



92.3
%

$
383,589



55.4
%Service


160,334



13.0
%


57,652



7.7
%


102,682



178.1
%Total net revenues

$
1,236,863



100.0
%

$
750,592



100.0
%

$
486,271



64.8
%       Year EndedOctober 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


ChangeProduct

$
692,940



92.3
%

$
536,834



93.5
%

$
156,106



29.1
%Service


57,652



7.7
%


37,286



6.5
%


20,366



54.7
%Total Net Revenue

$
750,592



100
%

$
574,120



100
%

$
176,472



30.8
%        32




---



##### Table of Contents



Year EndedOctober 27,


% of Net


October 28,


% of Net


Increase/


%2007


Revenue


2006


Revenue


(Decrease)


ChangeDomestic

$
753,398



60.9
%

$
478,138



63.7
%

$
275,260



57.6
%International


483,465



39.1
%


272,454



36.3
%


211,011



77.5
%Total Net Revenue

$
1,236,863



100
%

$
750,592



100
%

$
486,271



64.8
%     Year EndedOctober 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


ChangeDomestic

$
478,138



63.7
%

$
363,761



63.4
%

$
114,377



31.4
%International


272,454



36.3
%


210,359



36.6
%


62,095



29.6
%Total Net Revenue

$
750,592



100.0
%

$
574,120



100.0
%

$
176,472



30.8
%       Cost of Goods Sold.
    Year EndedOctober 27,


% of Net


October 28,


% of Net


Increase/


% Points2007


Revenue


2006


Revenue


(Decrease)


ChangeProduct

$
470,977



38.1
%

$
269,430



35.9
%

$
201,547



2.2
%Service


104,474



8.4
%


35,754



4.8
%


68,720



3.6
%Total cost of goods sold

$
575,451



46.5
%

$
305,184



40.7
%

$
270,267



5.8
%    33




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##### Table of Contents



Year EndedOctober 28,


% of Net


October 29,


% of Net


Increase/


% Points2006


Revenue


2005


Revenue


(Decrease)


ChangeProduct

$
269,430



35.9
%

$
228,488



39.8
%

$
40,942



(3.9
)%Service


35,754



4.8
%


22,673



3.9
%


13,081



0.9
%Total Cost of Goods Sold

$
305,184



40.7
%

$
251,161



43.7
%

$
54,023



(3.0
)%         Research and development expenses.
    October 27,

% of Net

October 28,

% of Net

Increase/

%2007

Revenue

2006

Revenue

(Decrease)

Change$213,311

17.2%

$164,843

22.0%

$48,468

29.4%  34




---



##### Table of Contents



October 28,

% of Net

October 29,

% of Net

Increase/

%2006

Revenue

2005

Revenue

(Decrease)

Change$164,843

22.0%

$132,448

23.1%

$32,395

24.5%       Sales and marketing expenses.
    October 27,

% of Net

October 28,

% of Net

Increase/

%2007

Revenue

2006

Revenue

(Decrease)

Change$211,168

17.1%

$139,434

18.6%

$71,734

51.4%       October 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


Change$
139,434



18.6
%

$
101,202



17.8
%

$
38,232



37.8
%      35




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##### Table of Contents



General and administrative expenses.
    October 27,

% of Net

October 28,

% of Net

Increase/

%2007

Revenue

2006

Revenue

(Decrease)

Change$
46,980



3.8
%

$
31,089



4.1
%

$
15,891



51.1
%       October 26,

% of Net

October 29,

% of Net

Increase/

%2006

Revenue

2005

Revenue

(Decrease)

Change$
31,089



4.1
%

$
25,189



4.4
%

$
5,900



23.4
%       Net legal fees associated with indemnification obligations,
    SEC investigation and other related costs defense and
    other related costs. and/or
  ,
  October 27,

% of Net

October 28,

% of Net

Increase/

%2007

Revenue

2006

Revenue

(Decrease)

Change$
46,257



3.7
%

$
13,654



1.8
%

$
32,603



238.8
%       October 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


Change$
13,654



1.8
%

$
14,027



2.4
%

$
(373
)


(2.7
)%    36




---



##### Table of Contents



Provision for SEC settlement.
  October 27,


% of Net


October 28,


% of Net


Increase/


%2007


Revenue


2006


Revenue


(Decrease)


Change$





%

$
7,000



0.9
%

$
(7,000
)


(100.0
)%     October 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


Change$
7,000



0.9
%

$





%

$
7,000



100.0
%     Amortization of intangible
    assets.
  October 27,


% of Net


October 28,


% of Net


Increase/


%2007


Revenue


2006


Revenue


(Decrease)


Change$
24,719



2.0
%

$
2,294



0.3
%

$
22,425



977.6
%     October 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


Change 1$
2,294



0.3
%

$





%

$
2,294



100
%   Goodwill and Other
    Intangible Assets
  Acquisition and integration costs.
  October 27,


% of Net


October 28,


% of Net


Increase/


%2007


Revenue


2006


Revenue


(Decrease)


Change$
19,354



1.6
%

$
9,646



1.3
%

$
9,708



100.7
%     October 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


Change$
9,646



1.3
%

$





%

$
9,646



100.0
%    37




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##### Table of Contents



Restructuring and facilities lease losses,
    net.
  October 27,


% of Net


Octobe 28,


% of Net


Increase/


%2007


Revenue


2006


Revenue


(Decrease)


Change$





%

$
3,775



0.5
%

$
(3,775
)


(100
)%     October 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


Change$
3,775



0.5
%

$
(670
)


(0.1
)%

$
4,445



(663
)%     In-process research and development.
    October 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


Change$





%

$
7,784



1.4
%

$
(7,784
)


(100
)%     Interest and other income, net.
  October 27,


% of Net


October 28,


% of Net


Increase/


%2007


Revenue


2006


Revenue


(Decrease)


Change$
38,501



3.1
%

$
29,098



3.9
%

$
9,403



32.3
%     October 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


Change$
29,098



3.9
%

$
22,656



3.9
%

$
6,442



28.4
%  38




---



##### Table of Contents



Interest expense.
    October 27,


% of Net


October 28,


% of Net


Increase/


%2007


Revenue


2006


Revenue


(Decrease)


Change$
(6,414
)


(0.5
)%

$
(7,082
)


(0.9
)%

$
(668
)


(9.4
)%       October 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


Change$
(7,082
)


(0.9
)%

$
(7,693
)


(1.3
)%

$
(611
)


(8.0
)%     Gain on repurchases of convertible subordinated debt.
    October 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


Change$





%

$
2,318



0.4
%

$
(2,318
)


(100
)%     Gain (loss) on investments, net.
  October 27,


% of Net


October 28,


% of Net


Increase/


%2007


Revenue


2006


Revenue


(Decrease)


Change$
13,205



1.1
%

$
2,663



0.4
%

$
10,542



395.9
%  39




---



##### Table of Contents



October 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


Change$
2,663



0.4
%

$
(5,062
)


(0.9
)%

$
7,725



152.6
%     Provision for income taxes.
  October 27,


% of Net


October 28,


% of Net


Increase/


%2007


Revenue


2006


Revenue


(Decrease)


Change$
68,043



5.6
%

$
30,723



4.1
%

$
37,320



121.5
%     October 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


Change$
30,723



4.1
%

$
12,077



2.1
%

$
18,646



154.4
%     Accounting for Income
    Taxes
   40




---



##### Table of Contents



Stock compensation expense.
  October 27,


% of Net


October 28,


% of Net


Increase/


%2007


Revenue


2006


Revenue


(Decrease)


Change$
36,942



3.9
%

$
31,407



4.2
%

$
5,535



17.6
%     October 28,


% of Net


October 29,


% of Net


Increase/


%2006


Revenue


2005


Revenue


(Decrease)


Change$
31,407



4.2
%

$
(616
)


(0.1
)%

$
32,023



5,199
%     Year Ended


Year Ended


Year EndedOctober 27,


October 28,


October 29,2007


2006


2005Cost of goods sold

$
11,565


$
8,564


$
(530
)Research and development


11,451



11,952



226Sales and marketing


9,278



7,412



(126
)General and administrative


4,648



3,479



(186
)Total stock based compensation

$
36,942


$
31,407


$
(616
)     41




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##### Table of Contents



October 27,


October 28,2007


2006


Increase(In thousands)Liquidity and Capital ResourcesCash and cash equivalents

$
315,755


$
274,368


$
41,387Short-term investments, restricted and unrestricted


325,846



267,694



58,152Marketable equity securities


14,205







14,205Long-term investments


137,524



40,492



97,032Total

$
793,330


$
582,554


$
210,776Percentage of total assets


41
%


65
%           Manufacturing and Purchase Commitments.
  Convertible Subordinated Debt.
 42




---



##### Table of Contents



paid-in-capital No. 00-19, Accounting for Derivative Financial Instruments Indexed
    to, and Potentially Settled in, a Companys own Stock (EITF 00-19).
      Other contractual obligations.
 43




---



##### Table of Contents



Less than








More thanTotal


1 Year


1-3 Years


3-5 Years


5 YearsContractual Obligations:Non-cancelable operating leases(1)


116,811
(1)


25,838



45,764



15,839



29,370Capital leases


1,448



1,256



192







Purchase commitments, gross(2)


107,764
(2)


107,764











Total contractual obligations

$
226,023


$
134,858


$
45,956


$
15,839


$
29,370Other Commitments:Standby letters of credit

$
2,693


$
n/a


$
n/a


$
n/a


$
n/aGuarantee

$
1,015


$
n/a


$
n/a


$
n/a


$
n/a     (1)
    
    Amount excludes contractual sublease income of
    $7.9 million, which consists of $2.8 million to be
    received in less than 1 year, $5.0 million to be
    received in 1 through 3 years and $0.1 million to be
    received in 3 to 5 years.(2)
    
    Amount reflects total gross purchase commitments under our
    manufacturing agreements with third party contract
    manufacturers. Of this amount, we have accrued
    $21.2 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.  Share Repurchase Program. Section 10b5-1
  1-for-100 100-for-1
 44




---



##### Table of Contents



Critical
    Accounting Policies
      
    Revenue recognition and allowances for sales allowances, sales
    programs and doubtful accounts;
    Stock-based compensation;
    Warranty reserves;
    Inventory valuation and purchase commitment liabilities;
    Restructuring charges and lease loss liabilities;
    Goodwill and intangible assets;
    Litigation costs; and
    Accounting for income taxes.  Revenue recognition and allowances for sales allowances,
    sales programs and doubtful accounts
   45




---



##### Table of Contents



97-2, Software Revenue Recognition (SOP 97-2),
  Stock-Based Compensation.
    Warranty reserves.
  Inventory valuation and purchase commitment
    liabilities.
 46




---



##### Table of Contents



Restructuring charges and lease loss
    liabilities.
  Goodwill and intangible assets. Goodwill and Other Intangible Assets and/or
  Accounting for
    the Impairment or Disposal of Long-Lived Assets and/or
  Litigation costs.
 47




---



##### Table of Contents



Accounting for income taxes. Accounting for Income Taxes (FAS 109) Accounting for
    Contingencies ).
  non-United
  non-U.S. stock
  Recent
    accounting pronouncements
  Accounting for Uncertainty in Income
    Taxes  An Interpretation of FASB Statement
    No. 109 Accounting for Income Taxes.
  Fair Value Measures
  The Fair Value Option for Financial Assets and
    Financial Liabilities  including an amendment of FASB
    Statement No. 115
 48




---



##### Table of Contents



Business Combinations ® ® ®
  Noncontrolling
    Interests in Consolidated Financial Statements
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Interest
    Rate Risk
      Valuation of Securities


Fair Value


Valuation of SecuritiesGiven an Interest Rate


As of


Given an Interest RateDecrease of X Basis Points


October 27,


Increase of X Basis PointsIssuer

(150 BPS)


(100 BPS)


(50 BPS)


2007


50 BPS


100 BPS


150 BPSU.S. government agencies and municipal obligations

$
176,787


$
173,677


$
170,835


$
168,223


$
165,676


$
163,311


$
161,120Corporate bonds and notes

$
286,504


$
285,999


$
285,508


$
284,889


$
283,984


$
282,956


$
281,938Total

$
463,291


$
459,676


$
456,343


$
453,112


$
449,660


$
446,267


$
443,058    49




---



##### Table of Contents



WeightedAverageAmount


Interest RateCash and cash equivalents

$
315,755



4.27
%Short-term investments


325,846



6.32
%Marketable equity securities


14,205



6.32
%Long-term investments


137,524



5.17
%Total

$
793,330



5.31
%      50




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReport of Independent Registered Public
    Accounting Firm


52Consolidated Statements of Income


53Consolidated Balance Sheets


54Consolidated Statements of Stockholders
    Equity and Comprehensive Income


55Consolidated Statements of Cash Flows


56Notes to Consolidated Financial Statements


57   51




---



##### Table of Contents



REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
           Share-Based
    Payments,
  Internal Control  Integrated Framework
  /s/  KPMG
    LLP    52




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  CONSOLIDATED STATEMENTS OF INCOME
  Fiscal Year EndedOctober 27,


October 28,


October 29,2007


2006


2005(In thousands, except per share amounts)Net revenuesProduct

$
1,076,529


$
692,940


$
536,834Service


160,334



57,652



37,286Total Net revenues


1,236,863



750,592



574,120Cost of revenuesProduct


470,977



269,430



228,488Service


104,474



35,754



22,673Total Cost of revenues


575,451



305,184



251,161Gross margin


661,412



445,408



322,959Operating expenses:Research and development


213,311



164,843



132,448Sales and marketing


211,168



139,434



101,202General and administrative


46,980



31,089



25,189Legal fees associated with indemnification obligations, SEC
    investigation and other related costs, net


46,257



13,654



14,027Provision for SEC settlement






7,000



Amortization of intangible assets


24,719



2,294



Acquisition and integration costs


19,354



9,646



Restructuring and facilities lease losses, net






3,775



(670
)In-process research and development










7,784Total operating expenses


561,789



371,735



279,980Income from operations


99,623



73,673



42,979Interest and other income, net


38,501



29,098



22,656Interest expense


(6,414
)


(7,082
)


(7,693
)Gain on repurchases of convertible subordinated debt










2,318Gain (loss) on investments, net


13,205



2,663



(5,062
)Income before provision for income taxes


144,915



98,352



55,198Income tax provision


68,043



30,723



12,077Net income

$
76,872


$
67,629


$
43,121Net income per share  basic

$
0.21


$
0.25


$
0.16Net income per share  diluted

$
0.21


$
0.25


$
0.16Shares used in per share calculation  basic


362,070



269,602



268,176Shares used in per share calculation  diluted


377,558



274,142



270,260    53




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  CONSOLIDATED BALANCE SHEETS
  October 27,


October 28,2007


2006(In thousands,except par value)ASSETSCurrent assets:Cash and cash equivalents

$
315,755


$
274,368Short-term investments


325,846



267,694Total cash, cash equivalents and short-term investments


641,601



542,062Marketable equity securities


14,205



Accounts receivable, net of allowances of $6,505 and $4,842 in
    2007 and 2006, respectively


175,755



98,394Inventories


18,017



8,968Prepaid expenses and other current assets


62,622



43,365Total current assets


912,200



692,789Long-term investments


137,524



40,492Property and equipment, net


204,052



104,299Goodwill


384,376



41,013Intangible assets, net


272,652



15,465Other assets


19,296



6,660Total assets

$
1,930,100


$
900,718LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
108,810


$
56,741Accrued employee compensation


76,017



62,842Deferred revenue


94,533



52,051Current liabilities associated with lease losses


12,807



4,931Other accrued liabilities


117,534



87,991Total current liabilities


409,701



264,556Convertible subordinated debt


167,498



Non-current liabilities associated with lease losses


25,742



11,105Non-current liabilities  deferred taxes


22,781



Non-current deferred revenue


36,344



8,827Other non-current liabilities


1,376



Total liabilities


663,442



284,488Commitments 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: 387,406 and 272,141 shares at
    October 27, 2007 and October 28, 2006, respectively


387



272Additional paid-in capital


1,462,782



888,978Accumulated other comprehensive loss


(1,180
)


(817
)Accumulated deficit


(195,331
)


(272,203
)Total stockholders equity


1,266,658



616,230Total liabilities and stockholders equity

$
1,930,100


$
900,718    54




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  CONSOLIDATED STATEMENTS OF
    STOCKHOLDERS EQUITY AND
    COMPREHENSIVE INCOME
  AccumulatedAdditional


Deferred


Other





TotalCommon Stock


Paid-In


Stock


Comprehensive


Accumulated


Stockholders


ComprehensiveShares


Amount


Capital


Compensation


Income


Deficit


Equity


Income(In thousands)Balances at October 30, 2004


264,242



264



832,655



(5,174
)


860



(382,953
)


445,652Issuance of common stock


6,665



7



30,032















30,039



Repurchase and retirement of common stock


(62
)






(326
)














(326
)


Common stock repurchase program


(1,150
)


(1
)


(7,049
)














(7,050
)


Tax benefits from employee stock option transactions










2,571















2,571



Change in deferred stock compensation










(4,231
)


4,231















Deferred stock compensation related to restricted stock grants
    and Therion acquisition










1,911



(1,622
)










289



Amortization of deferred stock compensation














(615
)










(615
)


Change in unrealized gain (loss) on marketable equity securities
    and investments, net of tax


















(4,270
)






(4,270
)


(4,270
)Change in cumulative translation adjustments


















(564
)






(564
)


(564
)Net income






















43,121



43,121



43,121Balances at October 29, 2005


269,695


$
270


$
855,563


$
(3,180
)

$
(3,974
)

$
(339,832
)

$
508,847


$
38,287Issuance of common stock


9,644



10



34,266















34,276



Repurchase and retirement of common stock


(421
)






(3,328
)














(3,328
)


Common stock repurchase program


(6,777
)


(8
)


(40,200
)














(40,208
)


Tax benefits from employee stock option transactions










15,792















15,792



Stock-based compensation










30,065















30,065



Elimination of deferred stock compensation upon adoption of
    SFAS 123R










(3,180
)


3,180















Change in unrealized gain (loss) on marketable equity securities
    and investments, net of tax


















3,037







3,037



3,037Change in cumulative translation adjustments


















120







120



120Net income






















67,629



67,629



67,629Balances at October 28, 2006


272,141


$
272


$
888,978


$



$
(817
)

$
(272,203
)

$
616,230


$
70,786Issuance of common stock


18,807



19



100,473















100,492



Repurchase and retirement of common stock


(36
)


























Common stock repurchase program


(22,298
)


(23
)


(191,307
)














(191,330
)


Issuance of common stock for McDATA acquisition


118,792



119



627,774















627,893



Tax benefits from employee stock option transactions










(77
)














(77
)


Stock-based compensation










36,941















36,941



Change in unrealized gain (loss) on marketable equity securities
    and investments, net of tax


















(243
)






(243
)


(243
)Change in cumulative translation adjustments


















(120
)






(120
)


(120
)Net income






















76,872



76,872



76,872Balances at October 27, 2007


387,406


$
387


$
1,462,782


$



$
(1,180
)

$
(195,331
)

$
1,266,658


$
76,509    55




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  Fiscal Year EndedOctober 27,


October 28,


October 29,2007


2006


2005(In thousands)Cash flows from operating activities:Net income (loss)

$
76,872


$
67,629


$
43,121Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Excess tax benefit (provision) from employee stock plans


77



(15,792
)


2,571Depreciation and amortization


101,416



34,731



46,203Loss on disposal of property and equipment


1,213



438



1,879Amortization of debt issuance costs






1,430



1,366Net (gains) losses on investments and marketable equity
    securities


(11,694
)


(2,685
)


5,178Gain on repurchases of convertible subordinated debt










(2,318
)Provision for doubtful accounts receivable and sales allowances


5,401



3,526



2,955Provision for SEC settlement






7,000



Non-cash compensation expense


36,942



31,407



377In-process research and development










7,784Non-cash facilities lease loss expense and restructuring






3,775



(670
)Changes in assets and liabilities:Accounts receivable


27,414



(31,244
)


21,312Inventories


3,481



2,062



(5,433
)Prepaid expenses and other assets


3,523



(19,839
)


(245
)Accounts payable


10,075



32,963



(17,117
)Accrued employee compensation


(37,473
)


25,080



4,432Deferred revenue


17,162



15,390



10,602Other accrued liabilities and long term debt


(55,967
)


15,858



9,113Liabilities associated with lease losses


(8,039
)


(4,869
)


(5,245
)Net cash provided by operating activities


170,403



166,860



125,865Cash flows from investing activities:Purchases of short-term investments


(571,357
)


(325,884
)


(254,642
)Purchases of long-term investments


(200,239
)


(40,267
)


(202,764
)Purchases of marketable equity securities


(15,930
)






Proceeds from maturities and sale of short-term investments


764,939



363,873



618,063Proceeds from maturities and sale of long-term investments


12,614







178,428Proceeds from sale of marketable equity securities and equity
    investments


11,694



10,185



Purchases of property and equipment


(56,538
)


(30,430
)


(27,267
)Proceeds from sales of property and equipment


1,336







Purchases of non-marketable minority equity investments


(5,000
)


(4,575
)


(3,498
)Proceeds (purchases) from the maturities of restricted
    short-term investments






281,414



(275,995
)Net cash acquired (paid) in connection with acquisitions


139,703



(52,829
)


(7,185
)Increase in restricted cash


12,422







Cash placed in escrow in connection with acquisition of NuView






(7,058
)


Net cash provided by (used in) investing activities


93,644



194,429



25,140Cash flows from financing activities:Payments on capital lease obligations


(735
)






Purchases of convertible subordinated debt










(70,485
)Proceeds from issuance of common stock, net


100,638



34,255



29,720Common stock repurchase program


(191,293
)


(40,206
)


(7,050
)Termination of interest swap


(4,989
)






Redemption of outstanding convertible debt


(124,185
)


(278,883
)


Excess tax benefit from employee stock plans


(77
)


15,792



Net cash used in financing activities


(220,641
)


(269,042
)


(47,815
)Effect of exchange rate fluctuations on cash and cash equivalents


(2,019
)


120



(564
)Net increase (decrease) in cash and cash equivalents


41,387



92,367



102,626Cash and cash equivalents, beginning of year


274,368



182,001



79,375Cash and cash equivalents, end of year

$
315,755


$
274,368


$
182,001Supplemental disclosure of cash flow information:Cash paid for interest

$
3,882


$
8,916


$
8,195Cash paid for income taxes

$
17,800


$
12,911


$
3,193Supplemental schedule of non-cash transactions:Adjustment of deferred tax assets and liabilities

$
22,781


$



$
Issuance of common stock for McDATA acquisition

$
627,893


$



$
    56




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Organization
    and Operations of Brocade          ® tm ® ® ® ® ® and/or
  2.
    Summary
    of Significant Accounting Policies  Fiscal
    Year
    Principles
    of Consolidation
    Cash
    and Cash Equivalents
   57




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Investments
    and Equity Securities
             58




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair
    Value of Financial Instruments
    Inventories
  first-in,
  Property
    and Equipment
    Accrued
    Employee Compensation
    Goodwill
    and Other Intangible Assets
  Goodwill and Other Intangible Assets and/or
   59




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting
    for the Impairment or Disposal of Long-Lived Assets and/or
  Concentrations
           60




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Revenue
    Recognition
  Product revenue.
    Service revenue.
  Multiple-element arrangements. 97-2, Software Revenue Recognition (SOP 97-2),
  Warranty
    Expense
    Foreign
    Currency
   61




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Software
    Development Costs
  Accounting for the Costs of Computer Software to be
    Sold, Leased, or Otherwise Marketed.
  98-1, Accounting for Costs of Computer Software Developed or
    Obtained for Internal Use.
  Advertising
    Costs
    Income
    Taxes
  Accounting for Income
    Taxes (FAS 109) Accounting for
    Contingencies
  Computation
    of Net Income per Share
    Stock-Based
    Compensation
   62




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  No. 123-R, Share-Based Payment Accounting for Stock-Based
    Compensation
  Accounting for Stock Issued to
    Employees
  No. FAS 123R-3, Transition Election Related to Accounting for tax
    Effects of Share-Based Payment Awards (FAS 123R-3).
  Use of
    Estimates in Preparation of Consolidated Financial
    Statements
    Recent
    Accounting Pronouncements
  Accounting for Uncertainty in Income
    Taxes  An Interpretation of FASB Statement
    No. 109 Accounting for Income Taxes.
 63




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair Value Measures
  The Fair Value Option for Financial Assets and
    Financial Liabilities  including an amendment of FASB
    Statement No. 115
  Business Combinations ® ® ® ®
  Noncontrolling
    Interests in Consolidated Financial Statements
  Reclassifications
    3.
    Acquisitions  McDATA
    Corporation
   64




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Year EndedOctober 27,


October 28,2007(1)


2006(2)Total revenue

$
1,392,952


$
1,406,884Pretax income (loss)


105,732



(22,734
)Net income (loss)


37,220



(53,189
)Basic earnings per share

$
0.10


$
(0.14
)     (1)
    
    The pro forma financial results for the year ended
    October 27, 2007 include Brocades historical results
    for the twelve months ended October 27, 2007 and
    McDATAs historical results for the three months ended
    October 31, 2006, including amortization related to fair
    value adjustments based on the fair values of assets acquired
    and liabilities assumed and deferred compensation recognized as
    of the McDATA acquisition date of January 29, 2007.(3)
    
    The pro forma financial results for the year ended
    October 28, 2006 include Brocades historical twelve
    months ended October 28, 2006 and McDATAs historical
    three months ended January 31, 2006 and nine months ended
    October 31, 2006, including amortization related to fair
    value adjustments based on the fair values of assets acquired
    and liabilities assumed and deferred compensation recognized as
    of the McDATA acquisition date of January 29, 2007.   65




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Assets acquired:Cash and cash equivalents

$
147,407Short term investments


78,315Accounts receivable, net


108,426Inventory, net


12,559Fixed assets, net


90,015Identifiable intangible assetsTradename


10,341Core/Developed technology


147,191Customer relationships


157,501Deferred tax assets


127,651Goodwill


370,296Other assets


112,887Total assets acquired


1,362,589Liabilities assumed:Deferred tax liabilities


127,651Debt assumed


282,050Other liabilities


293,971Total liabilities assumed


703,672Net assets acquired

$
658,917     Silverback
    Systems, Inc.
       66




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Assets acquiredCash

$
98Accounts receivable


172Identifiable intangible assetsTradename


100Core/Developed technology


590Customer relationships


400Non-compete agreements


370Backlog


80Goodwill


8,345Other assets


1,644Total assets acquired


11,799Liabilities assumedAccounts payable and accrued liabilities


3,995Total liabilities assumed


3,995Net assets acquired

$
7,804   NuView,
    Inc.
       67




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Assets acquiredCash

$
130Accounts receivable


1,947Identifiable intangible assets Tradename


932Core/Developed technology


7,896Customer relationships


8,931Goodwill


41,013Other assets


114Total assets acquired


60,963Liabilities assumedAccounts payable and accrued liabilities


230Deferred revenue


220Total liabilities acquired


450Net assets acquired

$
60,513     Therion
    Software Corporation
       68




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  4.
    Goodwill
    and Intangible Assets    Balance at October 28, 2006

$
41,013Silverback acquisition


8,408McDATA acquisition(1)


334,955Balance at October 27, 2007

$
384,376     (1)
    
    There is an allocation period, following the consummation of a
    business combination, during which a Company may be able to make
    adjustments to the fair values of assets and liabilities
    acquired. During the year ended October 27, 2007, the
    Company recorded the following adjustments to the fair value of
    assets and liabilities acquired from McDATA:  Balance at April 28, 2007

$
370,296Adjustments related to inventory purchase commitments


2,594Adjustment related to tax liabilities, net


(45,084
)Fair value adjustment related to debt assumed


6,038Other adjustments


1,111Balance at October 27, 2007

$
334,955       Gross





NetCarrying


Accumulated


CarryingValue


Amortization


ValueTradename

$
11,373


$
3,089


$
8,284Core/Developed technology


154,454



34,929



119,525Customer relationships


167,011



22,317



144,694Non-compete agreements


371



222



149Backlog


80



80



Total intangible assets

$
333,289


$
60,637


$
272,652     Gross





NetCarrying


Accumulated


CarryingValue


Amortization


ValueTradename

$
932


$
120


$
812Core/Developed technology


7,896



1,020



6,876Customer relationships


8,931



1,154



7,777Total intangible assets

$
17,759


$
2,294


$
15,465    69




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FutureEstimatedFiscal Years

Amortization2008


67,7752009


64,6002010


51,7482011


41,7482012


28,3932013


16,0702014


2,318Total

$
272,652   5.
    Liabilities
    Associated with Facilities Lease Losses           70




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Lease LossReserveReserve balances at October 30, 2004


22,476Cash payments on facilities leases


(5,202
)Non-cash charges and other adjustments, net


(134
)Reserve balances at October 29, 2005


17,140Additional reserve booked as a result of second quarter 2006
    current market data


3,775Cash payments on facilities leases


(4,765
)Non-cash charges and other adjustments, net


(114
)Reserve balances at October 28, 2006

$
16,036Additional reserve booked as a result of acquisitions in first
    and second quarters in 2007 and adjustment in fourth quarter 2007


30,642Cash payments on facilities leases


(8,207
)Non-cash charges and other adjustments, net


78Reserve balances at October 27, 2007

$
38,549     6.
    Balance
    Sheet Details    October 27,


October 28,2007


2006Inventories:Raw materials

$
11,860


$
82Finished goods


6,157



8,886Total

$
18,017


$
8,968Property and equipment, net:Computer equipment and software

$
102,643


$
73,421Engineering and other equipment


182,640



144,530Furniture and fixtures


11,152



4,360Leasehold improvements


56,052



43,519Land and building


79,523



30,000Subtotal


432,010



295,830Less: Accumulated depreciation and amortization


(227,958
)


(191,531
)Total

$
204,052


$
104,299  71




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    October 27,


October 28,2007


2006Other accrued liabilities:Income taxes payable

$
46,739


$
39,076Accrued warranty


5,923



2,230Inventory purchase commitments


23,176



6,104Accrued sales programs


11,245



12,051Other


30,451



28,530Total

$
117,534


$
87,991   7.
    Investments
    and Equity Securities    Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


ValueOctober 27, 2007U.S. government and its agencies and municipal obligations

$
168,064


$
175


$
(17
)

$
168,222Corporate bonds and notes


284,711



702



(524
)


284,889Marketable equity securities


26,189







(1,725
)


24,464Total

$
478,964


$
877


$
(2,266
)

$
477,575Reported as:Short-term investments













$
340,051Long-term investments














137,524Total













$
477,575October 28, 2006U.S. government and its agencies and municipal obligations

$
124,105


$
5


$
(556
)

$
123,554Corporate bonds and notes


185,183



32



(583
)


184,632Total

$
309,288


$
37


$
(1,139
)

$
308,186Reported as:Short-term investments













$
267,694Long-term investments














40,492Total













$
308,186    72




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Less Than 12 Months


12 Months or Longer


TotalGross





Gross





GrossUnrealized





Unrealized





UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


LossesOctober 27, 2007U.S. government and its agencies and municipal obligations

$
19,884


$
(17
)

$



$



$
19,884


$
(17
)Corporate bonds and notes


95,249



(380
)


27,390



(144
)


122,639



(524
)Marketable Equity Securities


14,205



(1,725
)










14,205



(1,725
)Total

$
129,338


$
(2,122
)

$
27,390


$
(144
)

$
156,728


$
(2,266
)   Less Than 12 Months


12 Months or Longer


TotalGross





Gross





GrossUnrealized





Unrealized





UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


LossesOctober 28, 2006U.S. government and its agencies and municipal obligations

$
69,016


$
(427
)

$
14,635


$
(130
)

$
83,651


$
(557
)Corporate bonds and notes


112,769



(446
)


18,208



(136
)


130,977



(582
)Total

$
181,785


$
(873
)

$
32,843


$
(266
)

$
214,628


$
(1,139
)    73




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    AmortizedCost


Fair ValueLess than one year

$
315,819


$
315,588Due in 1  2 years


103,287



103,619Due in 2  3 years


33,669



33,905Total

$
452,775


$
453,112   8.
    Convertible
    Subordinated Debt        sm
     74




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        paid-in-capital No. 00-19, Accounting for Derivative Financial Instruments Indexed
    to, and Potentially Settled in, a Companys own Stock (EITF 00-19).
      9.
    Commitments
    and Contingencies  Operating
    and Capital Leases
   75




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    OperatingFiscal Year Ended October

Leases2008

$
25,8382009


24,5032010


21,2612011


8,194Thereafter


37,015Total minimum lease payments

$
116,811     Product
    Warranties
    AccruedWarrantyBalance at October 29, 2005

$
1,746Liabilities accrued


1,865Claims paid


(559
)Changes in liability for pre-existing warranties


(822
)Balance at October 28, 2006

$
2,230Liabilities accrued


8,360Claims paid


(3,724
)Changes in liability for pre-existing warranties


(943
)Balance at October 27, 2007

$
5,923    76




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Manufacturing
    and Purchase Commitments
    Legal
    Proceedings
    In Re Brocade Communications Systems, Inc.
    Initial Public Offering Securities Litigation In Re Initial Public Offering Securities
    Litigation
     77




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Rule 10b-5 Form 10-K
     78




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Legal
    fees associated with indemnification obligations, defense, and
    other related costs
  and/or
  10.
    Derivative
    Accounting Policies  Accounting for Derivative Instruments and Hedging
    Activities
   79




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Foreign
    Currency Cash Flow Hedge
    11.
    Stockholders
    Equity  Tender
    Offer
   80




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stockholder
    Rights Plan
    Employee
    Stock Purchase Plan
    1999 Director
    Option Plan
    1999
    Stock Plan
   81




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    1999
    Nonstatutory Stock Option Plan
    McDATA
    Equity Plans
    Long
    Term Incentive Plan
      Stock
    Options
   82




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Fiscal Year Ended


Fiscal Year Ended


Fiscal Year EndedOctober 27, 2007


October 28, 2006


October 29, 2005Weighted





Weighted





WeightedAverage





Average





AverageExercise





Exercise





ExerciseShares


Price


Shares


Price


Shares


PriceOutstanding at beginning of year


39,954


$
6.35



45,179


$
6.59



49,524


$
7.12Assumed in McDATA acquisition


15,632


$
11.77















Granted


8,992


$
8.92



7,657


$
5.63



11,488


$
5.15Exercised


(15,146
)

$
5.57



(4,498
)

$
5.25



(3,836
)

$
4.98Cancelled


(6,235
)

$
12.30



(8,384
)

$
7.78



(11,997
)

$
8.02Outstanding at end of year


43,197


$
8.20



39,954


$
6.35



45,179


$
6.59Exercisable and vested at end of year


27,236


$
8.91



24,160


$
6.96



25,963


$
7.52       Options Outstanding


Options ExercisableWeighted








WeightedAverage


Weighted





AverageRemaining


Average





ExerciseRange of Exercise Prices

Number


Years


Exercise Price


Number


Price$  0.01 - $  4.43


4,534



4.75


$
3.74



2,251


$
3.41$  4.47 - $  5.59


4,786



5.09


$
5.14



3,327


$
5.11$  5.60 - $  5.84


4,758



3.92


$
5.71



3,695


$
5.70$  5.85 - $  6.19


4,943



5.10


$
6.09



2,618


$
6.09$  6.20 - $  6.42


2,725



4.65


$
6.39



2,036


$
6.39$  6.48 - $  6.54


5,914



5.71


$
6.54



5,889


$
6.54$  6.56 - $  9.01


7,023



6.12


$
8.35



1,088


$
7.48$  9.02 - $ 11.66


4,507



4.50


$
9.80



2,344


$
10.02$ 11.84 - $103.09


4,003



2.57


$
24.76



3,984


$
24.50$124.48 - $124.48


4



2.84


$
124.48



4


$
124.48$  0.01 - $124.48


43,197



4.86


$
8.20



27,236


$
8.91Ending vested and expected to vest


41,160






$
8.28    83




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Equity
    Compensation Plan Information
    A


B


CNumber of SecuritiesRemaining Availablefor Future IssuanceNumber of Securities





Under Equityto be Issued


Weighted Average


Compensation PlansUpon Exercise of


Exercise Price of


(Excluding SecuritiesPlan Category

Outstanding Options


Outstanding Options


Reflected in Column A)Equity compensation plans approved by shareholders(1)


36,096
(3)

$
8.22



44,043
(4)Equity compensation plans not approved by shareholders(2)


7,101
(5)

$
8.31



34,156Total


43,197


$
8.24



78,199     (1)
    
    Consists of the Purchase Plan, the Director Plan, the 1999 Plan,
    the Rhapsody Plan, the Therion Plan and the McDATA Plans. The
    Rhapsody Plan, Therion Plan and McDATA were assumed in
    connection with acquisitions.(2)
    
    Consists solely of the NSO Plan.(3)
    
    Excludes purchase rights accruing under the Purchase Plan. As of
    October 27, 2007, the Purchase Plan had a
    shareholder-approved reserve of 43.9 million shares, of
    which 29.7 million shares were available for future
    issuance.(4)
    
    Consists of shares available for future issuance under the
    Purchase Plan, the Director Plan and the 1999 Plan.(5)
    
    Substantially all shares were granted prior to the fiscal year
    ended October 25, 2003.  Employee
    401(k) Plan
     84




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Reverse/forward
    stock split
  1-for-100 100-for-1
  12.
    Employee
    Benefit and Stock-Based Compensation Plans  Stock
    Options
    Fiscal Year EndedOctober 27,


October 28,


October 29,2007


2006


2005Stock OptionsExpected dividend yield


0.0
%


0.0
%


0.0
%Risk-free interest rate


4.1 - 5.2
%


4.5 - 5.2
%


3.7 - 4.1
%Expected volatility


42.4 - 52.8
%


47.4 - 52.8
%


42.8 - 47.6
%Expected term (in years)


3.8



3.3



2.8        85




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Employee
    Stock Purchase Plan
      Fiscal Year EndedOctober 27,


October 28,


October 29,2007


2006


2005Employee Stock Purchase PlanExpected dividend yield


0.0
%


0.0
%


0.0
%Risk-free interest rate


4.2 -  5.2
%


4.4 -  5.2
%


2.5 - 3.4
%Expected volatility


42.0 - 44.3
%


42.6 - 44.3
%


45.8 - 50.3
%Expected term (in years)


0.5



0.5



0.5     Information
    Calculated as if Fair Value Method Had Applied to All Awards for
    year prior to Fiscal 2006
    YearEndedOctober 29,2005Net income (loss)  as reported

$
43,121Add(Deduct): Stock-based compensation expense (benefit) included
    in reported net income, net of tax


(616
)Deduct: Stock-based compensation expense determined under the
    fair value based method, net of tax


(19,337
)Pro forma net income (loss)

$
23,168Basic net income (loss) per share:As reported

$
0.16Pro forma

$
0.09Diluted net income (loss) per share:As reported

$
0.16Pro forma

$
0.09Restricted Stock Awards    86




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        WeightedAverageGrant-DateShares


Fair Value(In thousand)Nonvested, October 29, 2005


13


$
7.05Granted


1,923


$
4.43Vested


(12
)

$
7.05Forfeited


(76
)

$
4.43Nonvested, October 28, 2006


1,848


$
4.44Assumed under the McDATA merger


1,058


$
3.08Granted





$
0.01Vested


(639
)

$
0.09Forfeited


(137
)

$
1.64Nonvested, October 27, 2007


2,130


$
3.75Expected to vest, October 27, 2007


1,918


$
3.75   Restricted
    Stock Units
    27-month
 87




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      WeightedAverageGrant-DateShares


Fair Value(In thousand)Nonvested, October 28, 2006






Granted


2,798


$
8.29Vested






Forfeited


(79
)

$
8.05Nonvested, October 27, 2007


2,719


$
8.29Nonvested expected to vest at October 27, 2007


2,276


$
8.29       13.
    Income
    Taxes    Fiscal Year EndedOctober 27,


October 28,


October 29,2007


2006


2005United States

$
59,243


$
45,088


$
20,398International


85,673



53,264



34,800Total

$
144,916


$
98,352


$
55,198  88




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year EndedOctober 27,


October 28,


October 29,2007


2006


2005Federal:Current

$
126


$
18,475


$
2,942Deferred










126



18,475



2,942State:Current


1,561



4,893



2,826Deferred










1,561



4,893



2,826Foreign:Current


15,834



7,397



6,309Deferred


(125
)


(42
)


15,709



7,355



6,309Charge in lieu of taxes resulting from initial recognition of
    acquired tax benefits that are allocated to reduce goodwill
    related to the acquired entity


50,647







Total

$
68,043


$
30,723


$
12,077     Fiscal Year EndedOctober 27,


October 28,


October 29,2007


2006


2005Provision for (benefit from) income taxes at statutory rate


35.0
%


35.0
%


35.0
%State taxes, net of federal tax benefit


1.1



3.5



4.1Foreign income taxed at other than U.S. rates


(10.2
)


(8.9
)


(10.7
)In-process research and development










4.9Research and development credit






(0.4
)


(0.3
)Other permanent items


4.5



4.9



2.9Tax on repatriated foreign earnings under Act, net of credits










7.2Change in valuation allowance


16.5



(2.9
)


(21.2
)Provision for income taxes


46.9
%


31.2
%


21.9
%    89




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      October 27,


October 28,2007


2006Net operating loss carryforwards

$
133,428


$
1,597Variable stock option compensation charge


6,423



6,438Tax credit carryforwards


79,991



57,520Reserves and accruals


183,131



74,245Non-U.S.
    stock option expense


167



42Capitalized research expenditures


39,112



19,090Net unrealized losses on investments


334



Other






212Total deferred tax assets


442,586



159,144Less: Valuation allowance


(331,605
)


(159,102
)Net deferred tax assets


110,981



42Acquired intangibles


(110,814
)


Total deferred tax liabilities


(110,814
)


Net deferred tax assets (liabilities)

$
167


$
42        90




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          14.
    Segment
    Information  Disclosures about Segments
    of an Enterprise and Related Information
     91




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##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year EndedOctober 27,


October 28,


October 29,2007


2006


2005RevenuesProduct

$
1,076,529


$
692,940


$
536,834Service


160,334



57,652



37,286Total revenues


1,236,863



750,592



574,120Cost of revenuesProduct


470,977



269,430



228,488Service


104,474



35,754



22,673Total cost of revenues


575,451



305,184



251,161Gross marginProduct


605,552



423,510



308,346Service


55,860



21,898



14,613Total gross margin

$
661,412


$
445,408


$
322,959     Fiscal Year EndedOctober 27,


October 28,


October 29,2007


2006


2005Net Revenues:North America (principally the United States)

$
753,398


$
478,138


$
373,710Europe, the Middle East and Africa


363,211



201,996



139,741Asia Pacific


120,254



70,458



60,669Total

$
1,236,863


$
750,592


$
574,120     15.
    Interest
    and Other Income, net    Fiscal Year EndedOctober 27,


October 28,


October 29,2007


2006


2005Interest income

$
36,989


$
29,233


$
22,270Other income (expense), net


1,512



(135
)


386Total

$
38,501


$
29,098


$
22,656  92




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  16.
    Gain
    (Loss) on Investments, net    17.
    Net
    Income per Share    Fiscal Year EndedOctober 27,


October 28,


October 29,2007


2006


2005Basic net income per shareNet income

$
76,872


$
67,629


$
43,121Weighted-average shares of common stock outstanding


365,206



271,498



268,256Less: Weighted-average shares of common stock subject to
    repurchase


(3,136
)


(1,896
)


(80
)Weighted-average shares used in computing basic net income per
    share


362,070



269,602



268,176Basic net income per share

$
0.21


$
0.25


$
0.16Diluted net income per shareNet income

$
76,872


$
67,629


$
43,121Interest on convertible subordinated debt, net of income tax
    effect


908







Net income, as adjusted


77,780



67,629



43,121Weighted-average shares used in computing basic net income per
    share


362,070



269,602



268,176Dilutive potential common shares


15,488



4,540



2,084Weighted-average shares used in computing diluted net income per
    share


377,558



274,142



270,260Diluted net income per share

$
0.21


$
0.25


$
0.16    93




---



##### Table of Contents



BROCADE
    COMMUNICATIONS SYSTEMS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    18.
    Related
    Party and Other Transactions   94




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e) Form 10-K
      Limitations
    on the Effectiveness of Disclosure Controls and
    Procedures.
    Changes
    in Internal Control over Financial Reporting
  Rules 13a-15 15d-15
  Management
    Report on Internal Control over Financial Reporting
  Rule 13a-15(f) 15d-15(f)
 95




---



##### Table of Contents




    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
    consolidated financial statements.     96




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Internal Control  Integrated
    Framework . Managements Report on Internal Control over Financial
    Reporting
        Internal Control  Integrated Framework
    KPMG
    LLP
    97




---



##### Table of Contents



Item 9B.
    Other
    Information    PART III
    Item 10.
    Directors,
    Executive Officers and Corporate Governance      Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   98




---



##### Table of Contents



PART IV
  Item 15.
    Exhibits
    and Financial Statement Schedules  Form 10-K
    10-K.
      Schedule II  Valuation and Qualifying Accounts


Page 107     Exhibit Index
  ExhibitNumber

Description of Document2
.1

Agreement and Plan of Reorganization by and among Brocade,
    McDATA Corporation and certain other parties dated
    August 7, 2006 (incorporated by reference to
    Exhibit 2.1 from Brocades
    Form 8-K
    filed on August 8, 2006)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 quarter ended July 28, 2007)3
.2

Amended and Restated Bylaws of the Registrant amended as of
    April 19, 2007 (incorporated by reference to
    Exhibit 3.1 from Brocades
    Form 8-K
    filed on April 25, 2007)3
.3

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
.4

Certificate of Elimination of Series A Participating
    Preferred Stock of Brocade (incorporated by reference to
    Exhibit 3.1 from Brocades
    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)4
.2

First Supplemental Indenture dated as of January 29, 2007
    by and among McDATA Corporation, Brocade, and Wells Fargo Bank,
    National Association, as successor in interest to Wells Fargo
    Bank Minnesota, National Association (incorporated by reference
    to Exhibit 4.2 from Brocades
    Form 10-Q
    for the quarter ended April 28, 2007)4
.3

Second Supplemental Indenture dated as of January 29, 2007
    by and among McDATA Corporation, McDATA Services Corporation, a
    Minnesota corporation f/k/a Computer Network Technology
    Corporation, Brocade, and U.S. Bank National Association
    (incorporated by reference to Exhibit 4.2 from
    Brocades
    Form 10-Q
    for the quarter ended April 28, 2007)4
.4

Indenture dated February 7, 2003 by and among McDATA
    Corporation and Wells Fargo Bank Minnesota National Association
    (incorporated by reference to Exhibit 4.2 from
    Brocades
    Form 10-Q
    for the quarter ended April 28, 2007)4
.5

Indenture dated February 20, 2002 by and among Computer
    Network Technology Corporation and U.S. Bank National
    Association (incorporated by reference to Exhibit 4.2 from
    Brocades
    Form 10-Q
    for the quarter ended April 28, 2007)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) 99




---



##### Table of Contents



ExhibitNumber

Description of Document10
.2

Master Lease Agreement between Spieker Properties and Brocade
    dated December 17, 1999 (incorporated by reference to
    Exhibit 10.25 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 31, 1999, as amended)10
.3

First Amendment to Lease between Spieker Properties and Brocade
    dated February 16, 2000 (incorporated by reference to
    Exhibit 10.22 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 28, 2000)10
.4

Second Amendment to Lease between Spieker Properties and Brocade
    dated August 11, 2000 (incorporated by reference to
    Exhibit 10.23 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 28, 2000)10
.5

Master Lease Agreement between Spieker Properties and Brocade
    dated July 26, 2000 (incorporated by reference to
    Exhibit 10.27 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 28, 2000)10
.6#

Purchase Agreement between EMC Corporation and Brocade dated
    January 25, 2000 (EMC Purchase Agreement) (incorporated by
    reference to Exhibit 10.29 from Brocades Annual
    Report on
    Form 10-K
    for the fiscal year ended October 28, 2000)10
.7#

Extension Agreement between EMC Corporation and Brocade dated
    December 18, 2000 (incorporated by reference to
    Exhibit 10.23 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 27, 2001)10
.8

Extension Agreement between EMC Corporation and Brocade dated
    November 13, 2002 (incorporated by reference to
    Exhibit 10.24 from Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended January 25, 2003)10
.9#

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
.10

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
.11#

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
.12#

Amendment #3 to Statement of Work #1 between International
    Business Machines Corporation and Brocade (incorporated by
    reference to Exhibit 10.27 from Brocades Annual
    Report on
    Form 10-K
    for the fiscal year ended October 27, 2001)10
.13#

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
.14#

Statement of Work #2 between International Business Machines
    Corporation and Brocade (incorporated by reference to
    Exhibit 10.29 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 27, 2001)10
.15

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
.16#

Amendment No. 5 to Statement of Work No. 1 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 27, 2002)10
.17#

Amendment No. 6 to Statement of Work No. 1 between
    International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.3 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 27, 2002)10
.18#

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
.19#

Amendment No. 8 to Statement of Work No. 1 between
    International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.36 from
    Brocades
    Form 10-Q
    for the quarter ended January 25, 2003) 100




---



##### Table of Contents



ExhibitNumber

Description of Document10
.20#

Amendment No. 1 to Statement of Work No. 2 between
    International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.4 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 27, 2002)10
.21

Amendment No. 2 to Statement of Work No. 2 between
    International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.5 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 27, 2002)10
.22#

OEM Purchase Agreement between Brocade and Hewlett-Packard
    Company dated January 28, 2000 (2000 OEM Purchase
    Agreement) (incorporated by reference to Exhibit 10.38 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.23#

Amendment to 2000 OEM Purchase Agreement between Brocade and
    Hewlett-Packard Company dated April 20, 2001 (incorporated
    by reference to Exhibit 10.39 from Brocades Quarterly
    Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.24

Letter Amendment to 2000 OEM Purchase Agreement between Brocade
    and Hewlett-Packard Company dated January 25, 2002
    (incorporated by reference to Exhibit 10.40 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.25#

OEM Purchase Agreement between Brocade and Hewlett-Packard
    Company dated April 20, 2001 (2001 OEM Purchase Agreement)
    (incorporated by reference to Exhibit 10.41 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.26#

Amendment No. 1 to 2001 OEM Purchase Agreement between
    Brocade and Hewlett-Packard Company dated July 1, 2001
    (incorporated by reference to Exhibit 10.42 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.27#

Amendment No. 2 to 2001 OEM Purchase Agreement between
    Brocade and Hewlett-Packard Company dated November 6, 2001
    (incorporated by reference to Exhibit 10.43 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.28#

Amendment No. 3 to 2001 OEM Purchase Agreement between
    Brocade and Hewlett-Packard Company dated February 1, 2002
    (incorporated by reference to Exhibit 10.44 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.29#

Amendment No. 4 to 2001 OEM Purchase Agreement between
    Brocade and Hewlett-Packard Company dated June 5, 2002
    (incorporated by reference to Exhibit 10.45 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.30#

OEM Purchase Agreement between Brocade and Hewlett-Packard
    Company dated December 16, 2002. (incorporated by reference
    to Exhibit 10.48 from Brocades
    Form 10-Q
    for the quarter ended January 25, 2003)10
.31#

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
.32

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
.33#

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
.34#

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
.35

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
.36#

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) 101




---



##### Table of Contents



ExhibitNumber

Description of Document10
.37#

Amendment No. 2 to EMC Purchase Agreement between Brocade
    and EMC dated February 18, 2003. (incorporated by reference
    to Exhibit 10.55 from Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 26, 2003)10
.38#

Amendment No. 3 to EMC Purchase Agreement between Brocade
    and EMC dated July 30, 2003 (incorporated by reference to
    Exhibit 10.56 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 25, 2003)10
.39#

Amendment #10 to Statement of Work #1 between International
    Business Machines Corporation and Brocade (incorporated by
    reference to Exhibit 10.55 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.40#

Amendment #11 to Statement of Work #1 between International
    Business Machines Corporation and Brocade (incorporated by
    reference to Exhibit 10.56 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.41#

Amendment #14 to Statement of Work #1 between International
    Business Machines Corporation and Brocade (incorporated by
    reference to Exhibit 10.59 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.42#

Statement of Work #3 between International Business Machines
    Corporation and Brocade dated December 15, 2003
    (incorporated by reference to Exhibit 10.60 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.43#

Amendment No. 4 to EMC Purchase Agreement between Brocade
    and EMC dated October 29, 2003 (incorporated by reference
    to Exhibit 10.61 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.44

Third Amendment to Lease between Spieker Properties and Brocade
    Communications Systems, Inc. dated November 30, 2000
    (incorporated by reference to Exhibit 10.62 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.45

Fourth Amendment to Lease between Spieker Properties and Brocade
    Communications Systems, Inc. dated November 18, 2003
    (incorporated by reference to Exhibit 10.63 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.46

Fifth Amendment to Lease between Spieker Properties and Brocade
    Communications Systems, Inc. dated November 18, 2003
    (incorporated by reference to Exhibit 10.64 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.47

Sixth Amendment to Lease between Spieker Properties and Brocade
    Communications Systems, Inc. dated November 18, 2003
    (incorporated by reference to Exhibit 10.65 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.48

Real Estate Sale and Lease Termination Agreement between
    EOP-Skyport I, LLC and Brocade effective November 18,
    2003 (incorporated by reference to Exhibit 10.66 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.49

Grant Deed from EOP-Skyport I, L.L.C to Brocade
    Communications Systems Skyport LLC dated November 18, 2003
    (incorporated by reference to Exhibit 10.67 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.50

Fourth Amendment to the Skyport Plaza Declaration of Common
    Easements, Covenants, Conditions and Restrictions dated
    October 18, 2003 (incorporated by reference to
    Exhibit 10.68 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.51

Guaranty of Brocade Communications Systems, Inc. to EOP
    Skyport I, L.L.C dated November 18, 2003 (incorporated
    by reference to Exhibit 10.69 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.52

Right of First Offer Agreement between EOP-Skyport I, L.L.C
    to Brocade Communications Systems Skyport LLC dated
    November 18, 2003 (incorporated by reference to
    Exhibit 10.70 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.53#

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
.54#

Amendment No. 6 dated April 27, 2004 to EMC Purchase
    Agreement between Brocade and EMC (incorporated by reference to
    Exhibit 10.72 from Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended May 1, 2004) 102




---



##### Table of Contents



ExhibitNumber

Description of Document10
.55#

Amendment No. 5 dated May 4, 2004 to EMC Purchase
    Agreement between Brocade and EMC (incorporated by reference to
    Exhibit 10.73 from Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 31, 2004)10
.56#

Amendment #1 dated May 12, 2004 to Statement of Work #3
    between International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.76 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 31, 2004)10
.57#

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
.58#

Amendment No. 7 dated July 28, 2004 to EMC Purchase
    Agreement between Brocade and EMC (incorporated by reference to
    Exhibit 10.78 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 30, 2004)10
.59#

Amendment No. 8 dated November 1, 2004 to EMC Purchase
    Agreement between Brocade and EMC (incorporated by reference to
    Exhibit 10.79 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 30, 2004)10
.60#

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
.61#

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
.62*

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
.63*

Employment Letter for Don Jaworski (incorporated by reference to
    Exhibit 10.86 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 30, 2004)10
.64#

Amendment #19 dated January 28, 2005 to Statement of Work
    #1 between International Business Machines Corporation and
    Brocade (incorporated by reference to Exhibit 10.88 from
    Brocades quarterly report on
    Form 10-Q
    for the quarter ended January 29, 2005)10
.65#

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 quarter ended January 29, 2005)10
.66#

Amendment #10 dated March 20, 2005 to EMC Purchase
    Agreement between Brocade and EMC (incorporated by reference to
    Exhibit 10.1 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended April 30, 2005)10
.67#

Amendment #11 dated March 25, 2005 to EMC Purchase
    Agreement between Brocade and EMC (incorporated by reference to
    Exhibit 10.2 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended April 30, 2005)10
.68*

Senior Leadership Plan as amended and restated as of
    November 16, 2007 (incorporated by reference to
    Exhibit 10.1 from Brocades current report on
    Form 8-K
    as filed on November 21, 2007)10
.69#

Amendment #21 to Statement of Work No. 1 between
    International Business Machines Corporation and Brocade dated
    June 28, 2005 (incorporated by reference to
    Exhibit 10.3 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 30, 2005)10
.70#

Amendment #13 dated July 12, 2005 to EMC Purchase Agreement
    between Brocade and EMC (incorporated by reference to
    Exhibit 10.4 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 30, 2005)10
.71*

Amended and Restated 1999 Stock Plan as amended and restated on
    November 17, 2006 and related forms of agreements
    (incorporated by reference to Exhibit 10.3 from
    Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 28, 2007)10
.72*

Amended and Restated 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 quarter ended July 30, 2005)10
.73*

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 quarter ended July 30, 2005) 103




---



##### Table of Contents



ExhibitNumber

Description of Document10
.74*

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
.75#

Amendment #22 to Statement of Work No. 1 between
    International Business Machines Corporation and Brocade dated
    August 12, 2005 (incorporated by reference to
    Exhibit 10.93 from Brocades annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005)10
.76#

Amendment #6 to Statement of Work No. 3 between
    International Business Machines Corporation and Brocade dated
    September 13, 2005 (incorporated by reference to
    Exhibit 10.94 from Brocades annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005)10
.77#

Statement of Work No. 4 between International Business
    Machines Corporation and Brocade dated August 12, 2005
    (incorporated by reference to Exhibit 10.95 from
    Brocades annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005)10
.78#

Amendment #14 dated October 24, 2005 to EMC Purchase
    Agreement between Brocade and EMC dated January 25, 2000
    (incorporated by reference to Exhibit 10.96 from
    Brocades annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005)10
.79

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 quarter ended January 28, 2006)10
.80**

Notice of partial termination of Tolling Agreement, dated
    September 11, 200610
.81#

Amendment #23 dated December 15, 2005 to Statement of Work
    No. 1 between International Business Machines Corporation
    and Brocade dated August 12, 2005 (incorporated by
    reference to Exhibit 10.3 from Brocades quarterly
    report on
    Form 10-Q
    for the quarter ended January 28, 2006)10
.82

Amendment #24 dated December 15, 2005 to Statement of Work
    No. 1 between International Business Machines Corporation
    and Brocade dated August 12, 2005 (incorporated by
    reference to Exhibit 10.4 from Brocades quarterly
    report on
    Form 10-Q
    for the quarter ended January 28, 2006)10
.83

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 quarter ended April 29, 2006)10
.84

Amendment No. 12 to the OEM Purchase Agreement dated
    January 25, 2000 (effective as of January 31,
    2006) by and among Brocade, Brocade Communications
    Switzerland SarL, and EMC Corporation (incorporated by
    references to Exhibit 10.2 from Brocades quarterly
    report on
    Form 10-Q
    for the quarter ended April 29, 2006)10
.85

Amendment #25 effective April 14, 2006 to Statement of Work
    No. 1 between International Business Machines Corporation
    and Brocade dated August 12, 2005 (incorporated by
    reference to Exhibit 10.3 from Brocades quarterly
    report on
    Form 10-Q
    for the quarter ended April 29, 2006)10
.86

Amendment #4 dated March 30, 2006 to the Goods Agreement
    between International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.4 from
    Brocades quarterly report on
    Form 10-Q
    for the quarter ended April 29, 2006)10
.87

Amendment #1 to Statement of Work No. 4 between
    International Business Machines Corporation and Brocade
    effective May 31, 2006 (incorporated by reference to
    Exhibit 10.1 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 29, 2006)10
.88

Amendment #7 to Statement of Work No. 3 between
    International Business Machines Corporation and Brocade dated
    July 19, 2006 (incorporated by reference to
    Exhibit 10.2 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 29, 2006)10
.89#

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
.90#

Amendment #27 dated October 3, 2006 to Statement of Work
    No. 1 between International Business Machines Corporation
    and Brocade dated August 12, 2005 (incorporated by
    reference to Exhibit 10.104 from Brocades annual
    report on
    Form 10-K
    for the fiscal year ended October 28, 2006) 104




---



##### Table of Contents



ExhibitNumber

Description of Document10
.91#

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
.92#

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
.93

Amendment #28 dated January 2, 2007 to Statement of Work
    No. 1 between International Business Machines Corporation
    and Brocade dated August 12, 2005 (incorporated by
    reference to Exhibit 10.2 from Brocades quarterly
    report on
    Form 10-Q
    for the quarter ended January 27, 2007)10
.94

Guaranty by Brocade dated January 29, 2007 related to the
    Indenture dated February 7, 2003 (incorporated by reference
    to Exhibit 10.1 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended April 28, 2007)10
.95

Guaranty by Brocade dated January 29, 2007 related to the
    Indenture dated February 20, 2002 (incorporated by
    reference to Exhibit 10.2 from Brocades quarterly
    report on
    Form 10-Q
    for the quarter ended April 28, 2007)10
.96

Statement of Work #5 dated April 2, 2007 between
    International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.5 from
    Brocades quarterly report on
    Form 10-Q
    for the quarter ended April 28, 2007)10
.97

Amendment #29 dated March 19, 2007 to Statement of Work #1
    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 quarter ended April 28, 2007)10
.98

Amendment #19 dated April 26, 2007 to Purchase Agreement
    between EMC and Brocade (incorporated by reference to
    Exhibit 10.7 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended April 28, 2007)10
.99*

Amended and Restated Change of Control Retention Agreement
    between Brocade and Michael Klayko effective May 11, 2007
    (incorporated by reference to Exhibit 10.1 from
    Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 28, 2007)10
.100*

Form of Amended and Restated Change of Control Retention
    Agreement effective May 11, 2007 between Brocade and each
    of Richard Deranleau, T.J. Grewal, Don Jaworski, Luc Moyen,
    Tyler Wall and Ian Whiting (incorporated by reference to
    Exhibit 10.2 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 28, 2007)10
.101

Statement of Work #6 dated May 6, 2007 between
    International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.5 from
    Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 28, 2007)10
.102/**

Amendment #5, dated April 20, 2007 to OEM Purchase
    Agreement between Hewlett Packard Company and Brocade10
.103/**

Amendment #8, dated September 6, 2007 to OEM Purchase
    Agreement between Hewlett Packard Company and Brocade10
.104/**

Statement of Work #7, dated October 1, 2007 to Goods
    Agreement between International Business Machines and Brocade12
.1**

Statement of Computation of Ratio of Earnings to Fixed Charges21
.1**

Subsidiaries of Registrant23
.1**

Consent of Independent Registered Public Accounting Firm24
.1**

Power of attorney (see signature page)31
.1**

Rule 13a-14(a)/15d-14(a)
    Certification by the Chief Executive Officer31
.2**

Rule 13a-14(a)/15d-14(a)
    Certification by the Chief Financial Officer32
.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     *
    
    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. 105




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##### Table of Contents



#
    
    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. 106




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##### Table of Contents



SCHEDULE II
  VALUATION
    AND QUALIFYING ACCOUNTS
  Years Ended October 27, 2007, October 28, 2006 and
    October 29, 2005
  Balance at


Additions





Balance atBeginning of


Charged to





End ofDescription

Period


Revenues


Deductions*


Period(In thousands)Allowance for doubtful accounts:2007

$
694


$
2,656


$
(920
)

$
2,4302006

$
467


$
427


$
(200
)

$
6942005

$
409


$
200


$
(142
)

$
467Sales allowances:2007

$
4,148


$
2,745


$
(2,818
)

$
4,0752006

$
4,475


$
3,099


$
(3,426
)

$
4,1482005

$
3,452


$
2,755


$
(1,732
)

$
4,475     *
    
    Deductions related to the allowance for doubtful accounts and
    sales allowances represent amounts written off against the
    allowance less recoveries. 107




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##### Table of Contents



SIGNATURES
      
       POWER OF
    ATTORNEY
  Form 10-K
    Signature

Title

Date/s/  Michael
    KlaykoMichael
    Klayko

Chief Executive Officer
    (Principal Executive Officer
    and Director)

December 17, 2007/s/  Richard
    DeranleauRichard
    Deranleau

Chief Financial Officer
    and Vice President, Finance
    (Principal Financial 
    and Accounting Officer)

December 20, 2007/s/  David
    L. HouseDavid
    L. House

Chairman of the Board of Directors

December 17, 2007/s/  L.
    William KrauseL.
    William Krause

Director

December 14, 2007/s/  Glenn
    JonesGlenn
    Jones

Director

December 17, 2007/s/  Michael
    J. RoseMichael
    J. Rose

Director

December 16, 2007/s/  Sanjay
    VaswaniSanjay
    Vaswani

Director

December 18, 2007 108




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##### Table of Contents



Signature

Title

Date/s/  Robert
    WalkerRobert
    Walker

Director

December 18, 2007/s/  Renato
    DiPentimaRenato
    DiPentima

Director

December 17, 2007/s/  John
    GerdelmanJohn
    Gerdelman

Director

December 16, 2007  109




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##### Table of Contents



Exhibit Index
  ExhibitNumber

Description of Document2
.1

Agreement and Plan of Reorganization by and among Brocade,
    McDATA Corporation and certain other parties dated
    August 7, 2006 (incorporated by reference to
    Exhibit 2.1 from Brocades
    Form 8-K
    filed on August 8, 2006)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 quarter ended July 28, 2007)3
.2

Amended and Restated Bylaws of the Registrant amended as of
    April 19, 2007 (incorporated by reference to
    Exhibit 3.1 from Brocades
    Form 8-K
    filed on April 25, 2007)3
.3

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
.4

Certificate of Elimination of Series A Participating
    Preferred Stock of Brocade (incorporated by reference to
    Exhibit 3.1 from Brocades
    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)4
.2

First Supplemental Indenture dated as of January 29, 2007
    by and among McDATA Corporation, Brocade, and Wells Fargo Bank,
    National Association, as successor in interest to Wells Fargo
    Bank Minnesota, National Association (incorporated by reference
    to Exhibit 4.2 from Brocades
    Form 10-Q
    for the quarter ended April 28, 2007)4
.3

Second Supplemental Indenture dated as of January 29, 2007
    by and among McDATA Corporation, McDATA Services Corporation, a
    Minnesota corporation f/k/a Computer Network Technology
    Corporation, Brocade, and U.S. Bank National Association
    (incorporated by reference to Exhibit 4.2 from
    Brocades
    Form 10-Q
    for the quarter ended April 28, 2007)4
.4

Indenture dated February 7, 2003 by and among McDATA
    Corporation and Wells Fargo Bank Minnesota National Association
    (incorporated by reference to Exhibit 4.2 from
    Brocades
    Form 10-Q
    for the quarter ended April 28, 2007)4
.5

Indenture dated February 20, 2002 by and among Computer
    Network Technology Corporation and U.S. Bank National
    Association (incorporated by reference to Exhibit 4.2 from
    Brocades
    Form 10-Q
    for the quarter ended April 28, 2007)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

Master Lease Agreement between Spieker Properties and Brocade
    dated December 17, 1999 (incorporated by reference to
    Exhibit 10.25 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 31, 1999, as amended)10
.3

First Amendment to Lease between Spieker Properties and Brocade
    dated February 16, 2000 (incorporated by reference to
    Exhibit 10.22 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 28, 2000)10
.4

Second Amendment to Lease between Spieker Properties and Brocade
    dated August 11, 2000 (incorporated by reference to
    Exhibit 10.23 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 28, 2000)10
.5

Master Lease Agreement between Spieker Properties and Brocade
    dated July 26, 2000 (incorporated by reference to
    Exhibit 10.27 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 28, 2000)10
.6#

Purchase Agreement between EMC Corporation and Brocade dated
    January 25, 2000 (EMC Purchase Agreement) (incorporated by
    reference to Exhibit 10.29 from Brocades Annual
    Report on
    Form 10-K
    for the fiscal year ended October 28, 2000)10
.7#

Extension Agreement between EMC Corporation and Brocade dated
    December 18, 2000 (incorporated by reference to
    Exhibit 10.23 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 27, 2001)10
.8

Extension Agreement between EMC Corporation and Brocade dated
    November 13, 2002 (incorporated by reference to
    Exhibit 10.24 from Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended January 25, 2003) 110




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##### Table of Contents



ExhibitNumber

Description of Document10
.9#

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
.10

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
.11#

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
.12#

Amendment #3 to Statement of Work #1 between International
    Business Machines Corporation and Brocade (incorporated by
    reference to Exhibit 10.27 from Brocades Annual
    Report on
    Form 10-K
    for the fiscal year ended October 27, 2001)10
.13#

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
.14#

Statement of Work #2 between International Business Machines
    Corporation and Brocade (incorporated by reference to
    Exhibit 10.29 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 27, 2001)10
.15

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
.16#

Amendment No. 5 to Statement of Work No. 1 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 27, 2002)10
.17#

Amendment No. 6 to Statement of Work No. 1 between
    International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.3 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 27, 2002)10
.18#

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
.19#

Amendment No. 8 to Statement of Work No. 1 between
    International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.36 from
    Brocades
    Form 10-Q
    for the quarter ended January 25, 2003)10
.20#

Amendment No. 1 to Statement of Work No. 2 between
    International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.4 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 27, 2002)10
.21

Amendment No. 2 to Statement of Work No. 2 between
    International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.5 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 27, 2002)10
.22#

OEM Purchase Agreement between Brocade and Hewlett-Packard
    Company dated January 28, 2000 (2000 OEM Purchase
    Agreement) (incorporated by reference to Exhibit 10.38 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.23#

Amendment to 2000 OEM Purchase Agreement between Brocade and
    Hewlett-Packard Company dated April 20, 2001 (incorporated
    by reference to Exhibit 10.39 from Brocades Quarterly
    Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.24

Letter Amendment to 2000 OEM Purchase Agreement between Brocade
    and Hewlett-Packard Company dated January 25, 2002
    (incorporated by reference to Exhibit 10.40 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.25#

OEM Purchase Agreement between Brocade and Hewlett-Packard
    Company dated April 20, 2001 (2001 OEM Purchase Agreement)
    (incorporated by reference to Exhibit 10.41 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.26#

Amendment No. 1 to 2001 OEM Purchase Agreement between
    Brocade and Hewlett-Packard Company dated July 1, 2001
    (incorporated by reference to Exhibit 10.42 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002) 111




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##### Table of Contents



ExhibitNumber

Description of Document10
.27#

Amendment No. 2 to 2001 OEM Purchase Agreement between
    Brocade and Hewlett-Packard Company dated November 6, 2001
    (incorporated by reference to Exhibit 10.43 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.28#

Amendment No. 3 to 2001 OEM Purchase Agreement between
    Brocade and Hewlett-Packard Company dated February 1, 2002
    (incorporated by reference to Exhibit 10.44 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.29#

Amendment No. 4 to 2001 OEM Purchase Agreement between
    Brocade and Hewlett-Packard Company dated June 5, 2002
    (incorporated by reference to Exhibit 10.45 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 27, 2002)10
.30#

OEM Purchase Agreement between Brocade and Hewlett-Packard
    Company dated December 16, 2002. (incorporated by reference
    to Exhibit 10.48 from Brocades
    Form 10-Q
    for the quarter ended January 25, 2003)10
.31#

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
.32

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
.33#

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
.34#

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
.35

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
.36#

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)10
.37#

Amendment No. 2 to EMC Purchase Agreement between Brocade
    and EMC dated February 18, 2003. (incorporated by reference
    to Exhibit 10.55 from Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended April 26, 2003)10
.38#

Amendment No. 3 to EMC Purchase Agreement between Brocade
    and EMC dated July 30, 2003 (incorporated by reference to
    Exhibit 10.56 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 25, 2003)10
.39#

Amendment #10 to Statement of Work #1 between International
    Business Machines Corporation and Brocade (incorporated by
    reference to Exhibit 10.55 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.40#

Amendment #11 to Statement of Work #1 between International
    Business Machines Corporation and Brocade (incorporated by
    reference to Exhibit 10.56 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.41#

Amendment #14 to Statement of Work #1 between International
    Business Machines Corporation and Brocade (incorporated by
    reference to Exhibit 10.59 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.42#

Statement of Work #3 between International Business Machines
    Corporation and Brocade dated December 15, 2003
    (incorporated by reference to Exhibit 10.60 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.43#

Amendment No. 4 to EMC Purchase Agreement between Brocade
    and EMC dated October 29, 2003 (incorporated by reference
    to Exhibit 10.61 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004) 112




---



##### Table of Contents



ExhibitNumber

Description of Document10
.44

Third Amendment to Lease between Spieker Properties and Brocade
    Communications Systems, Inc. dated November 30, 2000
    (incorporated by reference to Exhibit 10.62 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.45

Fourth Amendment to Lease between Spieker Properties and Brocade
    Communications Systems, Inc. dated November 18, 2003
    (incorporated by reference to Exhibit 10.63 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.46

Fifth Amendment to Lease between Spieker Properties and Brocade
    Communications Systems, Inc. dated November 18, 2003
    (incorporated by reference to Exhibit 10.64 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.47

Sixth Amendment to Lease between Spieker Properties and Brocade
    Communications Systems, Inc. dated November 18, 2003
    (incorporated by reference to Exhibit 10.65 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.48

Real Estate Sale and Lease Termination Agreement between
    EOP-Skyport I, LLC and Brocade effective November 18,
    2003 (incorporated by reference to Exhibit 10.66 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.49

Grant Deed from EOP-Skyport I, L.L.C to Brocade
    Communications Systems Skyport LLC dated November 18, 2003
    (incorporated by reference to Exhibit 10.67 from
    Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.50

Fourth Amendment to the Skyport Plaza Declaration of Common
    Easements, Covenants, Conditions and Restrictions dated
    October 18, 2003 (incorporated by reference to
    Exhibit 10.68 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.51

Guaranty of Brocade Communications Systems, Inc. to EOP
    Skyport I, L.L.C dated November 18, 2003 (incorporated
    by reference to Exhibit 10.69 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.52

Right of First Offer Agreement between EOP-Skyport I, L.L.C
    to Brocade Communications Systems Skyport LLC dated
    November 18, 2003 (incorporated by reference to
    Exhibit 10.70 from Brocades Report on
    Form 10-Q
    for the fiscal quarter ended January 24, 2004)10
.53#

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
.54#

Amendment No. 6 dated April 27, 2004 to EMC Purchase
    Agreement between Brocade and EMC (incorporated by reference to
    Exhibit 10.72 from Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended May 1, 2004)10
.55#

Amendment No. 5 dated May 4, 2004 to EMC Purchase
    Agreement between Brocade and EMC (incorporated by reference to
    Exhibit 10.73 from Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 31, 2004)10
.56#

Amendment #1 dated May 12, 2004 to Statement of Work #3
    between International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.76 from
    Brocades Quarterly Report on
    Form 10-Q
    for the fiscal quarter ended July 31, 2004)10
.57#

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
.58#

Amendment No. 7 dated July 28, 2004 to EMC Purchase
    Agreement between Brocade and EMC (incorporated by reference to
    Exhibit 10.78 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 30, 2004)10
.59#

Amendment No. 8 dated November 1, 2004 to EMC Purchase
    Agreement between Brocade and EMC (incorporated by reference to
    Exhibit 10.79 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 30, 2004)10
.60#

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
.61#

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) 113




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##### Table of Contents



ExhibitNumber

Description of Document10
.62*

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
.63*

Employment Letter for Don Jaworski (incorporated by reference to
    Exhibit 10.86 from Brocades Annual Report on
    Form 10-K
    for the fiscal year ended October 30, 2004)10
.64#

Amendment #19 dated January 28, 2005 to Statement of Work
    #1 between International Business Machines Corporation and
    Brocade (incorporated by reference to Exhibit 10.88 from
    Brocades quarterly report on
    Form 10-Q
    for the quarter ended January 29, 2005)10
.65#

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 quarter ended January 29, 2005)10
.66#

Amendment #10 dated March 20, 2005 to EMC Purchase
    Agreement between Brocade and EMC (incorporated by reference to
    Exhibit 10.1 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended April 30, 2005)10
.67#

Amendment #11 dated March 25, 2005 to EMC Purchase
    Agreement between Brocade and EMC (incorporated by reference to
    Exhibit 10.2 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended April 30, 2005)10
.68*

Senior Leadership Plan as amended and restated as of
    November 16, 2007 (incorporated by reference to
    Exhibit 10.1 from Brocades current report on
    Form 8-K
    as filed on November 21, 2007)10
.69#

Amendment #21 to Statement of Work No. 1 between
    International Business Machines Corporation and Brocade dated
    June 28, 2005 (incorporated by reference to
    Exhibit 10.3 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 30, 2005)10
.70#

Amendment #13 dated July 12, 2005 to EMC Purchase Agreement
    between Brocade and EMC (incorporated by reference to
    Exhibit 10.4 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 30, 2005)10
.71*

Amended and Restated 1999 Stock Plan as amended and restated on
    November 17, 2006 and related forms of agreements
    (incorporated by reference to Exhibit 10.3 from
    Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 28, 2007)10
.72*

Amended and Restated 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 quarter ended July 30, 2005)10
.73*

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 quarter ended July 30, 2005)10
.74*

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
.75#

Amendment #22 to Statement of Work No. 1 between
    International Business Machines Corporation and Brocade dated
    August 12, 2005 (incorporated by reference to
    Exhibit 10.93 from Brocades annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005)10
.76#

Amendment #6 to Statement of Work No. 3 between
    International Business Machines Corporation and Brocade dated
    September 13, 2005 (incorporated by reference to
    Exhibit 10.94 from Brocades annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005)10
.77#

Statement of Work No. 4 between International Business
    Machines Corporation and Brocade dated August 12, 2005
    (incorporated by reference to Exhibit 10.95 from
    Brocades annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005)10
.78#

Amendment #14 dated October 24, 2005 to EMC Purchase
    Agreement between Brocade and EMC dated January 25, 2000
    (incorporated by reference to Exhibit 10.96 from
    Brocades annual report on
    Form 10-K
    for the fiscal year ended October 29, 2005)10
.79

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 quarter ended January 28, 2006) 114




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##### Table of Contents



ExhibitNumber

Description of Document10
.80**

Notice of partial termination of Tolling Agreement, dated
    September 11, 200610
.81#

Amendment #23 dated December 15, 2005 to Statement of Work
    No. 1 between International Business Machines Corporation
    and Brocade dated August 12, 2005 (incorporated by
    reference to Exhibit 10.3 from Brocades quarterly
    report on
    Form 10-Q
    for the quarter ended January 28, 2006)10
.82

Amendment #24 dated December 15, 2005 to Statement of Work
    No. 1 between International Business Machines Corporation
    and Brocade dated August 12, 2005 (incorporated by
    reference to Exhibit 10.4 from Brocades quarterly
    report on
    Form 10-Q
    for the quarter ended January 28, 2006)10
.83

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 quarter ended April 29, 2006)10
.84

Amendment No. 12 to the OEM Purchase Agreement dated
    January 25, 2000 (effective as of January 31,
    2006) by and among Brocade, Brocade Communications
    Switzerland SarL, and EMC Corporation (incorporated by
    references to Exhibit 10.2 from Brocades quarterly
    report on
    Form 10-Q
    for the quarter ended April 29, 2006)10
.85

Amendment #25 effective April 14, 2006 to Statement of Work
    No. 1 between International Business Machines Corporation
    and Brocade dated August 12, 2005 (incorporated by
    reference to Exhibit 10.3 from Brocades quarterly
    report on
    Form 10-Q
    for the quarter ended April 29, 2006)10
.86

Amendment #4 dated March 30, 2006 to the Goods Agreement
    between International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.4 from
    Brocades quarterly report on
    Form 10-Q
    for the quarter ended April 29, 2006)10
.87

Amendment #1 to Statement of Work No. 4 between
    International Business Machines Corporation and Brocade
    effective May 31, 2006 (incorporated by reference to
    Exhibit 10.1 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 29, 2006)10
.88

Amendment #7 to Statement of Work No. 3 between
    International Business Machines Corporation and Brocade dated
    July 19, 2006 (incorporated by reference to
    Exhibit 10.2 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 29, 2006)10
.89#

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
.90#

Amendment #27 dated October 3, 2006 to Statement of Work
    No. 1 between International Business Machines Corporation
    and Brocade dated August 12, 2005 (incorporated by
    reference to Exhibit 10.104 from Brocades annual
    report on
    Form 10-K
    for the fiscal year ended October 28, 2006)10
.91#

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
.92#

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
.93

Amendment #28 dated January 2, 2007 to Statement of Work
    No. 1 between International Business Machines Corporation
    and Brocade dated August 12, 2005 (incorporated by
    reference to Exhibit 10.2 from Brocades quarterly
    report on
    Form 10-Q
    for the quarter ended January 27, 2007)10
.94

Guaranty by Brocade dated January 29, 2007 related to the
    Indenture dated February 7, 2003 (incorporated by reference
    to Exhibit 10.1 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended April 28, 2007)10
.95

Guaranty by Brocade dated January 29, 2007 related to the
    Indenture dated February 20, 2002 (incorporated by
    reference to Exhibit 10.2 from Brocades quarterly
    report on
    Form 10-Q
    for the quarter ended April 28, 2007)10
.96

Statement of Work #5 dated April 2, 2007 between
    International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.5 from
    Brocades quarterly report on
    Form 10-Q
    for the quarter ended April 28, 2007) 115




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##### Table of Contents



ExhibitNumber

Description of Document10
.97

Amendment #29 dated March 19, 2007 to Statement of Work #1
    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 quarter ended April 28, 2007)10
.98

Amendment #19 dated April 26, 2007 to Purchase Agreement
    between EMC and Brocade (incorporated by reference to
    Exhibit 10.7 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended April 28, 2007)10
.99*

Amended and Restated Change of Control Retention Agreement
    between Brocade and Michael Klayko effective May 11, 2007
    (incorporated by reference to Exhibit 10.1 from
    Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 28, 2007)10
.100*

Form of Amended and Restated Change of Control Retention
    Agreement effective May 11, 2007 between Brocade and each
    of Richard Deranleau, T.J. Grewal, Don Jaworski, Luc Moyen,
    Tyler Wall and Ian Whiting (incorporated by reference to
    Exhibit 10.2 from Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 28, 2007)10
.101

Statement of Work #6 dated May 6, 2007 between
    International Business Machines Corporation and Brocade
    (incorporated by reference to Exhibit 10.5 from
    Brocades quarterly report on
    Form 10-Q
    for the quarter ended July 28, 2007)10
.102/**

Amendment #5, dated April 20, 2007 to OEM Purchase
    Agreement between Hewlett Packard Company and Brocade10
.103/**

Amendment #8, dated September 6, 2007 to OEM Purchase
    Agreement between Hewlett Packard Company and Brocade10
.104/**

Statement of Work #7, dated October 1, 2007 to Goods
    Agreement between International Business Machines and Brocade12
.1**

Statement of Computation of Ratio of Earnings to Fixed Charges21
.1**

Subsidiaries of Registrant23
.1**

Consent of Independent Registered Public Accounting Firm24
.1**

Power of attorney (see signature page)31
.1**

Rule 13a-14(a)/15d-14(a)
    Certification by the Chief Executive Officer31
.2**

Rule 13a-14(a)/15d-14(a)
    Certification by the Chief Financial Officer32
.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     *
    
    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.#
    
    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. 116