McData squares off against Brocade, Cisco

Posted on October 01, 2003

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Acquires Nishan, Sanera

By Dave Simpson

Analysts say that McData's acquisitions of Nishan Systems and Sanera may level the playing field in the brewing battle among Brocade, Cisco, and McData.

"It's a smart strategic move because it fills in all the holes in McData's product line that their competitors were pointing out," says Marc Staimer, president of Dragon Slayer Consulting, in Beaverton, OR. "But," he adds, "the big challenge will be the integration of the [hardware] product lines and McData's software."

The acquisition of Nishan (for $83 million in cash) gives McData a line of internetworking switches, or routers, that supports multiple storage networking protocols, including Fibre Channel and IP storage protocols such as iSCSI, FCIP, and iFCP. Nishan's routers are already interoperable with McData's Sphereon fabric switches and Intrepid directors. McData will offer the Nishan routers both as stand-alone devices and eventually as blades for the company's directors.

"Nishan wasn't getting much traction because they were perceived as a start-up," says Staimer, "but with the McData label revenues will go up. It gives McData the ability to connect SAN [storage area network] islands, which is a competitive advantage."

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With the Sanera acquisition (valued at approximately $102 million in cash), McData gains the high-end DS10000 core director, which features 256 2Gbps ports (or up to 64 10Gbps ports) per chassis, advanced ASICs, fabric-based intelligence, multi-protocol support (Fibre Channel, iSCSI/Ethernet, FICON), 10Gbps speeds, and "dynamic partitioning," which allows companies to consolidate SANs into a single director while maintaining security and administrative autonomy—a feature similar to Cisco's Virtual SAN, or VSAN, technology. (For more information, see "Sanera director aimed at high-end SANs," InfoStor, May 2003, p. 14.)

McData plans to add firmware, diagnostics, high-availability features, and additional support for FICON to the Sanera directors. OEM shipments are due by year-end, with general availability expected in the second quarter of next year, according to Mike Gustafson, McData's senior vice president of worldwide marketing. At that time, the Sanera directors are expected to be interoperable with McData's Sphereon and Intrepid platforms.

"The Sanera acquisition gives McData an architectural advantage over Cisco in the director space because [the DS10000 is] a higher-end product with more functionality," says Staimer, "and Brocade's not a strong player in the director market." (Brocade has the lion's share of the fabric switch market, and Cisco began to make inroads into both the switch and director markets this year.)

Fabric-based intelligence

Following the potential trend toward fabric-based intelligence (storage applications running on switches/directors), McData has also entered into a technology agreement with start-up Aarohi Communications. Aarohi's FabricStream "system-on-a-chip" ASICs were specifically designed for hosting fabric applications such as volume management, snapshots, data migration, and replication. McData plans to incorporate FabricStream technology into all of its platforms, including the Sanera directors, as intelligent blades.

McData's Gustafson predicts that integration of the Aarohi technology into the Sphereon switches will be completed in the second half of 2004. Blade-based implementations for McData's directors will follow in late 2004 or early 2005.

In addition to the technology exchange agreement, McData invested $6 million in Aarohi, representing an approximate 15% ownership of the start-up. The agreement was mutually non-exclusive. No deals with third-party software developers were announced.

In July, McData demonstrated an intelligent switch—the Sphereon 4500—based on Aarohi technology, and applications from Incipient—a start-up software developer focused on fabric-based applications.

Competitors Brocade and Cisco have already announced plans for fabric-based intelligence (see "Users look forward to fabric-based intelligence," InfoStor, September 2003, p. 8; "Vendors move toward fabric-based intelligence;" June 2003, p. 1; "Fabric-based intelligence gets vendor nod," April 2003, p. 8; "MaXXan enters storage switch market," March 2003, p. 10; and "Brocade to acquire Rhapsody," December 2002, p. 8).

McData also announced that it will extend its SAN management software (SANavigator and Enterprise Fabric Connectivity Manager, or EFCM) to encompass its entire product line.

Will the Sanera and Nishan acquisitions give McData a long-term advantage over rivals Brocade and Cisco? "It's too early to tell," says Arun Taneja, consulting analyst and founder of The Taneja Group consulting firm, in Hopkinton, MA. "Between Brocade and McData, the vendor that does the best job of integration will have the edge." Brocade isn't expected to ship an integrated version of the fabric application switch it acquired from Rhapsody until at least year-end, even though the acquisition was completed early this year. And sources report that delivery of the switch might slip into the first or second quarters of next year.

Dragon Slayer Consulting's Staimer agrees that it's too early to predict a winner in the Brocade-Cisco-McData competition. "It's sort of like the football pre-season: They're signing up free agents, and at least on paper, McData has really strengthened its line."

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