Users Mull Merger

Brocade customers have welcomed the vendor's decision to acquire switch rival McData for $713 million and are now awaiting news of Brocade's long-term plans. (See Brocade Bags McData For $713M and Brocade Buys McData.)

"McData is a good switch manufacturer," says Andy Tran, CTO of Hollywood-based Pacific Title, which does special effects and creates trailers, credits, and subtitles for movies. "[But] it's very surprising that Brocade would do this, because McData has been undercutting [their] pricing."

Tran, who uses an array of Brocade kit, thinks that Brocade is now likely to replace its own low-end offerings in response to this pricing pressure. "I am imagining that they will kill the low-end products from Brocade and absorb the McData product," he says. "I don't mind paying for the high-end [Brocade] switches at a high price because no one else has them, but at the low end there are other people selling switches cheaper, such as McData."

In documents filed with the Securities and Exchange Commission (SEC) today, Brocade promises that users will get more detail on product roadmaps when the transaction closes, which is expected to be by the end of this year. Until that time, Brocade and McData will continue to operate independently, and, somewhat confusingly, compete in the same markets.

Brocade, however, is also offering migration services for McData customers who want to move over to its platform, which suggests that Brocade's technology will dominate future product releases.But up in Canada, Nolan Evans, CTO of another Brocade customer, consulting and managed services firm FlexITy, told Byte and Switch that McData's software may be a key factor in any future product roadmap. "McData has always been known for their strong management software, so that's a strong piece of their portfolio that I think Brocade will take advantage of."

The Richmond Hill, Ontario-based firm uses four Brocade SilkWorm switches in its SAN, and Evans feels that Brocade, like other vendors, is now looking to branch out from its core technology. "They are definitely trying to get out of the pure hardware space," he says. "Look at IBM or EMC, they are trying to get out of the role of a pure hardware manufacturer."

In the SEC documents, Brocade claims that the deal will drive interoperability between the two vendors' products and provide "unified management" of switch technologies.

At least one thing is certain: Users will have less vendors to choose from in the future. Today's deal leaves Brocade and Cisco as the only major Fibre Channel switch vendors, although QLogic has proven to be gaining momentum. (See Cisco Gets Set.)

Over in Hollywood, Tran thinks the merger won't kick Cisco out of storage. "I think that with the combination of Brocade and McData, Brocade could become dominant, but I don't think that they could squeeze Cisco out of the market," he says, adding that Cisco recently came out with a "really strong" Fibre Channel switch of its own. (See Cisco Goes 4-Gig & Big, UM Picks Cisco SAN, Michigan Healthcare Picks Cisco, and Cisco Storage Rebounds.)Other users are split on who will eventually win out in the switch market. In a recent Byte and Switch poll of IT managers to predict the industry's dominant switch vendor three years from now, Brocade and Cisco each received 38 percent of the votes. Tellingly, over 40 percent of respondents also predicted that consolidation amongst the major vendors was imminent. (See Which Switch Will Reign?)

James Rogers, Senior Editor, Byte and Switch