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Users cautious about Brocade-McData merger

Beth Pariseau
Users of products from Brocade Communications Systems Inc. and McData Corp. said that they worry about the amount of overlap between the two companies' product lines now that Brocade has acquired McData for $713 million.

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The users also said they worry about interoperability issues with McData's directors.

Andrew Madsen, senior storage administrator for the Harley Davidson Motor Co., said his shop has been using Brocade but is in the process of replacing it with Cisco Systems Inc. switches "because we're a Cisco shop in other aspects of our company," such as telephones. Madsen also said he hoped the fusing of its two main competitors into one would "keep Cisco on their toes."

But as far as he's concerned, Madsen said, McData "never really entered into the equation" because of interoperability problems. "Hopefully [with this acquisition] it'll be easier to integrate systems. McData has been causing everyone a lot of grief with their interoperability mode -- they've been stuck at 32 domain IDs (switches) that can be attached to their director in interoperability mode. Hopefully that'll disappear if Brocade completely folds products together."

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Hal Weiss, IS systems engineer for Baptist Memorial Healthcare, said he also uses Brocade almost exclusively and went away from McData years ago when it began to make a move away from EMC Corp. But still, he has avoided McData at almost all costs -- where it's not Brocade in his shop with his Hewlett-Packard Co. (HP) storage, it's Cisco.

"McData will tell you they don't have interoperability issues, but they do," Weiss said. Technically, he admitted, McData's i10,000k director is a better product than Brocade's directors, and McData has better high-end products in general. But nonetheless, Weiss said, he doesn't want to have to rip out and replace any of the switches in his environment.

However, Weiss said, he will need to buy more switches in the next year. At that point, he would be happy to buy a McData product offered by Brocade -- provided interoperability issues, which he said could also be not just a limitation on ports but incompatibilities between McData's management protocols and those of the other switch vendors -- had been addressed. "And frankly, they would have to prove it to me."

If those problems can't be addressed, Weiss said, "then I would be looking at Cisco. It would be a real infrastructure change, but it would be one of those things that would make you re-evaluate your investment."

Tom Becchetti, who asked that his company, a financial services firm, not be named, said he uses both Brocade and McData and was more sanguine about the possibility of introducing McData high-end products into Brocade's offerings.

"I still think that McData has the better high-end products and better directors," Becchetti said. Becchetti, who uses 6140 directors from McData, laughed when asked if he has any interoperability problems. "I don't interconnect them -- they are separate fabrics. I try to keep my environment as simple as possible."

As for integration between the two companies, Becchetti said, "depending on how they integrate, they could make it really great or really ruin it. It's a teeter-totter they're on."

Will FICON survive?

In particular, Becchetti said he worries about the FICON-enabled switches from McData that he uses to connect his mainframes to a Fibre network. "It's a comfort to us that McData has been doing FICON for 15 years -- if they got rid of that product line, that would probably be enough to sway us toward Cisco," he said. "But Brocade, we're hoping, is almost certainly smarter than that."

Another McData user, the director of IT for large retail company based in the Southwest, who asked not to be identified, said he isn't so sure Brocade will do the right thing. In fact, he sees a dire prior example in McData's purchase of CNT, which made a superior director called UltraNet Multiservice Director (UMD). "I don't know that there's anything left of it," he said. "What they kept is the services side."

The user said Brocade does have a gap in the high-end director space that McData could fill, but other than that, this "McData user since forever" worries that McData's products could be going away completely. "McData and Brocade both have a full range of offerings," he said. "I can't really see what advantage this merger will give either company, to be honest."

Most of the users said they could at least see the rationale for the deal in terms of its industry-focused side, especially the need to compete with Cisco. Weiss also said he thought it could sweeten deals with original equipment manufacturers (OEM), if Brocade drops prices to compete with Cisco, but that he's not sure that benefit would extend to customers.

"McData has been courting us for some time," said Rich DeBrino, chief information officer of both Compass Health and wholly owned IT consulting company, Advances in Technology (AIT), both of which use Brocade switches as part of a largely HP infrastructure. "It's a decent product, but we felt Brocade was a more stable company with a better installed base. Putting them together, though, will help create a better competitor for the 800 pound gorilla that is Cisco."

In this market, DeBrino said, it might actually be better to have fewer products and competitors. "If you think about it, this kind of switching is still a niche market and a small market. It hasn't been commoditized. Having less people focusing on products is good for the end user because it hopefully will make everybody try harder," he said.

Brad O'Neill, senior analyst at the Taneja Group, said that the "lynchpin" for integration between the two product lines is some software Brocade has been using in the field for nine months called "McData interop," which enables Brocade and McData fabrics to work together. "This provides interoperability for McData users going forward," he said and helps overcome a major barrier in many customers' minds. In 18 months time, O'Neill estimates nothing will have the McData badge on it. "They'll keep some key intellectual property and funnel it into Brocade's products."

John Webster, founder and analyst with the Data Mobility Group expects Brocade to keep all the CNT channel extension products and "anything to do with the mainframe business," which Brocade has not been historically strong in. He said it'll be interesting to see which way it will go on the WAFS product as Brocade has a partnership with Tacit Software Inc. (now owned by Packeteer Inc.), while McData has an OEM deal with Riverbed Technology Inc. "It's going to take some time to reconcile all the overlap."

As for the director-class switches, Webster said, "there will be decisions to make -- in particular [McData's] i10,000. I would have a real question as to that product's future."

In the short term, Webster said, "if Brocade plays this intelligently, they won't be discontinuing any products -- they'll preserve both going forward, preserving the status quo while focusing on interoperability issues and pleasing their customers on both sides."

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