Cisco's SAN biz bores McData CEO

Ho-hum

By Ashlee Vance in Chicago • Get more from this author

Posted in Storage, 4th March 2004 16:02 GMT

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Despite its best efforts to crack the storage switch market, Cisco Systems' performance doesn't have one of its main rivals terribly concerned in the near term.

"I don’t want to minimize their growth in the last quarter, but it was a ho-hummer for a company the size of Cisco,” said John Kelley, the CEO of McData, in an interview with Byte and Switch.

Cisco and ho-hummer don't usually go together in the same sentence, but in this case Kelley has a point. Out of the $5.4bn in sales reported by Cisco in the second quarter only $40m came from SAN (storage area network) switches. And that is with a 70 percent rise in orders from the first quarter. Cisco can now claim 540 customers in this market dominated by McData and Brocade.

At the time of its second quarter announcement, earlier this month, Cisco tried to put a good spin on the small revenue total.

"After a slow start, our storage networking business picked up dramatically in Q2, with revenue of approximately $40m, a 120 per cent increase over Q1," Cisco said, adding component shortages and "some channel issues" hurt the previous quarter's numbers.

Cisco's SAN switch revenue falls well short of Brocade's $145 million and McData's $114 million. But while Cisco's results don't do all that much for Kelley, the McData CEO does admit Cisco has him scared. The biggest concern being that three is a crowd in the SAN market.

“It’s going to be a tough, slug-it-out environment,” Kelly told Byte and Switch. “As aggressive as all three of us are, there’s probably not enough to execute what we all want to do."

Given Cisco's size and past success it's hard to imagine the SAN newcomer being the odd man out should the market squeeze. ®