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McDATA gobbles up CNT

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McDATA is back on the acquisition trail, with a $235m all-stock deal to buy the number four SAN director supplier CNT. The merged company will dominate the high end Fibre Channel storage networking business; the question is whether it can reverse the steady climb of its rivals Brocade and Cisco.

It's just under two years since CNT bought its way into the director (or chassis switch) business, spending around $190m to acquire InRange Technologies. Since then, CNT has failed to make much headway, taking just 7.4 percent of the director market, while McDATA has been losing share to Cisco and Brocade.

The deal was announced the same day that McDATA finally released the 256-port Intrepid i10000 core director that it's been talking up for over a year now. Based on technology it acquired with Sanera, the i10k competes head on with the only other 256-port director on the market, namely the well regarded UMD from - yes, you guessed it - CNT.

Part of the i10k announcement involved differentiating the two. For example, i10k has iSCSI capability and 10Gig Fibre Channel, both of which the UMD currently lacks, plus the ability to create physically separate network partitions with dynamic resource reallocation.

The i10k also has more buffer credits, meaning it can use far longer dark fibres - over 190km for 10Gig and 2000km for 1Gig. However, UMD is already on the market, whereas the i10k won't ship until some time over the next three months.

When the McDATA-CNT deal was rumoured last week, one disbelieving analyst commented that a merger of two shrinking companies wouldn't mean that they'd stop shrinking. Other sceptics now highlight the amount of product overlap between the two - the acquisition will give McDATA three different director families.

It also produces overlaps in long distance data replication and WAN extension. CNT has valuable expertise here, but so does McDATA, having bought Nishan in 2003 (at the same time as Sanera) for the Fibre Channel over IP technology that it now sells as its Eclipse family.

McDATA's EMEA marketing director, Dave Slater, claims that although their products might compete, the important thing is that the two companies have few shared customers. "There's an obvious overlap between the 10k and the UMD, but it wasn't a show-stopper," he says. "Most of the combined market is additive."

Integrating the two companies is clearly going to be hard work and painful, but with Sanera and Nishan already absorbed, McDATA boss John Kelley clearly figures he has the expertise to do it. The acquisition is due to complete around mid-year.®

Related stories

IBM signs up CNT's mega-director
McData: buying its way into SAN niches
Sanera ready to beta SAN switch

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