McData is to buy Nishan Systems and Sanera Systems for $83 million (not including $2 million debt) and $102 million respectively.
The announcement came at the same time as the company's second quarter results and third-quarter predictions. President and CEO John Kelley said the purchases would "allow us to provide customers with unprecedented value, choices and solutions" and that the company was "changing the future of storage networking".
However, the buys are widely seen as McData trying to keep up with Cisco and Brocade by covering more of the market and the company's shares fell 18 per cent after its lowered third-quarter estimates following poor forecasts by its two biggest customers, IBM and EMC.
The purchases of Nishan and Sanera are nevertheless a good idea. The storage market is very tight at the moment. This has meant McData has snapped them up for a good price and also allowed itself to offer more products, giving it a wider foundation.
An IDC analyst was quoted in McData's press release saying much the same only in daft language: "In an era of storage and server consolidation, enterprises are rethinking their storage infrastructures," said Richard Villars. "They want more robust storage capabilities that they can consistently leverage across their enterprise."
McData is essentially buying improved IP switching from Nishan and multi-platform support from Sanera, improving its ability to integrate storage systems and bringing it in line with the services its main competitors offer.
It lists the advantages itself as: scalability, internetworking (multi-protocol routing so better disaster recovery) and intelligence (data applications can be migrated to the network). The company also announced it had signed up with Aarohi Communications to use its system-on-a-chip technology on its switch platforms.
Tough times are still ahead though. Cisco and Brocade can do all McData does and they aren't exactly popping the champagne at the moment.
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