Storage switch vendor McData has acquired CNT - Computer Network Technology - in a $235 million deal.
CNT is a leader in WAN extension and long-distance data replication technology and McData is a leader in high-end director-level Fibre Channel switches. CNT also sells high-end directors and there is significant product overlap.
"With CNT's and McData's combined market share in the director segment, McData will have a sizeable market share lead over Brocade and Cisco," said Stephanie Balouras, senior analyst for the Yankee Group. "Another important aspect is that CNT has a significant professional services business which I think will be a benefit to the combined company going forward."
The companies have a variety of customers such as Dell, EMC, HP, Hitachi Data Systems, IBM, StorageTek and Sun. CNT has a strong European presence of value to McData. By acquiring CNT McData gets rid of a competitor selling to its OEMs like IBM.
What isn’t known about the acquisition is how the companies will integrate their products. There is a large overlap between CNT’s director-level switches and those of McData. CNT, for instance, recently introduced the UltraNet Multi-Service Director (UMD), a 256-port multi-protocol Fuses technology from Sanera Systems, which it acquired in August 2003. McData just announced its 256-port i10K product.
McData has been aggressive in acquisitions in the Fibre Channel market. In August 2003, the company also acquired Nishan systems, a maker of iSCSI and Internet Fibre Channel Protocol (iFCP) switches and routers. In 2001, McData acquired SanNavigator management software from Western Digital. It also bought Arohi in 2003 for its intelligent switch technology.
McData has been losing director-level switch market share to Cisco and Brocade in the last year. The acquisition of CNT is expected to bolster its share. According to the Yankee Group, McData led the market in director-level switches with nearly 47 percent in the second quarter of this year; Cisco has shown rapid growth in this market - the company leads Brocade 24 percent to 23 percent. CNT had a paltry 7.4 percent market share.
McData has just announced a multi-tier SAN architecture with Sphereon edge switches, Intrepid 6000 series mid-tier directors and i10K core or backbone directors. It views storage networking as having to evolve to a multi-tier design just as Ethernet networking has.
A set of service modules providing storage applications such as virtualisation is said by McData to be becoming available for Intrepid 6000 and i10K directors.
There is no word on how these would fit in the CNT UMD device. The blunt expectation is that they won't - the architecture is wrong. Nor does CNT's director have the FlexPar (flexible partition) feature for dividing SANs into separate domains.
It is possible that there will be a migration program announced to move UMD customers to the i10K. It is unlikely that McData needs two different 256-port director designs. An integration office has been established with the task of planning for a combined product and services roadmap to support McData’s multi-tier SAN concept and meet customer and partner needs.
The transaction is expected to be completed in the second quarter of this year
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