Brocade's acquisition of McData has come and gone in what feels like an abrupt change, despite months of elapsed time from start to finish.
Brocade spared no effort in presenting the best face of its acquisition to the world. Crowd-pleasing gestures such as ringing the opening bell at NASDAQ and presenting the new company logo go a long way in reassuring customers and observers that everything is fine and dandy.
I rather like the new Brocade logo, but there are a few aspects of the acquisition that still trouble me. And I'm not the only one with concerns, although some of what I've heard is a little off-target. For example, some fear that consolidating two-thirds (or 75 percent, depending on the source) of the storage networking market under a single company will give Brocade more leverage to drive up the price of its products and services.
To quote Vice President Cheney: "Hogwash!" Those concerns overlook the fact that Brocade doesn't sell commodities, and that its customers are large --and often larger -- companies. I don't see those customers being subdued by Brocade anytime soon. On the contrary, the customers may have more leverage than ever now that Brocade has to satisfy much more ambitious sales targets.
Moreover, the last time I checked there was still a company called Cisco out there, not to mention a cluster of smaller but quite belligerent vendors. I am sure that Brocade's management will make a point not to give those competitors any possible vantage point on the market.
What concerns me more about the acquisition is the initial product road map, which Brocade was good enough to publish along with the FTC clearance news.
Even a quick reading suggests that, with a few exceptions, most of the McData portfolio either will be dropped or otherwise incorporated into other solutions. As we all know, McData's product line had become an almost perfect replica of Brocade's, so there was a lot of overlap between the two. Therefore, dropping the McData products isn't really a surprise; after all, removing an annoying competitor and its products from the market was the main reason for the McData acquisition.
A complementary and no-less-important goal for Brocade, however, will be to win or maintain the favor of new and shared customers. This can be a challenge, and it may explain why Brocade attempted to make the transition from the old McData world to the new Brocade as smooth as possible for McData customers. For example, they're continuing support for discontinued McData products up to five years past the notice of discontinued sales.
Still, I can't help thinking that in shaping its new portfolio, Brocade's focus was more on furthering its strategy than truly keeping an open mind about competing technologies, which explains why most of the discontinued products did not have a Brocade logo.
It would be shortsighted not to anticipate the consequences of that surgical removal of McData solutions from the scene. Brocade is not commenting on layoffs, but some 150 people may have lost their jobs already, according to reporting by the Denver Po st . More will probably follow, but this is one time I hope to be proven wrong.
Join me on The Storage Network with questions or comments.