Brocade drafts new road map after McData deal

Storage equipment vendor Brocade Communications completed its $973 million acquisition of McData and announced a new product road map Monday.

Storage network equipment company Brocade Communications Systems has revised its catalog to add products and services from its just completed acquisition of McData.

Last week, Brocade completed its all-stock deal for McData, valued at US$973 million, and on Monday, Brocade executives rang the opening bell on the Nasdaq stock exchange, on which the company's shares trade under the symbol BRCD.

Brocade, a provider of switches and management software for storage networks, has merged the product lines of both companies. But it will support each company's legacy products and ensure their interoperability, even if it plans to discontinue some of them, said Tom Buiocchi, vice president of marketing for Brocade.

For example, Brocade offers one and McData two storage area network management software products. It will continue offering all three but will rename the McData products with the Brocade brand.

"In order not to disrupt any customers and to provide continuity, we will maintain all three of those until we provide the market a converged single platform ... anticipated in 2008," Buiocchi said.

The McData acquisition also brings into Brocade long distance connectivity products, access to the mainframe market and broader services offerings than did Brocade alone, he said.

Brocade expects to save US$100 million by the first quarter of 2008 through streamlining product and services offerings and an unspecified number of work force reductions. Each company had about 1,400 employees when the merger was announced in August 2006. The combined company has about 2,400 employees.

Brocade also announced Monday a US$200 million stock buyback program. It is already in the midst of a US$100 million buyback begun last year and says it will begin the new buyback process after reporting its fiscal first quarter 2007 financial results on Feb. 26.

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