McData buys Nishan, Sanera for $185M

McData said Monday that it is acquiring Nishan Systems and Sanera Systems for US$83 million and $102 million, respectively, so it can move from offering just Fibre Channel directors to offering storage over IP and expand its port count from a maximum of 140 now to 246.

Mike Gustafson, senior vice president of worldwide marketing at Broomfield, Colo.-based McData, said there will be "opportunities" for campus consolidation, but he added that there are no immediate plans to cut staff or locations. San Jose-based Nishan has 101 employees; Sunnyvale, Calif.-based Sanera has 91.

Gustafson said McData also paid $6 million for 15 percent of Aarohi Communications Inc. in San Jose, so it can use the company's software and processors to enable data replication from its directors.

Sanera in April previewed its 256-port DS10000 Datacenter-Class Director at Storage Networking World in Phoenix. Besides the additional port counts, a key piece of technology offered by Sanera is dynamic partitioning, or the ability to carve up a switch into sectors with separate service levels for different applications, Gustafson said.

As for Nishan, it makes multiprotocol switches that transport block-level data over Ethernet using the Internet SCSI and Internet Fibre Channel Protocol standards. Nishan's switches encapsulate Fibre Channel and SCSI data packets with IP headers for transport over Ethernet, allowing companies to either connect remote storage-area networks (SAN) through tunneling or many small servers to SANs for backup.

The Fibre Channel over IP protocol is in McData's product plans, and McData expects to begin offering the additional features to customers sometime in the second quarter of 2004.

Gustafson said McData will bring the added technologies under one management platform that will include every product in its line, offering current customers seamless integration of their storage networks with complete compatibility with current and future products.

"We are excited about this new offering because it will afford companies like us a tremendous amount of scalability and manageability for large, enterprise storage networks," Kevin Shine, director of storage services at Verizon Corp., said in a statement.

Tom Buiocchi, director of product marketing at McData rival Brocade Communication Systems Inc., said McData is simply playing catch-up with its competitors, including Cisco Systems Inc. (San Jose-based Brocade obtained its storage-over-IP capabilities when it purchased Rhapsody Networks Inc. in January.)

"This is a well-known progression in technology and a well-known road map that the other two of us (Brocade and Cisco) have been offering for some time now," Buiocchi said.

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