Also, Cisco has only shipped about 5,000 FCoE ports in Q1, according to Dell’Oro, hardly enough volume to eat away tens of millions of dollars in FibreChannel business. So Cisco may not be intentionally eating its MDS young – but Nexus does represent the company’s future direction in data centers.

“The MDS was generating about $100 million a quarter, but peaked in Q4 ’07 and demand has somewhat softened since then,” says Tam Dell’Oro, founder, president and senior analyst for SAN research at Dell’Oro Group. “I don’t think cannibalizing the MDS is a deliberate move. Maybe the attention and investment has shifted to the Nexus. If you had to prioritize…you’d allocate the most to the product that had the highest income capability.”

And FCoE is “not cheap,” Dell’Oro says – adding the capability to the Nexus 5000 switch can add over $1,000 to the per port list price of the device (which lists for $900 per 10Gbps Ethernet port).

That’s not to say MDS is dying off anytime soon. Cisco says FibreChannel will be around for years to come – and Cisco plans to develop 16Gbps capabilities for the product line.

“Customers on storage side tend to be conservative, and continue to invest in FibreChannel,” says Jackie Ross, vice president of marketing for Cisco’s Server Access and Virtualization Group.