Users voice fear, hope over switch-maker buyout

09.08.2006
Customers of Brocade Communications Systems Inc. and McData Corp. said the buyout of McData announced this week has them concerned that it may mean the end of life for some switches they currently use and that a bigger Brocade may change its sales model.

But a top Brocade executive said the two companies will support the status quo for now and will eventually tightly integrate the product lines.

San Jose-based Brocade announced this week that it was buying Broomfield, Colo.-based competitor McData in an all-stock transaction valued at US$713 million.

On hearing the news, Wilson Chan, manager of technical services at the Durham District school board in Ontario, Canada -- which announced late last month that it had consolidated its storage onto McData directors -- sees both advantages and disadvantages to the acquisition. He said the buyout will probably spur "bigger, better services" and better research and development and products. On the other hand, Chan said he's concerned that the company will drop some of McData's products.

Mike Campbell, director of PC systems and support for at University of New Mexico Hospitals in Albuquerque, chose McData equipment in March over Brocade's switches. Campbell said he was surprised by the announcement. "We bought McData because we thought the company had good technology, so we're going to be concerned about what Brocade might do there," he said.

Rich Ward, director of technical services at the Philadelphia Stock Exchange, said he is not particularly concerned by the acquisition. However, he said that as a Brocade user, he has the upper hand in the deal. Ward said his primary concern is that as Brocade grows, it may change the way it works with its partners, such as going with more of a direct marketing model, which could affect Ward's business down the road.