McData Boss Yawns at Cisco

McData Corp. (Nasdaq: MCDTA) CEO John Kelley says he doesnt see why industry insiders fuss so much over the latest SAN switch revenues from Cisco Systems Inc. (Nasdaq: CSCO). But he concedes that Cisco's got other vendors preoccupied, McData included.

“I don’t want to minimize their growth in the last quarter, but it was a ho-hummer for a company the size of Cisco,” Kelley said in an interview with Byte and Switch today.

Kelley admits Cisco has had a major impact on McData and rival Brocade Communications Systems Inc. (Nasdaq: BRCD) in the ultra-competitive SAN switch market. But that market's still growing, he says: Brocade reported $145 million and McData $114 million in revenue last quarter, both up sequentially and year-over-year (see Brocade Battles Back and McData Struggles to Keep Pace).

Cisco reported quarterly storage numbers for the first time when it claimed $40 million in revenue and approximately 540 customers last month (see Cisco Storage Growing Up). That was a big step up from the previous quarter, when CEO John Chambers said manufacturing and supply problems with its Andiamo switches prevented the company from meeting sales targets (see Cisco Still a Kid in Storage). Yet storage remains galaxies away from hitting the $1 billion target Chambers set for it last December (see Storage: A Cisco Billion Dollar Play).

Even if Cisco’s sales last quarter were “a ho-hummer” for its size, it's clearly starting to have success compared to past quarters. Cisco's report also confirms the greatest worry that McData and Brocade had when Cisco first got into the market -- that three giants are one too many in the industry. Even Kelley admits three’s a crowd.