Its going to be a tough, slug-it-out environment, he says, As aggressive as all three of us are, theres probably not enough to execute what we all want to do.
The three-way battle has already taken its toll on Brocade and McData. Despite their recent earnings reports, each has had significant layoffs in the past year and seen pricing pressures cut into its profits (see Alltel Q1 Revs, Profits Rise, McData McDownsized, and EMC Playing Hardball With McData?).
Analysts have speculated that Ciscos sales came at McDatas expense because both target the enterprise, while Brocade dominates the midrange and is aggressively pursuing the entry-level market (see Brocade & McData's Paths Diverge).
Despite playing down Cisco's sales growth, Kelley appears obsessed with its market presence. He maintains that Cisco is McDatas main rival. Even though Brocade is the overall market share leader, Kelley sees Cisco wherever he turns.
A company the size and scope of Cisco, you have to wake up each day and know theyre there, Kelley says. Everybodys worried about Cisco: networking companies, security companies, wireless companies. Im on the board of Polycom, a communications company. They say, Our problems Cisco. I say, Wait, Cisco is my problem. Theyre a problem for a lot of people."