Kelley expects Rath to accelerate McDatas growth by improving relationships with resellers and OEMs in the region. Rath, an Australian citizen based in Singapore, had been managing EMC Corp.s (NYSE: EMC) Dell Computer Corp. (Nasdaq: DELL)
partnership in Asia.
With Raths appointment, McData now boasts high-level executives in charge of the U.S., EMEA, and Asia/Pacific regions. That in turn reflects a growing emphasis on strengthening the company's international presence. Kelley says his work as interim sales chief mostly involves working with those geographic managers. Im really getting closer to those managers, to make sure the business is growing in those areas."
McData could use some growth. It lost $50 million in the most recent quarter, and the stock price plummeted because of lukewarm guidance for next quarter (see McData Maudlin Over Price Pressure). The vendor is locked in a struggle with Brocade Communications Systems Inc. (Nasdaq: BRCD)
and Cisco Systems Inc. (Nasdaq: CSCO) in the SAN switching market, and that puts pricing pressure on all three companies.
Although Brocade has the highest market share of the three, Kelley says he considers Cisco his biggest threat. "We really only have one viable competitor on the networking side, but its a big one, Kelley says. He sees winning in the SAN market alone as a limited objective. You hear Greg [Reyes, Brocades CEO] talk about price declines and becoming a low-cost switch company. Id rather be known as somebody that goes out and improves companies and adds value to companies than to try to be the absolute low-cost switch provider.
Despite the financial guidance, Kelley is optimistic about 2004. He says hes excited by the prospect of growing IT budgets and a trend toward greater resource connectivity. He's also hopeful that the Eclipse IP storage switches that McData acquired by buying Nishan (see McData Speeds Out IP Switch) will help companies seeking to unify storage networking with mainstream IP.
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