Fibre Channel switch maker McData acquires CNT

Storage switch vendor McData Tuesday acquired Computer Network Technology in a $235 million deal.

CNT is a leader in WAN extension and long-distance data replication technology and McData is a leader in high-end director-level Fibre Channel switches.

With CNTs and McData's combined market share in the director segment, McData will have a sizeable market share lead over Brocade and Cisco,” says Stephanie Balouras, senior analyst for the Yankee Group. “Another important aspect is that CNT has a significant professional services business which I think will be a benefit to the combined company going forward.”

The companies share a variety of customers such as Dell, EMC, HP, Hitachi Data Systems, IBM, StorageTek and Sun Microsystems.

What isn’t known about the acquisition is how the companies will integrate their products. There is a fair degree of overlap between CNT’s director-level switches and those of McData. CNT, for instance, recently introduced the UltraNet Multi-Service Director, a 256-port multi-protocol Fibre Channel switch. McData is expected to announce today the 256-port Intrepid 10000 Director, which it acquired from Sanera Systems in August 2003.

McData has been aggressive in acquisitions in the Fibre Channel market. In August 2003, the company also acquired Nishan Systems, a maker of iSCSI and Internet Fibre Channel Protocol (iFCP) switches and routers. In 2001, McData acquired SanNavigator management software from Western Digital.

McData has been losing director-level switch market share to Cisco and Brocade in the last year. The acquisition of CNT is expected to bolster their share. According to the Yankee Group, McData led the market in director-level switches with nearly 47% in the second quarter of this year; Cisco has shown rapid growth in this market - the company leads Brocade 24% to 23%. CNT had a paltry 7.4% market share.
The transaction is expected to be completed in the second quarter of this year.