The Issue:

The “data center network” is a myth. For nearly as long as there have been data centers (DC), there have been several DC networks that interact with and overlap one another, most importantly the data, storage and high performance compute (HPC) networks. The desire to consolidate these networks onto a single fabric is as old as the networks themselves. As network vendors continue to reengineer and ramp up production of 10G Ethernet equipment, the promise of unifying data, HPC and storage networks onto a common technology—Ethernet—increases. Network vendors have some significant technical and engineering hurdles to clear before they can simultaneously meet the opposing pulls of storage, which demands lossless reliability, and high performance applications, which demand very high throughput at very low latency.

Consolidation onto a single fabric—a DC over Ethernet—will reduce physical complexity, lower material costs and simplify operations. Ultimately, though, the most important benefit of a unified DC fabric will be increased enterprise IT agility deriving from the ability to rapidly and dynamically reprovision network resources across data, storage and HPC domains.

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Clients: Data Center IO Consolidation 

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By John E. Burke, Principal Research Analyst, Nemertes Research Inc.

Aug. 18, 2006

Brocade (NASDAQ: BRCD, http://www.brocade.com) is acquiring McData (NASDAQ: MCDTA, http://www.mcdata.com) via stock swap, highlighting ongoing consolidation in all storage-related markets and reflecting the continuing growth of centralized, networked storage in data centers as file servers get stripped out of branches, data centers are consolidated, data streams swell, and retention horizons increase.

Brocade and McData benefited from these trends, competing fiercely in the storage networking market for years. However, both have been threatened as Cisco's (NASDAQ:CSCO, http://www.cisco.com) share of that market continues growing at their expense. By acquiring McData, Brocade will immediately leap to roughly three-and-a-half times Cisco's market share, changing the tightening one-two-three SAN race into a first and distant second (Cisco) race- for now.

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