No chance, IMO. Keep an eye on these product areas on the system vendor side to understand why I think McDATA's core to edge strategy is more valuable on its own --- auto-pathing, load-balancing, multi-path file system, distributed file system, auto-replication, etc. Auto-replication (internal and remote) is going to be a stealth killer app for 3 companies at most.
Grapevine time. It looks like Compaq's Marquee Mark is starting to hear the stilleto heels clicking softly around him. Chick power, dude.
Behind the Firewall, February 2002
Last month, we threw a few logs on the "IBM buying EMC" rumors fire. That was fun for a while, but now that we've worked through the numbers, let's do the math:
IBM has a market capitalization just shy of 200 billion beans. EMC's is around $35 billion. IBM does around $100 billion in revenues; EMC is on pace to do $5 to 6 billion. So, it would cost IBM at least $50 billion in market cap to buy EMC (probably more) -- 25 percent of the company, in other words -- in exchange for only $5 to 6 billion in incremental revenue, or roughly a 5 percent increase. People get shot for doing deals like that.
Word is HP and IBM will be joining up with EMC on the E-Infostructure Developers Partner thingamajig, leaving only HDS behind. This program is EMC's attempt to bring other vendors into the EMC Control Center software tent. Should just be a matter of time before some customer doesn't buy from HDS because of it, and it will have to join as well.
Seems not all is rosy in Brocadeville either. The 12000 isn't shipping from OEMs yet, and here's my theory why. The mid-tier Brocade switches were sold by EMC, IBM, and Compaq. EMC has had a long-standing (financial and otherwise) relationship with McData. IBM has an OEM arrangement with Inrange and is doing well with the product, and it also recently signed on with McData. Compaq signed on with McData for the high end, but let's face it, Compaq just doesn't market to that end of the market as a general rule. The fact that the OEMs still aren't shipping the 12000 tells me that either (a) they have already made their bed or (b) customers aren't begging for the product.
Microsoft is rumored to have booted Veritas out for its in-house use and switched to Legato for backup.
We hear Sun is looking at picking up SAN management startup InterSAN, which makes sense as that will fill one of the few remaining holes in a pretty compelling overall storage management strategy.
GiantLoop, the can't-miss bunch of former EMCers, seems to be missing -- big layoffs recently. Users apparently don't want to belly up for the up-front costs to get onto wide-area fiber during unsure economic times.
Overland Data, Legato, Sun, and EMC are actively looking for software acquisition targets.
The OEM buzz on TOEs (TCP offload engines) is that Platys (Adaptec) is the play.
Microsoft, whose Storage Appliance Kit (SAK) NAS operating system has been ridiculed for poor NFS performance, is spending a ton of time and money rectifying the problem, and appears ready to cause major damage in the overall NAS space. SAK-based systems are rapidly stealing NAS share. You can almost hear the Unix people groaning.
HDS and Sun have been awfully quiet for the last several months, leading people to believe that life may not be all that pretty. For a company spending a lot of time and money trying to convince the world it's a serious storage player, you might think you'd have heard about a win or two from Sun. A large Chicago end user tells me Sun doesn't have its act together on the 9900 yet, and it shows. The user is pretty frustrated, and EMC and IBM are saying "told you so."
Chuck Foley, former Inrange god, has landed at InfiniCon, a Pennsylvania-based InfiniBand play. The money worried that the engineering-rich company wouldn't be able to attract a top-level CEO, but that ain't a problem anymore.
Rumor has it that Mark Lewis, Compaq's VP of storage, is not happy that he hasn't been named the heir apparent of the post-merger storage business of HP/Compaq and is being pelted with offers. He was also apparently upset that Compaq never saw fit to elevate him to the senior VP level reached by his predecessor, Howard Elias. Industry insiders think he's the man for the job, having been through the massive Digital integration, potentially leaving HP chief Nora Denzel out of the picture. If Lewis leaves, Denzel wins by default, but has very big shoes to fill.
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