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HP May Dump McData, Sources Say

Industry sources say the tepid relationship between Hewlett-Packard and McData is about to go ice cold, although McData claims it will heat up with a new deal between the storage vendor and the switch maker.

At least two financial analysts say HP will quit selling McData switches, mainly because HP gets better results selling gear from McData rivals Brocade and Cisco.

Brocade has traditionally had a strong relationship with HP, while HP has never been a strong McData customer. Cisco has put pressure on McData's market share in the director space since getting into the SAN switch space in 2003.

"Having never really established a significant revenue presence, sources indicate HP is discontinuing the sale of its McData sourced switching products," RBC Capital Markets analyst Tom Curlin wrote to clients last week. "Across our checks, sources have pointed to stronger presence from both Brocade and Cisco at the expense of McData. Brocade in particular appears to have reengaged the channel in an effort to build out its branded business and emerging market offerings."

Another Wall Street analyst also says HP has decided to pull the plug on McData. "My checks are indicating that for all practical purposes, McData is out of HP," says the analyst, who asked not to be named. "HP doesn't sell a lot of directors anyway -- most of what HP sells is switches. And HP sold very few McData directors."

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