McData Stirs Up Software

McData Corp. (Nasdaq: MCDTA) is hoping to pump up its software unit, geared around its SANavigator management software, and potentially expand into new markets. But it's still many miles away from becoming a storage software powerhouse.

McData entered the market through the September 2001 acquisition of SANavigator Inc., the storage network management software subsidiary of Western Digital Corp. (NYSE: WDC) (see McData Snaps up SANavigator).

Now the company has made the software group a formal, standalone business unit with its own P&L (profit and loss) accountability. Earlier this month, it hired Gary Gysin to be VP and general manager of the unit. He was previously senior VP of products at Volera Inc., the Novell Inc. (Nasdaq: NOVL) caching software spinoff, and prior to that was president and CEO at PGSoft Inc., a systems software company that Novell acquired in 2000 (see McData Appoints Software GM).

Gysin says McData is currently evaluating expanding into new markets, including, potentially, storage resource management (SRM).

"The goals are very aggressive for the software business in terms of where we want to be," he says. "We're doing that hard analysis in the SRM market and other areas. At a minimum, we'll defend and lead the device management and SAN management space." Gysin, who is based out of McData's office in San Jose, Calif., would not say how many employees are in his group.But McData still has a very long way to go before it matches the storage software clout of market leaders like EMC Corp. (NYSE: EMC) or Veritas Software Corp. (Nasdaq: VRTS).

McData doesn't break out software revenues -- it reports those sales together with services -- but any way you slice it, SANavigator is relatively puny. For the fourth quarter of 2002, McData had $9.3 million for sales and services combined. EMC's software revenues, by comparison, were $347 million for the same period (see McData, Emulex Rake It In and EMC's Q4 Stars Clariion).

And McData's SANavigator unit faces a growing number of competitors, including Computer Associates International Inc. (CA) (NYSE: CA), which just released its first product in this category, BrightStor SAN Manager. Other vendors angling for a piece of this pie include Brocade Communications Systems Inc. (Nasdaq: BRCD), Fujitsu Software Technology Corp. (Softek), AppIQ Corp., CreekPath Systems Inc., and InterSAN Inc. (see CA Spans Into SANs).

Another challenge is that as a hardware-focused company, McData may have a tougher time selling SANavigator beyond its base of Fibre Channel switch customers. For example, Brown & Williamson Tobacco Corp. considered purchasing Veritas's SANPoint Control software but selected SANavigator primarily because it had already decided to deploy McData's switches. "It's the only software we've used for SAN management, so we don't have a lot of comparison to other tools," says Mark Swaim, technical services manager at the tobacco company (see Tobacco Firm Puts in Smokin' SAN).

Indeed, one of the major new features in SANavigator 3.5 -- which the company launched today -- works only with McData's own switches. The software is now able to take advantage of the template registers in McData's switches, which are essentially counters that sit on each port, allowing SANavigator to act as a software-based protocol analyzer. (The template registers are also at the center of the patent-infringement lawsuit McData filed against Brocade, which is still pending -- see McData Seeks Arbitration , Brocade 1, McData 0, and McData v. Brocade: The Highlights).The company's strategy is to provide other McData switch-specific features through the software, says Steve Hindman, senior product manager for SANavigator: "What we want to do is build more capabilities in the hardware level -- in the ASICs and firmware -- and provide more intelligence in SANavigator so we can do things like chargeback, routing, and quality of service."

Meanwhile, other new features in SANavigator 3.5 provide only incremental enhancements over previous versions (see McData Ships SANavigator 3.5).

The new version provides the ability to discover and monitor Fibre Channel-to-IP gateways, although for now it can't actively manage them. The software supports Cisco Systems Inc.'s (Nasdaq: CSCO) SN 5428 iSCSI router, CNT's (Nasdaq: CMNT) FC-to-IP routers, and Nishan Systems Inc.'s 4000 series of routers. "Although there aren't a lot of people using these today, we wanted to get the plumbing into the software," Hindman says.

SANavigator 3.5 now allows role-based access, so that multiple administrators can be given separate access rights. Also new is the software's support for LUN (logical unit number) masking, which allows administrators to block or unblock access to a LUN, but currently only for EMC's Clariion and IBM Corp.'s (NYSE: IBM) Enterprise Storage Server (a.k.a. Shark) systems. McData is now providing agents to communicate with other management applications, including CA Unicenter, Hewlett-Packard Co. (NYSE: HPQ) OpenView, BMC Software Inc. (NYSE: BMC) Patrol, and IBM Tivoli