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McData's Qualification Quagmire

McData Corp. (Nasdaq: MCDTA) has a lot of reasons to want to see EMC Corp. (NYSE: EMC)
qualify its new i10K director, including the need to clear up confusion about the delay.

The lack of EMC qualification of the i10K raises two questions. First, is there something wrong with the director? People familiar with the situation say all technical problems have been minor. And that raises the second question: If there are no compelling reasons to withhold qualification, is there a problem between EMC and McData?

Hitachi Data Systems (HDS) and IBM Corp. (NYSE: IBM) qualified the director soon after it launched in January, but EMC has yet to officially give its blessing to McDatas new flagship product. McData CEO John Kelley says there are “small obstacles” left to overcome, but he expects EMC to qualify the director by next month.

McData executives say EMC is shipping the i10K, although it hasn’t yet qualified it or added it to its OEM list. Analyst Tom Curlin of RBC Capital Markets wrote in a note to clients this week that EMC stopped shipping the i10K at the end of July, although the problems didn’t seem too serious to customers.

“It appears the issues were related to hardware failures in the field due to manufacturing errors,” Curlin wrote. “However, contacts report unsuccessful attempts by EMC to decommission already shipped systems, as customers were adequately satisfied with performance. Furthermore, we believe the issues have been resolved.”

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