McData Founder Returns to Software

Says switch business is commoditized, real value lies in management software

June 15, 2005

2 Min Read
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After founding McData Corp. (Nasdaq: MCDTA) and running it for 21 years, Jack McDonnell says the SAN switch business has become commoditized. He decided his next company should sell software because that’s where the value lies.”

McDonnell stepped down as McData’s chairman in January 2004, then sunk his own money into storage management software startup Crosswalk Inc., which began shipping product last October and now has an undisclosed number of customers (see McData Names Kelley as Chairman and McData Vets at Crosswalk). He says the value in storage now lies in the software that runs and manages it.

“I see a compelling need for a different approach,” he says. “There’s a need for products that tie storage devices to infrastructure and the applications that use them. Storage arrays are expensive because of software content, not because of the number of disks plugged into them.”

Crosswalk’s initial product, Crosswalk Storage Manager, creates a knowledge base of a SAN’s physical and logical resources to help monitor and manage them. The strategy is to go after midsized companies with multiple suppliers, which either don't want to use one of their vendors' packages or are put off by the cost of third-party products. Crosswalk competes with the likes of AppIQ Inc.and CreekPath Systems Inc.

Crosswalk’s approach isn’t a complete departure for McDonnell. The startup licenses McData’s SANavigator storage management software as part of its Crosswalk Storage Manager. And McDonnell's roots are in software development.“When I started my career 100 years ago, I was a software guy and did a lot of systems projects,” he says. “I was excited to get back into software, because that’s where the value lies.”

As for his old company, McDonnell says the Fibre Channel switch business has lost a lot of value for its vendors because it has become commoditized, and distribution is controlled by OEMs.

“You get out there, you get a lot of momentum, then sell switches with an OEM model and it becomes commoditized. That’s where that business is now.”

As for his new venture, McDonnell's plans are to build Crosswalk into a public company. Before that, he’ll probably seek VC funding. One thing: He's in a hurry to turn a profit. “My wife tells me it will have to be soon."

Watch for the full interview with McDonnell on Byte and Switch shortly.— Dave Raffo, Senior Editor, Byte and Switch

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