McData Takes a Direct Hit

Despite attempts by McData to downplay problems with its 256-port i10K director, customers arent buying. (See McData Disappoints.)

McData CEO John Kelley today said the company’s revenue for last quarter was below his previous forecast, and listed poor i10K sales as one of the reasons. The admission comes after months of confusion over why the director has yet to pass qualification testing at EMC. (See McData's Qualification Quagmire.)

The i10K is McData’s new flagship director that Kelley said last year he was hoping customers would embrace in 2005. (See McData Goes on Offensive.) McData killed the popular CNT Ultra Multiservice Director (UMD) director and kept the i10K after acquiring CNT in May. (See McData Bags CNT for $235M and RIP: CNT UMD.)

However, although McData’s largest OEM partner EMC does sell the director, it has yet to certify the i10K and sell it under its brand. In September, Kelley said there were “small obstacles” left to overcome, but he hoped for EMC’s qualification by the end of the month. Now it’s November, and he admits EMC’s lack of qualification is a problem, though Hitachi Data Systems and IBM have qualified the i10K.

In a statement released today, Kelley attributed “lower than expected sales of our Intrepid 10000 director” to lack of demand overall for directors. “In addition, while our largest storage OEM, EMC, continues to ship the Intrepid 10000 to customers, they have not yet announced general availability of the product," he said.What’s the problem with the director? Industry sources say there have been a few glitches along the way. The director didn’t function in high heat, and early customers found it hard to install because it is a different architecture than other McData directors. McData and other sources say the problems have been fixed, but neither EMC nor customers appear fully convinced.

For the quarter, McData expects revenue of from $164 million to $167 million now, compared to a previous forecast of between $174 million to $182 million. Kelley also blamed "inefficiencies within our manufacturing process” and a disappointing services revenue as McData and CNT combine sales forces.

— Dave Raffo, Senior Editor, Byte and Switch

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