Switching Gears

The Fibre Channel switch landscape will look substantially different at the start of 2007 than it did at the start of 2006, thanks to a major acquisition and a handful of significant product rollouts.

Here's how the Fibre Channel switch market looked coming into 2006: Cisco was mounting a strong challenge to McData's historic dominance in directors, with Brocade trying to make a run due to its first mover advantage with its 4-Gbit/s gear. Brocade continued to dominate in fabric switches, with McData hoping to move up with its new Sphereon switches. Cisco didn't have a strong product line in fabric switches and QLogic was trying to get into the game as a low-cost alternative.

The big news since then is Brocade announced its pending $713 million acquisition of McData, expected to close early next year if all the antitrust regulation hurdles are cleared. (See Brocade Bags McData For $713M.) But two more recent product moves also change the scenery.

This week Cisco showed it is serious about fabric switches, with its MDS 9124 4-gig entry due to begin shipping through storage vendors in December. (See Cisco Salvo in 4-Gig FC.) The switch is Cisco's first 4-gig fabric switch, and its first switch that has enterprise features in common with its MDS 9500 director series.

That move came little more than a month after QLogic launched its first director, a 128-port device that can be stacked to support 256 ports. (See QLogic Grabs Director's Chair.)What does this all mean? First, that Cisco is still committed to Fibre Channel storage -- a notion many people doubted nine months ago. (See Cisco Distracted?.) Besides the MDS 9124, Cisco promises its first Fibre Channel blade server switches next year for Hewlett-Packard and IBM blade servers. (See Cisco Teams With IBM, HP.)

Second, even when Brocade fades out McData products, customers will still have several valid choices in each product line. They can choose between Brocade, Cisco, and QLogic gear in the director, fabric switch, and blade switch segments.

For the record, Brocade says it will continue to sell and support McData's products, so there will actually be four vendors selling directors and fabric switches. But that's a temporary situation at best. In a couple of years when 4-gig Fibre Channel gives way to 8-gig or perhaps 10-gig, Brocade will have one product platform.

Among this shift, there is reason for customers to give thanks this week ('tis the week for giving thanks, after all). They could find switch pricing favorable to them in the coming months. When the Brocade-McData deal was announced, there was a fear that having a Brocade-Cisco duopoly would raise switch prices in the face of less competition. Now it looks like the opposite is true, for the short term at least.

McData already showed it is willing to deal. Last quarter it increased revenue while losing money -- a strong hint that it dropped prices to make deals. (See McData Finishes With a Flourish.) Now Cisco lauds its new switch as price-competitive -- something you don't hear often from Cisco -- and QLogic is pinning its director hopes on a strong pricing advantage. Brocade won't have much choice but to keep its prices low, too. And Cisco's entry into blade switches alongside Brocade and QLogic puts three strong competitors there for the first time.Of course, the current situation won't last. Eventually McData products will go away and there is no guarantee HBA vendor QLogic can cross over successfully. A few years from now, we could be left with Brocade and Cisco as the only Fibre Channel switch vendors. They would be able to keep prices high as Brocade and McData did before Cisco invaded their turf, and as Emulex and QLogic have done as the only two major HBA alternatives.

Then again, as the last year has showed us, there could be several new twists coming our way soon.

Dave Raffo, News Editor, Byte and Switch