Cisco, McData in Director Draw

Cisco Systems Inc. (Nasdaq: CSCO) moved into a dead heat with McData Corp. (Nasdaq: MCDTA) for director revenue in the fourth quarter of 2004, according to the market research firm The Yankee Group.

The Yanks estimate that Cisco and McData each pulled in $46.9 million in revenue from directors, giving them 32.6 percent market share apiece. McData, which dominated the director market until the past year, slipped from 36.8 percent market share in the third quarter. Cisco was at 28.9 percent share in that quarter.

McData remains No. 2 behind leader Brocade Communications Systems Inc. (Nasdaq: BRCD) in the total Fibre Channel switch market, but Cisco has steadily made great strides in the high-end director space. Yankee Group analyst Stephanie Balaouras says Cisco grew director revenue 90 percent since the research firm began tracking Ciscos storage revenue in the first quarter of 2004.

Cisco had $24.8 million in director revenues in the first quarter of 2004 and increased in double digits sequentially each quarter to catch McData. Balaouras attributes Cisco’s gains to its having technological leads in areas such as virtual SAN (VSAN) partitioning, multiprotocol routers, and iSCSI blades (see Cisco Flaunts Fancy SAN Features and Cisco Readies Multiprotocol Switch). Meanwhile, McData spent much of 2004 waiting to ship new products (see McData Goes on Offensive and McData's Ready for Rollout).

“A lot of Cisco’s gain has been at the expense of McData,” she says. “The good news for McData is that CNT has had a couple of good quarters in a row.”