CNT Banks on UMD

Closes SAN extension deal with financial services firm; looking to place new directors soon

September 16, 2004

2 Min Read
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After losing $5.5 million last quarter, Computer Network Technology Corp. (CNT) (Nasdaq: CMNT) will welcome any new business -- especially when its worth $2.7 million (see CNT Takes a Hit, CNT Cuts Anticipated, and CNT Wins Financial Services Projects).

The SAN extension and switch vendor today announced it secured three projects with a global financial services company. CNT isn’t naming the customer, although CNT executive Brian Larsen says it is one which already had CNT gear installed. But what really makes the deal sweet is it gives CNT a chance to follow its master turnaround plan. The plan: to coax existing customers to adopt its new 256-port, feature-rich UltraNet Multi-service Director (UMD) (see CNT Stakes Claim on New Director).

The new deal involves the purchase of five CNT UltraNet Storage Directors-eXtended (USD-X) and 12 UltraNet Edge Storage Routers for remote replication, tape vaulting, and data migration projects. The first project will use the USD-X to extend a new tape vault between New York and New Jersey for disaster recovery. The second job -- that of remote replication -- will use a router to extend the network over 3,000 miles. The third project will migrate data from a data center in New York to one in the southeastern United States.

This was apparently one of the large deals that got pushed from last quarter and contributed to CNT’s heavy loss. That prompted the company to lay off 220 and announce a new strategy built around the UMD it acquired by purchasing Inrange Technologies for $190 million in April 2003 (see CNT Delivers New Director and CNT Walks Off With Inrange).

Instead of being a blast from the past, CNT hopes the new deal shows what the future can bring. To successfully crash what is now a three-vendor party of Brocade Communications Systems Inc. (Nasdaq: BRCD), Cisco Systems Inc. (Nasdaq: CSCO), and McData Corp. (Nasdaq: MCDTA) in the director space, CNT must get a foothold with current customers as its UMDs become available in the next few months. Reseller deals with IBM Corp. (NYSE: IBM) and EMC Corp. (NYSE: EMC) help, but brand new customers might be leery of CNT, considering its financial situation (see IBM Certifies New CNT Director and EMC to Resell CNT).In the case of its $2.7 million deal, it helps that CNT is a familiar face. Larsen, CNT’s senior director of connectivity and extension products, says the customer is running CNT’s FC/9000 Fibre Channel/Ficon Director now, but is testing the UMD switch.

“They’re testing (UMD) in a parallel production environment this month, and we hope they’ll put in production,” Larsen says. “They’ve standardized on our storage architecture for Ficon on mainframes, and we hope to do the same for open systems.”

— Dave Raffo, Senior Editor, Byte and Switch

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