That is the picture that McData painted yesterday. The change in strategy it was referring to was the SAN switch and director maker’s widely known efforts to reduce its reliance on its OEM partners. McData also said that despite Brocade’s claim, only one member of the trio was a vice president at McData.
Speaking exclusively to Computerwire, the company broke cover after initially declining to comment on the exit of its vice president of OEM and channel development, and its senior directors of its OEM relationships with EMC and IBM.
The defections to its largest rival add to McData’s recent revenue problems, and to the exits last month and in November of its senior marketing vice president and executive vice president of sales respectively. As such, they looked bad for business.
Whatever we say is going to look defensive, said Gary Gysin, McData’s senior vice president of worldwide sales.
But Gysin said that a McData internal presentation to sales staff in February was headlined We’ve Made The Turn – Are You Ready? and illustrated the causes for the latest resignations.
Because of our new direction, some people may be asked to leave, and some people may choose to leave because they don’t fit the new business model, Gysin said. We expected change.
In its last fiscal quarter 70% of McData’s revenue came via its OEM relationships with EMC and IBM. For some while McData has been trying to reduce its reliance on OEMs – especially on EMC, which hurt McData badly last year by forcing it to cut its prices.
Over the last year McData has recruited extra OEMs, some of which have only recently came on-stream, and more significantly it has tripled its channels sales force.
SAN switch and director sales are currently hugely dominated by the big four OEMS – EMC, IBM, HP and Hitachi. Some analysts say that this will change over the next couple of years, and not just because of McData’s efforts with the channel.
Cisco is going to change the dynamic when it goes direct. We have to get in front of customers so that they know who we are, and start to ask for our hardware by name, Gysin said.
Although Brocade is committed to its OEM-only sales strategy, according to one source it is also stepping up in its so-called in-front sales efforts made directly to users.
When does McData expect Cisco to go direct? This year or next. The OEM model is not in their DNA, Gysin said.
McData’s efforts to cut the proportion of its sales made via EMC have been slow moving. Yesterday Gysin declined to predict future percentages. You’ll see tremendous growth from our other partners, he said.
