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October 2, 1997updated 03 Sep 2016 6:51pm

EMC SEPARATES OUT MCDATA FIBER OPTIC NETWORK SWITCH BUSINESS

By CBR Staff Writer

When EMC Corp acquired network switch company McData Corp back in 1995 (CI No 2,780) it found itself in charge of the company that makes a crucial component of IBM Corp’s Escon channel extender, the communications system between mainframes and its DASD storage. McData makes Escon Director, essentially a router or smart switch for fiber optic channels, under license from IBM. Now, as the whole issue of fiber optic storage is becoming more of an issue, EMC is separating McData Holdings Corp – as wholly owned subsidiary of EMC – to continue the IBM business, and forming a new company, McData Corp, to take advantage of the major growth opportunities in the Fiber Channel networking marketplace. McData Corp has been formalized and capitalized as an independent company, with EMC described as the initial majority investor, and has an independent board of directors. EMC recently announced the ES-4000, its first high-availability Fiber Channel switch for data centers. Some in the industry think the realignment is purely a matter of posturing, putting some distance between McData and EMC to offer IBM assurance that some of the proprietary development that McData does for them will not transfer to EMC. The relationship has been working well for about two years, but as they move further into the area of fiber channel the sensitivity heightens and, as IBM accounts for the bulk of McData’s revenue, considerations must be made.

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