McData recently announced intentions not only to buy two promising start-ups and invest in a third, but also to remain a serious player in the SAN market. McData already owns a big chunk of the high-end Fibre Channel director market, but that has been nibbled away by rival Brocade and by the emergence of Ethernet giant Cisco on the Fibre Channel scene.

McData acquired Sanera Systems and Nishan Systems and invested in storage processor chip designer Aarohi Communications. Sanera makes director-class switches like the ones McData makes, but Sanera's director switches are intelligent and have greater scalability. Nishan produces IP storage switches capable of handling iSCSI and iFCP while providing Fibre Channel connectivity. This gives McData a huge leg up in the IP storage market and a flexible known product to sell in that arena. The investment in Aarohi provides the raw storage network processors to expand McData's offerings in the future.

McData's stock price has been hit over these moves, but it will benefit the company in the long run, making McData, formerly something of a one-trick pony, into a more well-rounded and diverse storage company. These changes put the vendor in a position to compete with Cisco and Brocade in an increasingly price-aggressive market.

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