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Cisco, McData Spar at Wal-Mart

Posted by iNext - 2006-02-17

It turns out the McData-Cisco faceoff for Wal-Mart business in mid-2004 was just round one in an ongoing brawl that may not be over yet.
Each vendor so far has won a bid to place its director switches in the retail giant’s data center. McData won the first tussle despite an alleged late plea by Cisco CEO John Chambers himself. But sources report that Cisco rebounded to win a rematch in the fall of 2005.

However, the second bid was apparently for additional directors. Though Cisco seems to have won, Wal-Mart did not replace its McData gear.

As with the previous deal, official comments are hard to come by regarding round two. Wal-Mart likes to keep a tight lid on what it’s using in its data center and did not return calls to its Bentonville, Ark., headquarters for comment.

Neither Cisco nor McData is about to upset a customer with one of the world’s largest SANs, either. Cisco would not confirm the win, and a McData spokeswoman would only say rumors that Cisco won a rip-and-replace deal over McData aren't true.

“That’s absolutely false,” says McData PR manager Jil Backstrom. “No McData products have been removed.”

Two Wall Street analysts, who asked not to be named, confirm Cisco’s victory and McData’s claim that it was not a rip-and-replace. “Cisco won a large deal versus McData for director business in the October quarter,” one analyst says. “A very large deal. But I believe it was new business, not a replacement of McData.”

Another financial analyst says he spoke to a Wal-Mart IT staffer last fall. "He said they would start bringing in Cisco directors. Not a rip-and-replace, but they would add Cisco.”

Nobody seems to know why Wal-Mart went with Cisco just months after picking McData directors. Possibilities include a wish to buy storage equipment from a networking gear vendor. Perhaps Chambers’ lobbying finally paid off. Or maybe Wal-Mart was unimpressed by McData’s new directors.

One thing: A company with a SAN as large as Wal-Mart's is likely to add switches and directors again down the road, so we can look forward to round three in the “Battle for Bentonville.”

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