June 24, 2010 – PMC-Sierra completed its acquisition of Adaptec earlier this month, and is now fine-tuning its game plan for entering the channel. PMC acquired Adaptec’s channel storage business, including its RAID hardware and software products.
PMC-Sierra paid approximately $34 million for Adaptec, which at one time (about ten years ago) had annual revenues in the $800-million ballpark.
In case you’re not on the chip side of the storage industry: PMC-Sierra is a fabless semiconductor company that originally focused on telcom chipsets but has since branched out into many other industries. The company entered the storage market about nine years ago with Fibre Channel chips, but has more recently focused on SAS chipsets. PMC’s enterprise storage business is now the company’s largest business segment.
Until the Adaptec acquisition, PMC-Sierra focused primarily on semiconductors for OEMs. But in addition to Adaptec’s RAID product line, PMC now has access to Adaptec’s extensive channel partner network.
“We’ll sell Adaptec’s products through their channel, but the acquisition also gives us an avenue to sell PMC products more broadly, beyond our OEMs,” says Mark Stibitz, vice president and general manager of PMC-Sierra’s enterprise storage business.
On the storage semiconductor front, PMC competes primarily with LSI and, to a lesser degree, vendors such as Marvell, Emulex, Intel and others.
On the RAID adapter/controller front in the channel, PMC will continue to compete most directly with LSI (which is the #1 vendor in the x86 RAID channel market, followed by Adaptec at #2), as well as other vendors such as HighPoint, Promise Technology, Areca and Atto Technology.
In other words, the PMC-LSI battle will turn into a war.
Meanwhile, LSI has expanded its channel presence by offering its white box partners external RAID building blocks (see “LSI expands in channel with external RAID”).
The channel-based x86 RAID market is estimated at $200 million/year.
Adaptec has been primarily using Intel’s RAID-On-Chip (ROC) ASICs in its 3Gbps SAS products, and will continue to develop and support the Intel-based products. But when the company makes the transition to 6Gbps SAS – its next major product introduction – it will use PMC-Sierra’s 6Gbps SAS chips, according to Jared Peters, formerly with Adaptec and now vice president and general manager of PMC’s channel storage division. The company is expected to release the PMC-based 6Gbps SAS products in the first quarter of 2011.
As a result of PMC’s acquisition, the vendor formerly known as Adaptec has changed its name to ADPT Corp.
Related articles from InfoStor:
PMC-Sierra to buy Adaptec’s channel storage business
LSI ships 6Gbps RAID array
Adaptec enables SSD + HDD RAID [MaxIQ SSD caching products]