February 28, 2011 – If you look at the converged network adapter market through the eyes of a storage professional, the first two vendors that may come to mind are Emulex and QLogic. If you look at it from a network professional’s view, you might think first of Intel and Broadcom. And if you’re into the high performance computing/clustering space, you might think of Mellanox.
There’s another key player in the converged adapter market: Chelsio Communications, which today announced a line of Unified Wire Adapters based on its Terminator 4 (T4) chips.
I recently spoke with Kianoosh Naghshineh, Chelsio’s CEO.
In the converged adapter market, vendors tend to crow about a few things: first to market, which generation silicon they’re on, how many storage/networking protocols they support and/or offload, how many virtualization standards they support, and how many ports per adapter they have.
Chelsio is firing on all those fronts. For example, the company introduced seven fourth-generation (T4-based) PCIe 2.0 adapters today with a variety of port configurations, including a version with four 10GbE ports and a version with four 1GbE ports. That differentiates Chelsio from some of the other players in the converged adapter market.
I hate to draw up laundry lists, but there’s no other way to convey how Chelsio differentiates itself from some of the other, more well-known, players – so here we go:
In terms of offload functionality, Chelsio has a TCP/IP Offload Engine (TOE), and also claims to be able to offload iWARP RDMA, iSCSI (full offload in T4), FCoE (open FCoE as well as full HBA, or hardware-based, FCoE offload ), UDP, and Multicast – most of which is new in the fourth generation adapters. The adapters also support the Data Center Bridging (DCB) protocol. (Of course, this begs the question of who would possibly want, or need, to run all of those protocols, but that’s a subject for another blog post.)
In terms of virtualization-related standards, Chelsio claims to support SR-IOV, VEB, VEPA, Flex10 and QFC/VNTag in its fourth-generation T4 adapters. The converged network adapters also include an embedded switch, which can be beneficial in virtualized environments because it can switch traffic from as many as 140 virtual and physical ports per adapter.
And Chelsio supports all that stuff on a single card and with one firmware version. (Some other converged network adapter vendors have different cards/firmware for different protocols.)
Pricing for Chelsio’s adapters starts at $579.
Unlike some other converged network adapter vendors, Chelsio does not announce all of its OEM design wins, but its publicly-announced server/storage OEMs include EMC (Isilon and Data Domain), HP, IBM, NEC and SGI. And Chelsio claims more than 100 OEM platform wins; 100,000+ ports shipped; and year-over-year revenue growth of 50%.
My point? The market for CNAs will be much more crowded and competitive than originally expected.
Related blog posts:
Intel’s card play in unified networking
Broadcom claims 2 million+ IOPS on converged controller
Related articles:
Emulex ships 10GbE CNAs to the channel
QLogic announces 10GbE NICs, CNAs
Showing posts with label Emulex. Show all posts
Showing posts with label Emulex. Show all posts
Monday, February 28, 2011
Sunday, January 2, 2011
The Top Ten Storage Acquisitions of 2010
January 3, 2011 -- I originally posted a Top Ten acquisitions list in September, under the assumption that after the blockbuster HP-3PAR buyout we may have seen the last of the big storage acquisitions for the year. Wrong. The storage industry capped a crazy year of M&A fever with the EMC-Isilon and Dell-Compellent acquisitions. With those additions, I had to knock off from the list a few of the relatively minor acquisitions of the year, including SolarWinds’ acquisition of Tek-Tools and Exar’s buyout of Neterion.
Here's my revised list of the Top 10 storage acquisitions of 2010, in ascending order:
#10: PMC-SIERRA – ADAPTEC
Throughout the 1990s, Adaptec was synonymous with SCSI, and had a lock on the SCSI controller/adapter market. The company reached its heyday when it racked up revenues of about $800 million in fiscal 2000. But Adaptec didn’t see the winds of change blowing.
PMC-Sierra acquired Adaptec this summer for a mere $34 million.
In addition to Adaptec’s technology and products, PMC acquired Adaptec’s extensive channel, where it is still strong in RAID adapters.
PMC-Sierra’s acquisition of Adaptec puts the company in even more intense competition with arch enemy LSI. Now PMC will compete in the channel with LSI at the board level, whereas previously the battle was fought primarily on the semiconductor front.
Related articles:
PMC-Sierra to buy Adaptec’s channel storage business
PMC-Sierra ships 6Gbps SAS controllers
#9: NETAPP – BYCAST
The terms of the NetApp-Bycast deal were not disclosed. According to our original article on the acquisition: “NetApp is advancing its efforts in the cloud storage market with the acquisition of Bycast, a developer of object-based storage virtualization software that turns multiple storage devices across geographically-dispersed locations into a single pool for storing fixed content data.”
See “NetApp to acquire Bycast for cloud storage software”
NetApp plans to leverage Bycast technology to go after markets such as digital media, Web 2.0, healthcare, and cloud services providers.
Bycast’s flagship product is its StorageGRID virtualization software. It will be interesting to see what happens to some of Bycast’s existing OEM deals, which include partnerships with IBM and HP.
#8: EMULEX – SERVERENGINES
Prior to acquiring ServerEngines, Emulex was in a dicey position: The company licensed critical technology, including 10GbE ASICs, from ServerEngines and that technology was key to Emulex’s (at the time) risky gamble of betting the farm on 10GbE (and going head-to-head with Ethernet giants Broadcom and Intel, in addition to long-time rival QLogic and others).
The position was dicey because a competitor could scoop up ServerEngines, thus pulling the rug from underneath Emulex’s strategy. Emulex paid a high price for ServerEngines, but there wasn’t any choice.
According to our original article on the acquisition: “Emulex will acquire ServerEngines for $78 million in cash and eight million shares of Emulex stock. Based on Emulex’s closing price of $10.11 last week, those eight million shares would translate into an additional $81 million, bringing the total to almost $160 million.”
But wait, there’s more: “In addition, Emulex will issue four million shares of stock if ServerEngines meets certain business objectives by the end of 2011. Emulex also agreed to assume ServerEngines’ debt, which is currently $25 million. As such, the deal could eventually exceed $200 million.”
See “Emulex to acquire ServerEngines”
The bet, and the acquisition, seem to have paid off. Emulex has racked up a number of OEM design wins for its 10GbE/FCoE/iSCSI converged network adapters (CNAs), including Dell, EMC, HDS, HP, IBM and NetApp.
ServerEngines was founded in 2004 by former Broadcom engineers that were previously with ServerWorks, which was acquired by Broadcom in 2001. In early 2009, Broadcom launched an unsuccessful hostile takeover of Emulex.
#7: DELL – OCARINA
Rumored to be in the $150 million ballpark, Dell’s acquisition of Ocarina came as a surprise to almost everybody, and (along with #6, see below) confirmed that capacity optimization (data deduplication and/or compression) of primary storage is The Next Big Thing.
According to my original blog post on this acquisition (see “Dell to acquire Ocarina for data deduplication”): “Until the announcement of its embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive.”
I think Dell will initially leverage Ocarina’s technology in image-intensive, fixed-content applications on primary storage. That space is where, so far, Ocarina has made its mark, with large wins at companies such as Kodak. Dell will probably continue to resell Symantec, CommVault and Data Domain software where those companies’ technologies make more sense, or where customers demand it.
And in a related Top 10 acquisition . . .
#6: IBM – STORWIZE
This one had been rumored for weeks before IBM made it official, so it ranks low on the surprise factor but high on the industry influence scale. Even more than the Dell-Ocarina deal, and even more than NetApp’s evangelizing, IBM’s acquisition of data compression specialist Storwize put data reduction for primary storage in a top spot among Hot Storage Technologies.
Rumors put this deal in the range of $140 million.
Storwize’s data reduction technology differs from some of its competitors in that it is in-line, real-time compression, as opposed to data deduplication.
It’s certainly not an understatement to say that being acquired by IBM was the smartest thing Storwize did since changing its name from Storwiz.
The Storwize product line is now part of the IBM Real-time Compression business unit.
See “IBM to Buy Storwize for Real-Time Data Compression” on InfoStor partner site Enterprise Storage Forum.
#5: VISION SOLUTIONS – DOUBLE-TAKE
This one ranked high on the surprise factor and it also ranked high in dollars, being valued at $242 million.
That amounted to about $10.55 per Double-Take share. Double-Take went public in 2006 at about $11 a share.
Prior to the Vision Solutions announcement, it was well known that Double-Take was on the block, with vendors such as Dell and HP considered to be potential acquirers.
Vision Solutions specializes in data protection software for IBM systems, while Double-Take’s strengths are in backup, replication, disaster recovery and high availability software, primarily for Microsoft platforms.
See “Vision Solutions to acquire Double-Take”
#4: EMC – GREENPLUM
I never did find out exactly what EMC paid for Greenplum, a data warehousing and analytics specialist, but my (questionable) sources tell me that the acquisition payment would easily put the deal near the top of this list.
Greenplum claims more than 100 customers, including NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.
In addition to its massively parallel processing (MPP) Greenplum Database, the company has Greenplum Chorus, a cloud platform for collaboration and data sharing. Greenplum became the foundation of a new division within EMC’s Information Infrastructure business.
Greenplum is a nice fit with EMC’s cloud initiatives, but it also heats up the competition between EMC, Oracle, IBM and Sun.
See “EMC acquires data warehousing vendor Greenplum”
#3: DELL – COMPELLENT
This one may not be a done deal, but it’s pretty close so Dell’s “take-under” acquisition of Compellent takes the #3 spot on our list. The latest offer is $27.75 per share, which translates into about $960 million, or $820 million net of Compellent’s cash.
In a sense, Compellent is a consolation prize after Dell lost the bidding war with HP over 3PAR. Acquiring 3PAR would have solidified Dell’s position in high-end disk arrays, but Compellent fills out Dell’s mid-range (and slightly high-end) positioning.
It will be interesting to see how Dell positions Compellent’s disk arrays relative to the EqualLogic product line (which grew 66% in revenues over the last year), but it will be even more interesting to see what happens to Dell’s EMC reseller agreement.
#2: EMC – ISILON
EMC shelled out around $2.25 billion for scale-out NAS vendor Isilon Systems, net of Isilon’s existing cash balance. That’s an eye-popping amount of cash, particularly considering that Isilon was barely profitable, but market researcher IDC predicts that the scale-out NAS market will grow on average about 36% annually, reaching an estimated $6 billion in 2014.
According to EMC’s press release on the announcement: “EMC’s Atmos and Isilon’s solutions will offer customers a highly scalable, low-cost storage infrastructure for managing ‘Big Data’ . . . EMC Atmos object storage provides the perfect complement to Isilon for massive globally distributed environments and object access to data for usages like Web 2.0 applications.”
EMC officials estimate that the combined revenue from the Isilon and Atmos platforms will hit a $1 billion run rate during the second half of 2012. EMC also emphasized synergies between Isilon’s clustered scale-out NAS platforms and systems/software from Greenplum.
Isilon wasn’t EMC’s only acquisition this year. The company bought Bus-Tech about a week prior to the Isilon announcement. Bus-Tech specializes in VTL technology for mainframe environments. The financial terms of the Bus-Tech acquisition were not disclosed.
See “EMC snaps up Isilon for $2.25 billion” on InfoStor partner site Enterprise Storage Forum.
#1: HP – 3PAR
By virtue of its price ($2.4 billion) and the drama of the bidding war with Dell (which started at $1.15 billion), HP’s acquisition of 3PAR was clearly the #1 storage acquisition of 2010.
The acquisition of 3PAR puts HP in a much better competitive position, but it will be interesting to see what happens to the rest of HP’s disk array lineup. Does the 3PAR acquisition sound the death knell for the venerable EVA line? And what will be the fate of HP’s reseller deal with Hitachi? Months after the acquisition was announced, we still have more questions than answers on this acquisition.
2010 wasn’t a record-setting year in terms of the number of storage acquisitions, but it certainly was a record setter in terms of the amount of money that was shelled out.
As we enter 2011, the big question is: Who will be acquired next? According to the financial analyst community, CommVault is the most likely storage vendor to be acquired, but other possibilities cited by financial analysts include (in no particular order) Xiotech, Brocade, BlueArc, FalconStor and NetApp.
Related article:
Top 10 Storage Predictions for 2011 (by Henry Newman, on Enterprise Storage Forum)
Here's my revised list of the Top 10 storage acquisitions of 2010, in ascending order:
#10: PMC-SIERRA – ADAPTEC
Throughout the 1990s, Adaptec was synonymous with SCSI, and had a lock on the SCSI controller/adapter market. The company reached its heyday when it racked up revenues of about $800 million in fiscal 2000. But Adaptec didn’t see the winds of change blowing.
PMC-Sierra acquired Adaptec this summer for a mere $34 million.
In addition to Adaptec’s technology and products, PMC acquired Adaptec’s extensive channel, where it is still strong in RAID adapters.
PMC-Sierra’s acquisition of Adaptec puts the company in even more intense competition with arch enemy LSI. Now PMC will compete in the channel with LSI at the board level, whereas previously the battle was fought primarily on the semiconductor front.
Related articles:
PMC-Sierra to buy Adaptec’s channel storage business
PMC-Sierra ships 6Gbps SAS controllers
#9: NETAPP – BYCAST
The terms of the NetApp-Bycast deal were not disclosed. According to our original article on the acquisition: “NetApp is advancing its efforts in the cloud storage market with the acquisition of Bycast, a developer of object-based storage virtualization software that turns multiple storage devices across geographically-dispersed locations into a single pool for storing fixed content data.”
See “NetApp to acquire Bycast for cloud storage software”
NetApp plans to leverage Bycast technology to go after markets such as digital media, Web 2.0, healthcare, and cloud services providers.
Bycast’s flagship product is its StorageGRID virtualization software. It will be interesting to see what happens to some of Bycast’s existing OEM deals, which include partnerships with IBM and HP.
#8: EMULEX – SERVERENGINES
Prior to acquiring ServerEngines, Emulex was in a dicey position: The company licensed critical technology, including 10GbE ASICs, from ServerEngines and that technology was key to Emulex’s (at the time) risky gamble of betting the farm on 10GbE (and going head-to-head with Ethernet giants Broadcom and Intel, in addition to long-time rival QLogic and others).
The position was dicey because a competitor could scoop up ServerEngines, thus pulling the rug from underneath Emulex’s strategy. Emulex paid a high price for ServerEngines, but there wasn’t any choice.
According to our original article on the acquisition: “Emulex will acquire ServerEngines for $78 million in cash and eight million shares of Emulex stock. Based on Emulex’s closing price of $10.11 last week, those eight million shares would translate into an additional $81 million, bringing the total to almost $160 million.”
But wait, there’s more: “In addition, Emulex will issue four million shares of stock if ServerEngines meets certain business objectives by the end of 2011. Emulex also agreed to assume ServerEngines’ debt, which is currently $25 million. As such, the deal could eventually exceed $200 million.”
See “Emulex to acquire ServerEngines”
The bet, and the acquisition, seem to have paid off. Emulex has racked up a number of OEM design wins for its 10GbE/FCoE/iSCSI converged network adapters (CNAs), including Dell, EMC, HDS, HP, IBM and NetApp.
ServerEngines was founded in 2004 by former Broadcom engineers that were previously with ServerWorks, which was acquired by Broadcom in 2001. In early 2009, Broadcom launched an unsuccessful hostile takeover of Emulex.
#7: DELL – OCARINA
Rumored to be in the $150 million ballpark, Dell’s acquisition of Ocarina came as a surprise to almost everybody, and (along with #6, see below) confirmed that capacity optimization (data deduplication and/or compression) of primary storage is The Next Big Thing.
According to my original blog post on this acquisition (see “Dell to acquire Ocarina for data deduplication”): “Until the announcement of its embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive.”
I think Dell will initially leverage Ocarina’s technology in image-intensive, fixed-content applications on primary storage. That space is where, so far, Ocarina has made its mark, with large wins at companies such as Kodak. Dell will probably continue to resell Symantec, CommVault and Data Domain software where those companies’ technologies make more sense, or where customers demand it.
And in a related Top 10 acquisition . . .
#6: IBM – STORWIZE
This one had been rumored for weeks before IBM made it official, so it ranks low on the surprise factor but high on the industry influence scale. Even more than the Dell-Ocarina deal, and even more than NetApp’s evangelizing, IBM’s acquisition of data compression specialist Storwize put data reduction for primary storage in a top spot among Hot Storage Technologies.
Rumors put this deal in the range of $140 million.
Storwize’s data reduction technology differs from some of its competitors in that it is in-line, real-time compression, as opposed to data deduplication.
It’s certainly not an understatement to say that being acquired by IBM was the smartest thing Storwize did since changing its name from Storwiz.
The Storwize product line is now part of the IBM Real-time Compression business unit.
See “IBM to Buy Storwize for Real-Time Data Compression” on InfoStor partner site Enterprise Storage Forum.
#5: VISION SOLUTIONS – DOUBLE-TAKE
This one ranked high on the surprise factor and it also ranked high in dollars, being valued at $242 million.
That amounted to about $10.55 per Double-Take share. Double-Take went public in 2006 at about $11 a share.
Prior to the Vision Solutions announcement, it was well known that Double-Take was on the block, with vendors such as Dell and HP considered to be potential acquirers.
Vision Solutions specializes in data protection software for IBM systems, while Double-Take’s strengths are in backup, replication, disaster recovery and high availability software, primarily for Microsoft platforms.
See “Vision Solutions to acquire Double-Take”
#4: EMC – GREENPLUM
I never did find out exactly what EMC paid for Greenplum, a data warehousing and analytics specialist, but my (questionable) sources tell me that the acquisition payment would easily put the deal near the top of this list.
Greenplum claims more than 100 customers, including NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.
In addition to its massively parallel processing (MPP) Greenplum Database, the company has Greenplum Chorus, a cloud platform for collaboration and data sharing. Greenplum became the foundation of a new division within EMC’s Information Infrastructure business.
Greenplum is a nice fit with EMC’s cloud initiatives, but it also heats up the competition between EMC, Oracle, IBM and Sun.
See “EMC acquires data warehousing vendor Greenplum”
#3: DELL – COMPELLENT
This one may not be a done deal, but it’s pretty close so Dell’s “take-under” acquisition of Compellent takes the #3 spot on our list. The latest offer is $27.75 per share, which translates into about $960 million, or $820 million net of Compellent’s cash.
In a sense, Compellent is a consolation prize after Dell lost the bidding war with HP over 3PAR. Acquiring 3PAR would have solidified Dell’s position in high-end disk arrays, but Compellent fills out Dell’s mid-range (and slightly high-end) positioning.
It will be interesting to see how Dell positions Compellent’s disk arrays relative to the EqualLogic product line (which grew 66% in revenues over the last year), but it will be even more interesting to see what happens to Dell’s EMC reseller agreement.
#2: EMC – ISILON
EMC shelled out around $2.25 billion for scale-out NAS vendor Isilon Systems, net of Isilon’s existing cash balance. That’s an eye-popping amount of cash, particularly considering that Isilon was barely profitable, but market researcher IDC predicts that the scale-out NAS market will grow on average about 36% annually, reaching an estimated $6 billion in 2014.
According to EMC’s press release on the announcement: “EMC’s Atmos and Isilon’s solutions will offer customers a highly scalable, low-cost storage infrastructure for managing ‘Big Data’ . . . EMC Atmos object storage provides the perfect complement to Isilon for massive globally distributed environments and object access to data for usages like Web 2.0 applications.”
EMC officials estimate that the combined revenue from the Isilon and Atmos platforms will hit a $1 billion run rate during the second half of 2012. EMC also emphasized synergies between Isilon’s clustered scale-out NAS platforms and systems/software from Greenplum.
Isilon wasn’t EMC’s only acquisition this year. The company bought Bus-Tech about a week prior to the Isilon announcement. Bus-Tech specializes in VTL technology for mainframe environments. The financial terms of the Bus-Tech acquisition were not disclosed.
See “EMC snaps up Isilon for $2.25 billion” on InfoStor partner site Enterprise Storage Forum.
#1: HP – 3PAR
By virtue of its price ($2.4 billion) and the drama of the bidding war with Dell (which started at $1.15 billion), HP’s acquisition of 3PAR was clearly the #1 storage acquisition of 2010.
The acquisition of 3PAR puts HP in a much better competitive position, but it will be interesting to see what happens to the rest of HP’s disk array lineup. Does the 3PAR acquisition sound the death knell for the venerable EVA line? And what will be the fate of HP’s reseller deal with Hitachi? Months after the acquisition was announced, we still have more questions than answers on this acquisition.
2010 wasn’t a record-setting year in terms of the number of storage acquisitions, but it certainly was a record setter in terms of the amount of money that was shelled out.
As we enter 2011, the big question is: Who will be acquired next? According to the financial analyst community, CommVault is the most likely storage vendor to be acquired, but other possibilities cited by financial analysts include (in no particular order) Xiotech, Brocade, BlueArc, FalconStor and NetApp.
Related article:
Top 10 Storage Predictions for 2011 (by Henry Newman, on Enterprise Storage Forum)
Wednesday, August 11, 2010
Top 10 storage acquisitions of 2010
UPDATED August 16, 2010 – I originally posted this Top 10 acquisitions piece last week, with EMC's acquisition of Greenplum in the #1 spot. Today's announcement that Dell plans to acquire 3PAR for a whopping $1.15 billion clearly catapults that deal into the #1 position. As such, here's my revised list of the Top 10 storage acquisitions of 2010, in ascending order:
#10: EXAR – NETERION
This one probably wouldn’t have made the Top 10 list except for the fact that it’s Exar’s second storage-related acquisition in the last year, indicating that this relatively unknown vendor is up to something in the storage market.
The acquisition of Hifn last year put Exar in the storage optimization market with data deduplication, compression and encryption technology. Which put them into discussions that include Storwize (acquired by IBM, see below), Ocarina Networks (acquired by Dell, see below) and Permabit.
The acquisition of Neterion this year (reportedly for $10 million to $11 million) puts Exar in the 10GbE/FCoE adapter space, and might get them a place in conversations typically focused on vendors such as Emulex, QLogic, Brocade, Broadcom and Intel.
“We see a lot of synergy between Neterion’s virtual I/O technology and Hifn’s data compression, security [encryption] and data deduplication technologies,” said John Williams, vice president of Exar’s datacom and storage business.”
Interesting, but does an engineering-focused company have the marketing might to compete with the big boys? Well, Neterion OEMs include EMC, HP, IBM, Fujitsu and Hitachi, so the company at least knows how to play with the big boys.
See “Exar to acquire Neterion”
#9: SOLARWINDS – TEK-TOOLS
As with Exar, this one made the Top 10 list in large part due to the surprise factor: Few in the storage world had ever heard of SolarWinds, which specializes in network and applications management software.
Tek-Tools has for a long time specialized in storage resource management (SRM) tools, and SolarWinds plans to integrate Tek-Tools’ Profiler SRM suite into its Orion portfolio by the end of this year. Sounds like a good fit, but since when did any acquisition-driven integration project get completed on schedule?
SolarWinds paid $42 million for Tek-Tools. And if that seems steep, consider the fact that Tek-Tools partners and resellers include 3PAR, AdviStor, Agami, Bell Micro, Brocade, CA, Cambridge Computer, CDW, Dell, EMC, GlassHouse, the Harding Group, HP, IBM, Kisdata, LSI, the Microsoft Developer Network, MySQL AB, NetApp, Novell, PC Mall, Quantum, Red Hat, Siemens Business, Sun, Syncsort, Techmate, VMware and Xiotech.
See “SolarWinds acquires Tek-Tools for SRM”
#8: PMC-SIERRA – ADAPTEC
Throughout the 1990s, Adaptec was synonymous with SCSI, and had a lock on the SCSI controller/adapter market. The company reached its heyday when it racked up revenues of about $800 million in fiscal 2000. But Adaptec didn’t see the winds of change blowing. PMC-Sierra acquired Adaptec for $34 million.
In addition to Adaptec’s technology and products, PMC acquired Adaptec’s extensive channel, where it is still strong in RAID adapters.
The interesting thing about this acquisition is that it puts PMC-Sierra in even more intense competition with arch enemy LSI. Now PMC will compete in the channel with LSI at the board level, whereas previously the battle was fought on the semiconductor front.
See “PMC-Sierra to buy Adaptec’s channel storage business”
#7: NETAPP – BYCAST
The terms of this deal were not disclosed. According to our original article on the acquisition: “NetApp is advancing its efforts in the cloud storage market with the acquisition of Bycast, a developer of object-based storage virtualization software that turns multiple storage devices across geographically dispersed locations into a single pool for storing fixed content data.”
See “NetApp to acquire Bycast for cloud storage software.”
NetApp plans to leverage Bycast technology to go after markets such as digital media, Web 2.0, healthcare, and cloud services providers.
Bycast’s flagship product is its StorageGRID virtualization software. It will be interesting to see what happens to some of Bycast’s existing OEM deals, which include partnerships with IBM and HP.
#6: EMULEX – SERVERENGINES
Prior to acquiring ServerEngines, Emulex was in a dicey position: The company licensed critical technology, including 10GbE ASICs, from ServerEngines and that technology was key to Emulex’s (at the time) risky gamble of betting the farm on 10GbE – a market owned largely by Broadcom and Intel.
The position was dicey because a competitor could scoop up ServerEngines, thus pulling the rug from underneath Emulex’s (at the time) loose footing. Emulex paid a high price for ServerEngines, but there wasn’t any choice.
According to our original article on the acquisition: “Emulex will acquire ServerEngines for $78 million in cash and eight million shares of Emulex stock. Based on Emulex’s closing price of $10.11 last week, those eight million shares would translate into an additional $81 million, bringing the total to almost $160 million.”
But wait, there’s more: “In addition, Emulex will issue four million shares of stock if ServerEngines meets certain business objectives by the end of 2011. Emulex also agreed to assume ServerEngines’ debt, which is currently $25 million. As such, the deal could eventually exceed $200 million.”
See “Emulex to acquire ServerEngines.”
The bet, and the acquisition, seem to have paid off. Emulex has racked up a number of OEM design wins for its 10GbE/FCoE/iSCSI converged network adapters (CNAs), most notably with HP. This puts Emulex at the table with Intel and Broadcom (which it beat out for the HP business) and may strengthen its position vs. QLogic and Brocade. In addition to HP, Emulex has design wins with vendors such as Dell, EMC, HDS, HP, IBM and NetApp.
ServerEngines was founded in 2004 by former Broadcom engineers that were previously with ServerWorks, which was acquired by Broadcom in 2001. In early 2009, Broadcom launched an unsuccessful hostile takeover of Emulex.
#5: DELL – OCARINA
Rumored to be in the $150 million ballpark, Dell’s acquisition of Ocarina came as a surprise to almost everybody. And this one (along with #4, see below) confirmed that storage optimization (data deduplication and/or compression) of primary storage is The Next Big Thing.
According to my original blog post on this acquisition (see “Dell to acquire Ocarina for data deduplication”): “Until the announcement of its embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive.”
That led some analysts to predict that Dell is pursuing a one-size-fits-all approach to data deduplication where Ocarina’s technology will be used across the storage spectrum. If true, that would be bad news for Dell dedupe partners Symantec, CommVault and maybe even EMC Data Domain. But I don’t think that’s Dell’s game plan, at least not for the foreseeable future.
I think Dell will initially leverage Ocarina’s technology in specific image-intensive, fixed-content applications, and only on primary storage. That space is where, so far, Ocarina has made its mark, with large wins at companies such as Kodak. Dell will continue to use Symantec, CommVault and Data Domain where those companies’ technologies make more sense, or where customers demand it.
Besides, the Ocarina technology could be used in conjunction with deduplication technology from vendors such as Symantec and CommVault.
And in a related Top 10 acquisition . . .
#4: IBM – STORWIZE
This one had been rumored for weeks before IBM made it official, so it ranks low on the surprise factor but high on the industry influence scale. Even more than the Dell-Ocarina deal, and even more than NetApp’s evangelizing, IBM’s acquisition of data compression specialist Storwize put data reduction for primary storage in the #1 spot among Hot Storage Technologies.
Rumors put this deal in the range of $140 million.
IBM didn’t lay out specific plans, and it already has some good data reduction technology, but it looks like Big Blue will apply the Storwize technology to its high-end XIV system, Scale-Out Network Attached Storage (SONAS) platform, System Storage Easy Tier, and maybe even its ProtecTIER deduplication products.
Storwize’s data reduction technology differs from some of its competitors in that it is in-line, real-time compression, as opposed to data deduplication.
It’s certainly not an understatement to say that being acquired by IBM was the smartest thing Storwize did since changing its name from Storwiz.
Read the full story on InfoStor partner site Enterprise Storage Forum: “IBM to Buy Storwize for Real-Time Data Compression.” And check out Kevin Komiega’s blog post: “IBM to Acquire Storwize.”
#3: VISION SOLUTIONS – DOUBLE-TAKE
This one ranked high on the surprise factor (because Vision Solutions isn’t exactly well-known in the storage community) and it also ranked high on dollars, being valued at $242 million. Those two factors earned it the #2 ranking, although IBM-Storwize and Dell-Ocarina may be more interesting and certainly got a lot more ink.
The $242 million amounted to about $10.55 per Double-Take share. Double-Take went public in 2006 at about $11 a share.
Prior to the Vision Solutions announcement, it was well known that Double-Take was on the block, but the smart money was on vendors such as Dell and HP as potential acquirers.
Vision Solutions specializes in data protection software for IBM systems, while Double-Take’s strengths are in backup, replication, disaster recovery and high availability software, primarily for Microsoft platforms.
See “Vision Solutions to acquire Double-Take”
#2: EMC – GREENPLUM
I never did find out exactly what EMC paid for Greenplum, a data warehousing and analytics specialist, but my (questionable) sources tell me that the acquisition payment would easily put the deal near the top of this list. And besides, what would a Top 10 Storage Acquisitions list be without an EMC entry?
Greenplum claims more than 100 customers, including NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.
In addition to its massively parallel processing (MPP) Greenplum Database, the company has Greenplum Chorus, a cloud platform for collaboration and data sharing. Greenplum will become the foundation of a new division within EMC’s Information Infrastructure business.
So it’s a nice fit with EMC’s private cloud initiatives, but it also roughens up the competition between EMC, Oracle, IBM and Sun. Do you have a feeling that there’s at least one more big – very big – acquisition on the way?
See “EMC acquires data warehousing vendor Greenplum.”
#1: DELL -- 3PAR
At approximately $1.15 billion, Dell's planned acquisition of 3PAR is in the same ballpark as EMC's acquisition of Data Domain last year, both of which qualify as game changers.
Dell has commenced a tender offer to acquire all outstanding shares of 3PAR stock for $18 a share, or about an 86% permium over 3PAR's closing price on Friday.
That hefty price tag suggests that there were other bidders for 3PAR. And if anyone doubted that Dell wants to be a real (as opposed to reseller) player in the storage space, the 3PAR acquisition should assuage those doubts.
This announcement will probably once again call into question Dell's reseller partnership with EMC, but I don't see why. The Dell-EMC marriage will run its course one way or the other, but the outcome won't have anything to do with the 3PAR deal.
However, when you look at all of Dell's storage acquisitions (3PAR, Ocarina, EqualLogic, Exanet, Scalent and probably more to come), Dell and EMC could be on an accelerated path to splitsville. (Reportedly, Dell says that there is only about a 20% overlap between the 3PAR and Dell/EMC product lines.)
Historically, the summer months have been ripe for storage acquisitions so, given the prevailing climate, fasten your seatbelts. I may have to update this Top 10 list within the next two weeks.
#10: EXAR – NETERION
This one probably wouldn’t have made the Top 10 list except for the fact that it’s Exar’s second storage-related acquisition in the last year, indicating that this relatively unknown vendor is up to something in the storage market.
The acquisition of Hifn last year put Exar in the storage optimization market with data deduplication, compression and encryption technology. Which put them into discussions that include Storwize (acquired by IBM, see below), Ocarina Networks (acquired by Dell, see below) and Permabit.
The acquisition of Neterion this year (reportedly for $10 million to $11 million) puts Exar in the 10GbE/FCoE adapter space, and might get them a place in conversations typically focused on vendors such as Emulex, QLogic, Brocade, Broadcom and Intel.
“We see a lot of synergy between Neterion’s virtual I/O technology and Hifn’s data compression, security [encryption] and data deduplication technologies,” said John Williams, vice president of Exar’s datacom and storage business.”
Interesting, but does an engineering-focused company have the marketing might to compete with the big boys? Well, Neterion OEMs include EMC, HP, IBM, Fujitsu and Hitachi, so the company at least knows how to play with the big boys.
See “Exar to acquire Neterion”
#9: SOLARWINDS – TEK-TOOLS
As with Exar, this one made the Top 10 list in large part due to the surprise factor: Few in the storage world had ever heard of SolarWinds, which specializes in network and applications management software.
Tek-Tools has for a long time specialized in storage resource management (SRM) tools, and SolarWinds plans to integrate Tek-Tools’ Profiler SRM suite into its Orion portfolio by the end of this year. Sounds like a good fit, but since when did any acquisition-driven integration project get completed on schedule?
SolarWinds paid $42 million for Tek-Tools. And if that seems steep, consider the fact that Tek-Tools partners and resellers include 3PAR, AdviStor, Agami, Bell Micro, Brocade, CA, Cambridge Computer, CDW, Dell, EMC, GlassHouse, the Harding Group, HP, IBM, Kisdata, LSI, the Microsoft Developer Network, MySQL AB, NetApp, Novell, PC Mall, Quantum, Red Hat, Siemens Business, Sun, Syncsort, Techmate, VMware and Xiotech.
See “SolarWinds acquires Tek-Tools for SRM”
#8: PMC-SIERRA – ADAPTEC
Throughout the 1990s, Adaptec was synonymous with SCSI, and had a lock on the SCSI controller/adapter market. The company reached its heyday when it racked up revenues of about $800 million in fiscal 2000. But Adaptec didn’t see the winds of change blowing. PMC-Sierra acquired Adaptec for $34 million.
In addition to Adaptec’s technology and products, PMC acquired Adaptec’s extensive channel, where it is still strong in RAID adapters.
The interesting thing about this acquisition is that it puts PMC-Sierra in even more intense competition with arch enemy LSI. Now PMC will compete in the channel with LSI at the board level, whereas previously the battle was fought on the semiconductor front.
See “PMC-Sierra to buy Adaptec’s channel storage business”
#7: NETAPP – BYCAST
The terms of this deal were not disclosed. According to our original article on the acquisition: “NetApp is advancing its efforts in the cloud storage market with the acquisition of Bycast, a developer of object-based storage virtualization software that turns multiple storage devices across geographically dispersed locations into a single pool for storing fixed content data.”
See “NetApp to acquire Bycast for cloud storage software.”
NetApp plans to leverage Bycast technology to go after markets such as digital media, Web 2.0, healthcare, and cloud services providers.
Bycast’s flagship product is its StorageGRID virtualization software. It will be interesting to see what happens to some of Bycast’s existing OEM deals, which include partnerships with IBM and HP.
#6: EMULEX – SERVERENGINES
Prior to acquiring ServerEngines, Emulex was in a dicey position: The company licensed critical technology, including 10GbE ASICs, from ServerEngines and that technology was key to Emulex’s (at the time) risky gamble of betting the farm on 10GbE – a market owned largely by Broadcom and Intel.
The position was dicey because a competitor could scoop up ServerEngines, thus pulling the rug from underneath Emulex’s (at the time) loose footing. Emulex paid a high price for ServerEngines, but there wasn’t any choice.
According to our original article on the acquisition: “Emulex will acquire ServerEngines for $78 million in cash and eight million shares of Emulex stock. Based on Emulex’s closing price of $10.11 last week, those eight million shares would translate into an additional $81 million, bringing the total to almost $160 million.”
But wait, there’s more: “In addition, Emulex will issue four million shares of stock if ServerEngines meets certain business objectives by the end of 2011. Emulex also agreed to assume ServerEngines’ debt, which is currently $25 million. As such, the deal could eventually exceed $200 million.”
See “Emulex to acquire ServerEngines.”
The bet, and the acquisition, seem to have paid off. Emulex has racked up a number of OEM design wins for its 10GbE/FCoE/iSCSI converged network adapters (CNAs), most notably with HP. This puts Emulex at the table with Intel and Broadcom (which it beat out for the HP business) and may strengthen its position vs. QLogic and Brocade. In addition to HP, Emulex has design wins with vendors such as Dell, EMC, HDS, HP, IBM and NetApp.
ServerEngines was founded in 2004 by former Broadcom engineers that were previously with ServerWorks, which was acquired by Broadcom in 2001. In early 2009, Broadcom launched an unsuccessful hostile takeover of Emulex.
#5: DELL – OCARINA
Rumored to be in the $150 million ballpark, Dell’s acquisition of Ocarina came as a surprise to almost everybody. And this one (along with #4, see below) confirmed that storage optimization (data deduplication and/or compression) of primary storage is The Next Big Thing.
According to my original blog post on this acquisition (see “Dell to acquire Ocarina for data deduplication”): “Until the announcement of its embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive.”
That led some analysts to predict that Dell is pursuing a one-size-fits-all approach to data deduplication where Ocarina’s technology will be used across the storage spectrum. If true, that would be bad news for Dell dedupe partners Symantec, CommVault and maybe even EMC Data Domain. But I don’t think that’s Dell’s game plan, at least not for the foreseeable future.
I think Dell will initially leverage Ocarina’s technology in specific image-intensive, fixed-content applications, and only on primary storage. That space is where, so far, Ocarina has made its mark, with large wins at companies such as Kodak. Dell will continue to use Symantec, CommVault and Data Domain where those companies’ technologies make more sense, or where customers demand it.
Besides, the Ocarina technology could be used in conjunction with deduplication technology from vendors such as Symantec and CommVault.
And in a related Top 10 acquisition . . .
#4: IBM – STORWIZE
This one had been rumored for weeks before IBM made it official, so it ranks low on the surprise factor but high on the industry influence scale. Even more than the Dell-Ocarina deal, and even more than NetApp’s evangelizing, IBM’s acquisition of data compression specialist Storwize put data reduction for primary storage in the #1 spot among Hot Storage Technologies.
Rumors put this deal in the range of $140 million.
IBM didn’t lay out specific plans, and it already has some good data reduction technology, but it looks like Big Blue will apply the Storwize technology to its high-end XIV system, Scale-Out Network Attached Storage (SONAS) platform, System Storage Easy Tier, and maybe even its ProtecTIER deduplication products.
Storwize’s data reduction technology differs from some of its competitors in that it is in-line, real-time compression, as opposed to data deduplication.
It’s certainly not an understatement to say that being acquired by IBM was the smartest thing Storwize did since changing its name from Storwiz.
Read the full story on InfoStor partner site Enterprise Storage Forum: “IBM to Buy Storwize for Real-Time Data Compression.” And check out Kevin Komiega’s blog post: “IBM to Acquire Storwize.”
#3: VISION SOLUTIONS – DOUBLE-TAKE
This one ranked high on the surprise factor (because Vision Solutions isn’t exactly well-known in the storage community) and it also ranked high on dollars, being valued at $242 million. Those two factors earned it the #2 ranking, although IBM-Storwize and Dell-Ocarina may be more interesting and certainly got a lot more ink.
The $242 million amounted to about $10.55 per Double-Take share. Double-Take went public in 2006 at about $11 a share.
Prior to the Vision Solutions announcement, it was well known that Double-Take was on the block, but the smart money was on vendors such as Dell and HP as potential acquirers.
Vision Solutions specializes in data protection software for IBM systems, while Double-Take’s strengths are in backup, replication, disaster recovery and high availability software, primarily for Microsoft platforms.
See “Vision Solutions to acquire Double-Take”
#2: EMC – GREENPLUM
I never did find out exactly what EMC paid for Greenplum, a data warehousing and analytics specialist, but my (questionable) sources tell me that the acquisition payment would easily put the deal near the top of this list. And besides, what would a Top 10 Storage Acquisitions list be without an EMC entry?
Greenplum claims more than 100 customers, including NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.
In addition to its massively parallel processing (MPP) Greenplum Database, the company has Greenplum Chorus, a cloud platform for collaboration and data sharing. Greenplum will become the foundation of a new division within EMC’s Information Infrastructure business.
So it’s a nice fit with EMC’s private cloud initiatives, but it also roughens up the competition between EMC, Oracle, IBM and Sun. Do you have a feeling that there’s at least one more big – very big – acquisition on the way?
See “EMC acquires data warehousing vendor Greenplum.”
#1: DELL -- 3PAR
At approximately $1.15 billion, Dell's planned acquisition of 3PAR is in the same ballpark as EMC's acquisition of Data Domain last year, both of which qualify as game changers.
Dell has commenced a tender offer to acquire all outstanding shares of 3PAR stock for $18 a share, or about an 86% permium over 3PAR's closing price on Friday.
That hefty price tag suggests that there were other bidders for 3PAR. And if anyone doubted that Dell wants to be a real (as opposed to reseller) player in the storage space, the 3PAR acquisition should assuage those doubts.
This announcement will probably once again call into question Dell's reseller partnership with EMC, but I don't see why. The Dell-EMC marriage will run its course one way or the other, but the outcome won't have anything to do with the 3PAR deal.
However, when you look at all of Dell's storage acquisitions (3PAR, Ocarina, EqualLogic, Exanet, Scalent and probably more to come), Dell and EMC could be on an accelerated path to splitsville. (Reportedly, Dell says that there is only about a 20% overlap between the 3PAR and Dell/EMC product lines.)
Historically, the summer months have been ripe for storage acquisitions so, given the prevailing climate, fasten your seatbelts. I may have to update this Top 10 list within the next two weeks.
Saturday, August 7, 2010
Earnings recap: ELX, QLGC, CVLT, SYMC, PAR, CML, STEC, HDS
August 6, 2010 – Over the past couple weeks, a number of storage vendors reported quarterly earnings (or lack thereof). Overall, the storage industry seems to be on a slow rebound, driven in part by technology refreshes at the server, PC, OS and network levels.
The financial picture started out brightly with a stellar report from Isilon (see “Isilon stock soars on Q2 earnings report”), but after that results were a mixed bag. Here’s a quick recap:
EMULEX (NYSE: ELX)
The numbers: Emulex reported its fourth quarter results yesterday, with net revenues of $103.1 million, an increase of 30% over the same quarter last year and a 1% increase over the previous quarter. Q4 GAAP net loss was $2.5 million, compared to $4.5 million in Q4 of fiscal 2009.
Highlights: President and CEO Jim McCluney highlighted the company’s 10GbE/FCoE technology and design wins, most notably with HP for Emulex’s OneConnect UCNA technology. Emulex also has design wins with Cisco, Dell, EMC, Fujitsu and HDS.
Comments: Emulex bet the farm on 10GbE, and with the HP LOM win the company appears to be poised for impressive growth, although the timing of that ramp is unclear. The company will also benefit from the upcoming server upgrade cycle, which should accelerate in the fourth quarter. Emulex’s acquisition of ServerEngines (expensive but necessary) is expected to be finalized at the end of this month.
QLOGIC (NASDAQ: QLGC)
The numbers: For the three months ended June 27, QLogic earned $25.4 million, up 70% percent from $15 million in the same period a year earlier. Revenue rose 16% to $142.6 million, vs. $122.8 million a year ago. Analysts were expecting $144.1 million in revenue.
Highlights: Wall Street can be cruel to companies that have a lock on their primary markets, such as QLogic and Emulex in the Fibre Channel HBA space, because of consistently high expectations: Although QLogic’s numbers were quite good, its stock price took a hit on the day of its quarterly earnings announcement, dropping 14% at one point.
Interesting tidbit: The company had $10 million in revenue “from products serving host applications for the fast-growing converged network [FCoE] market.”
Comments: Although QLogic’s future success does in fact depend on its performance in the FCoE/CEE/DCB space, it’s too early to factor FCoE performance into QLogic’s stock performance. Next year will be The Year of FCoE reckoning, as the QLogic-Emulex-Brocade-Broadcom-Intel battle reaches war status.
COMMVAULT (NASDAQ: CVLT)
The numbers: Revenues for CommVault’s first fiscal quarter were $66.3 million, an increase of 10% over Q1 2010 and a decrease of 10% vs. the previous quarter. Net income was $3.5 million, up $1.1 million vs. the same period a year ago.
Highlights: Dell accounted for about 26% of CommVault’s revenue, up 21% year-over-year.
Comments: Some observers predicted that Dell’s recent acquisition of Ocarina Networks (see “Dell to acquire Ocarina for data deduplication”) spelled trouble for CommVault. That assumed that Dell was headed toward a one-size-fits-all approach to data deduplication. I don’t think so. Dell will probably continue with its existing dedupe-related reseller deals (CommVault, Symantec, EMC Data Domain) while leveraging the Ocarina technology in specific markets (e.g., primary storage optimization in image-intensive environments).
One good reason to stick with CommVault’s stock is the upcoming release of Simpana 9, which I understand will include some significant improvements in the areas of deduplication and virtualization.
SYMANTEC (NASDAQ: SYMC)
The numbers: Symantec reported revenue of $1.433 billion in its first fiscal quarter, essentially unchanged from $1.432 billion in last year’s Q1. But the earnings picture was brighter. The company reported net income of $161 million, compared to $74 million in Q1 2009.
Highlights: Revenue for Symantec’s largest business segment – storage and server management – fell 5% year-over-year to $524 million.
Comments: Symantec’s storage revenues should pick up in the next few quarters due to a ramp in sales of its Backup Express 10 and NetBackup 7 software (both of which were introduced early this year) and a new version of Enterprise Vault this quarter.
3PAR (NYSE: PAR)
The numbers: 3PAR’s quarterly revenues were $54.3 million, an increase of 22% vs. $44.5 million in the same period a year ago. GAAP net loss was $1.8 million, virtually identical to the company’s loss in the year earlier quarter.
Highlights: 3PAR president and CEO David Scott emphasized the company’s strengths in “multi-tenant clustering, thin technologies, and autonomic management,” all of which play well in the cloud.
Comments: Not as impressive as Isilon’s quarterly report, but companies such as 3PAR, Isilon and Compellent (see below) are proving that upstarts can put a dent in the armor of the market share leaders by leveraging truly differentiated technology, at least for awhile.
COMPELLENT (NYSE: CML)
The numbers: In its second fiscal quarter ended June 30, Compellent posted record revenue of $36.5 million, a 27% increase over the same quarter in 2009 and a 15% increase over the first quarter of 2010. GAAP net loss was $172,000, and non-GAAP net income was $1.5 million.
Highlights: Compellent claims an installed base of 2,124 customers, an increase of 182 customers vs. the previous quarter. Cash and investments totaled $132 million.
Comments: Compellent’s data movement/tiering/management technology, dubbed Fluid Data, appears to be a primary catalyst behind Compellent’s growth. Pipar Jeffray analysts noted that key risks for Compellent include “reliance on channel partners, limited international exposure, well-capitalized competitors and a challenging macro-economic backdrop.”
STEC (NASDAQ: STEC)
The numbers: Solid-state disk (SSD) specialist STEC posted revenue of $61.3 million in the second quarter. That’s a decrease of 29.1% from the second quarter of 2009, but an increase of 58% from the first quarter of 2010.
Highlights: STEC bounced back from a disappointing first quarter, posting non-GAAP gross profit margin of 42.7% vs. 34.2% in the first quarter, having resolved inventory carryover issues with its largest customer (EMC). For the next quarter, company officials are predicting revenue in the $78 million to $80 million range, indicating a continued resurgence.
Comments: STEC stock has been on a roller-coaster ride, with its 52-week price ranging from $9.47 to $42.50 a share. The company has an early lead in the enterprise SSD market, with design wins at most of the leading disk array vendors. And STEC is still the single source for SSDs at most of its customers. STEC recently introduced MLC SSDs, augmenting its SLC-based SSD product line with lower-cost alternatives. (See “MLC vs. SLC flash for enterprise SSD” on infostor.com.) And the next generation of STEC’s Zeus and Mach SSDs are due later this year, reportedly with 2X the capacity.
HITACHI DATA SYSTEMS (HDS)
Hitachi Ltd. recently reported its Q1FY10 financial results. The company’s HDS operation is not publicly traded, but here’s a recap of HDS’ results. NOTE: The following is excerpted from a report by Aaron C. Rakers, managing director at Stifel Nicolaus.
The numbers: “Consolidated revenues (revenues from HDS + revenues of storage systems sales in Japan) for the first quarter fiscal year 2010 were $804 million, up 13% year on year. This was HDS’ third consecutive record quarter. The first quarter, which ended June 30, was the best Q1 in HDS history, beating the company’s previous best first quarter by $100 million.”
Highlights: Year-over-year revenues grew across all geographies: Americas (+27%), EMEA (+4%), APAC (+19%, excluding Japan domestic sales).
Comments (from Aaron Rakers): “HDS’ Q1FY10 results continue to show increased diversity between hardware, software and services, with solid growth across all areas. Fueled by strong AMS systems sales and increased USP V/VM platform adoption, the company’s hardware revenue was up double digits from Q1FY09. Likewise, software and services revenues grew double digits year-over-year and now account for nearly half of HDS’ total revenue, which is a higher percentage compared to the previous year. The increase in software and services revenue was attributed to increased traction in virtualization software such as Hitachi Dynamic Provisioning. HDS’ file and content portfolio, which includes the Hitachi High-performance NAS Platform and Hitachi Content Platform products, also showed strong year-on-year growth; in fact, the file and content portfolio recorded a 200% increase in FY2009 compared to FY2008.”
Related articles:
EMC breaks Q2 revenue record (blog post, July 21)
NetApp wows Wall Street, doubles quarterly profits (news story, May 26)
The financial picture started out brightly with a stellar report from Isilon (see “Isilon stock soars on Q2 earnings report”), but after that results were a mixed bag. Here’s a quick recap:
EMULEX (NYSE: ELX)
The numbers: Emulex reported its fourth quarter results yesterday, with net revenues of $103.1 million, an increase of 30% over the same quarter last year and a 1% increase over the previous quarter. Q4 GAAP net loss was $2.5 million, compared to $4.5 million in Q4 of fiscal 2009.
Highlights: President and CEO Jim McCluney highlighted the company’s 10GbE/FCoE technology and design wins, most notably with HP for Emulex’s OneConnect UCNA technology. Emulex also has design wins with Cisco, Dell, EMC, Fujitsu and HDS.
Comments: Emulex bet the farm on 10GbE, and with the HP LOM win the company appears to be poised for impressive growth, although the timing of that ramp is unclear. The company will also benefit from the upcoming server upgrade cycle, which should accelerate in the fourth quarter. Emulex’s acquisition of ServerEngines (expensive but necessary) is expected to be finalized at the end of this month.
QLOGIC (NASDAQ: QLGC)
The numbers: For the three months ended June 27, QLogic earned $25.4 million, up 70% percent from $15 million in the same period a year earlier. Revenue rose 16% to $142.6 million, vs. $122.8 million a year ago. Analysts were expecting $144.1 million in revenue.
Highlights: Wall Street can be cruel to companies that have a lock on their primary markets, such as QLogic and Emulex in the Fibre Channel HBA space, because of consistently high expectations: Although QLogic’s numbers were quite good, its stock price took a hit on the day of its quarterly earnings announcement, dropping 14% at one point.
Interesting tidbit: The company had $10 million in revenue “from products serving host applications for the fast-growing converged network [FCoE] market.”
Comments: Although QLogic’s future success does in fact depend on its performance in the FCoE/CEE/DCB space, it’s too early to factor FCoE performance into QLogic’s stock performance. Next year will be The Year of FCoE reckoning, as the QLogic-Emulex-Brocade-Broadcom-Intel battle reaches war status.
COMMVAULT (NASDAQ: CVLT)
The numbers: Revenues for CommVault’s first fiscal quarter were $66.3 million, an increase of 10% over Q1 2010 and a decrease of 10% vs. the previous quarter. Net income was $3.5 million, up $1.1 million vs. the same period a year ago.
Highlights: Dell accounted for about 26% of CommVault’s revenue, up 21% year-over-year.
Comments: Some observers predicted that Dell’s recent acquisition of Ocarina Networks (see “Dell to acquire Ocarina for data deduplication”) spelled trouble for CommVault. That assumed that Dell was headed toward a one-size-fits-all approach to data deduplication. I don’t think so. Dell will probably continue with its existing dedupe-related reseller deals (CommVault, Symantec, EMC Data Domain) while leveraging the Ocarina technology in specific markets (e.g., primary storage optimization in image-intensive environments).
One good reason to stick with CommVault’s stock is the upcoming release of Simpana 9, which I understand will include some significant improvements in the areas of deduplication and virtualization.
SYMANTEC (NASDAQ: SYMC)
The numbers: Symantec reported revenue of $1.433 billion in its first fiscal quarter, essentially unchanged from $1.432 billion in last year’s Q1. But the earnings picture was brighter. The company reported net income of $161 million, compared to $74 million in Q1 2009.
Highlights: Revenue for Symantec’s largest business segment – storage and server management – fell 5% year-over-year to $524 million.
Comments: Symantec’s storage revenues should pick up in the next few quarters due to a ramp in sales of its Backup Express 10 and NetBackup 7 software (both of which were introduced early this year) and a new version of Enterprise Vault this quarter.
3PAR (NYSE: PAR)
The numbers: 3PAR’s quarterly revenues were $54.3 million, an increase of 22% vs. $44.5 million in the same period a year ago. GAAP net loss was $1.8 million, virtually identical to the company’s loss in the year earlier quarter.
Highlights: 3PAR president and CEO David Scott emphasized the company’s strengths in “multi-tenant clustering, thin technologies, and autonomic management,” all of which play well in the cloud.
Comments: Not as impressive as Isilon’s quarterly report, but companies such as 3PAR, Isilon and Compellent (see below) are proving that upstarts can put a dent in the armor of the market share leaders by leveraging truly differentiated technology, at least for awhile.
COMPELLENT (NYSE: CML)
The numbers: In its second fiscal quarter ended June 30, Compellent posted record revenue of $36.5 million, a 27% increase over the same quarter in 2009 and a 15% increase over the first quarter of 2010. GAAP net loss was $172,000, and non-GAAP net income was $1.5 million.
Highlights: Compellent claims an installed base of 2,124 customers, an increase of 182 customers vs. the previous quarter. Cash and investments totaled $132 million.
Comments: Compellent’s data movement/tiering/management technology, dubbed Fluid Data, appears to be a primary catalyst behind Compellent’s growth. Pipar Jeffray analysts noted that key risks for Compellent include “reliance on channel partners, limited international exposure, well-capitalized competitors and a challenging macro-economic backdrop.”
STEC (NASDAQ: STEC)
The numbers: Solid-state disk (SSD) specialist STEC posted revenue of $61.3 million in the second quarter. That’s a decrease of 29.1% from the second quarter of 2009, but an increase of 58% from the first quarter of 2010.
Highlights: STEC bounced back from a disappointing first quarter, posting non-GAAP gross profit margin of 42.7% vs. 34.2% in the first quarter, having resolved inventory carryover issues with its largest customer (EMC). For the next quarter, company officials are predicting revenue in the $78 million to $80 million range, indicating a continued resurgence.
Comments: STEC stock has been on a roller-coaster ride, with its 52-week price ranging from $9.47 to $42.50 a share. The company has an early lead in the enterprise SSD market, with design wins at most of the leading disk array vendors. And STEC is still the single source for SSDs at most of its customers. STEC recently introduced MLC SSDs, augmenting its SLC-based SSD product line with lower-cost alternatives. (See “MLC vs. SLC flash for enterprise SSD” on infostor.com.) And the next generation of STEC’s Zeus and Mach SSDs are due later this year, reportedly with 2X the capacity.
HITACHI DATA SYSTEMS (HDS)
Hitachi Ltd. recently reported its Q1FY10 financial results. The company’s HDS operation is not publicly traded, but here’s a recap of HDS’ results. NOTE: The following is excerpted from a report by Aaron C. Rakers, managing director at Stifel Nicolaus.
The numbers: “Consolidated revenues (revenues from HDS + revenues of storage systems sales in Japan) for the first quarter fiscal year 2010 were $804 million, up 13% year on year. This was HDS’ third consecutive record quarter. The first quarter, which ended June 30, was the best Q1 in HDS history, beating the company’s previous best first quarter by $100 million.”
Highlights: Year-over-year revenues grew across all geographies: Americas (+27%), EMEA (+4%), APAC (+19%, excluding Japan domestic sales).
Comments (from Aaron Rakers): “HDS’ Q1FY10 results continue to show increased diversity between hardware, software and services, with solid growth across all areas. Fueled by strong AMS systems sales and increased USP V/VM platform adoption, the company’s hardware revenue was up double digits from Q1FY09. Likewise, software and services revenues grew double digits year-over-year and now account for nearly half of HDS’ total revenue, which is a higher percentage compared to the previous year. The increase in software and services revenue was attributed to increased traction in virtualization software such as Hitachi Dynamic Provisioning. HDS’ file and content portfolio, which includes the Hitachi High-performance NAS Platform and Hitachi Content Platform products, also showed strong year-on-year growth; in fact, the file and content portfolio recorded a 200% increase in FY2009 compared to FY2008.”
Related articles:
EMC breaks Q2 revenue record (blog post, July 21)
NetApp wows Wall Street, doubles quarterly profits (news story, May 26)
Tuesday, March 2, 2010
FCoE CNAs: HP/IBM tap Emulex, Cisco taps QLogic
March 2, 2010 – For quite some time, archrival QLogic has had bragging rights in the market for converged network adapters (CNAs) that support FCoE, iSCSI and 10GbE, but Emulex is now able to ante up with recently announced OEM design wins from HP and IBM. But QLogic still has the edge in the number of design wins.
On Friday, Emulex announced that its OneConnect Universal Converged Network Adapters (UCNAs) with support for 10GbE and FCoE have been certified by HP for use in select ProLiant rack, tower and blade servers. Support for iSCSI is expected in the second half of the year.
It’s important to note that HP will brand the Emulex adapters. In typical HP fashion, the three adapters will be succinctly dubbed the HP NC550SFP Dual Port 10Gb/s Server Adapter; the HP StorageWorks CN1000E Dual Port CNA (for ProLiant rack and tower servers); and the HP NC550 Dual Port Flex-10 10Gb/s Ethernet Adapter (for ProLiant blade servers).
Emulex’s OneConnect CNAs have full hardware offload for TCP/IP, FCoE and iSCSI, and users can start with a 10GbE NIC and add support for FCoE and/or iSCSI when/if they need it.
Today, Emulex announced a significant expansion of its OEM agreement with IBM. Big Blue will offer Emulex’s 10GbE NICs (upgradable to support FCoE and iSCSI) across eight IBM server lines, including the recently announced eX5 line and three BladeCenter families. Emulex already had an OEM design win with IBM for its Virtual Fabric Adapters. (QLogic's 8100 series CNAs are also supported on IBM's System x and BladeCenter platforms, for both 10GbE and FCoE connectivity.)
Also today, however, QLogic announced that Cisco has certified its 8100 series FCoE CNAs with the Unified Computing System (UCS) platform. Cisco has also certified QLogic’s CNAs for use with the Nexus 5000 series of switches.
If I were QLogic, from a marketing perspective I would continue to crow about my lead in OEM design wins. (In addition to Cisco, QLogic has FCoE CNA design wins with EMC, IBM and NetApp, as well as a number of second tier storage vendors.) But from a competitive perspective, it really doesn’t matter at this stage of the game.
It’s safe to assume that virtually all of the leading vendors will eventually qualify CNAs from both Emulex and QLogic. It’s also likely that OEMs will qualify CNAs from other vendors, such as Broadcom and Intel.
The good thing here is that users will have a wide variety of CNAs to choose from – unlike in the Fibre Channel HBA market, where it boils down to the Emulex-QLogic duopoly followed in a distant third place by Brocade.
Users will be able to choose based on price, performance, and support/performance for whatever protocols they’re using – 10GbE, FCoE and/or iSCSI.
Meanwhile, Emulex and QLogic may be headed for a court date. See "QLogic sues Emulex, but not over technology."
On Friday, Emulex announced that its OneConnect Universal Converged Network Adapters (UCNAs) with support for 10GbE and FCoE have been certified by HP for use in select ProLiant rack, tower and blade servers. Support for iSCSI is expected in the second half of the year.
It’s important to note that HP will brand the Emulex adapters. In typical HP fashion, the three adapters will be succinctly dubbed the HP NC550SFP Dual Port 10Gb/s Server Adapter; the HP StorageWorks CN1000E Dual Port CNA (for ProLiant rack and tower servers); and the HP NC550 Dual Port Flex-10 10Gb/s Ethernet Adapter (for ProLiant blade servers).
Emulex’s OneConnect CNAs have full hardware offload for TCP/IP, FCoE and iSCSI, and users can start with a 10GbE NIC and add support for FCoE and/or iSCSI when/if they need it.
Today, Emulex announced a significant expansion of its OEM agreement with IBM. Big Blue will offer Emulex’s 10GbE NICs (upgradable to support FCoE and iSCSI) across eight IBM server lines, including the recently announced eX5 line and three BladeCenter families. Emulex already had an OEM design win with IBM for its Virtual Fabric Adapters. (QLogic's 8100 series CNAs are also supported on IBM's System x and BladeCenter platforms, for both 10GbE and FCoE connectivity.)
Also today, however, QLogic announced that Cisco has certified its 8100 series FCoE CNAs with the Unified Computing System (UCS) platform. Cisco has also certified QLogic’s CNAs for use with the Nexus 5000 series of switches.
If I were QLogic, from a marketing perspective I would continue to crow about my lead in OEM design wins. (In addition to Cisco, QLogic has FCoE CNA design wins with EMC, IBM and NetApp, as well as a number of second tier storage vendors.) But from a competitive perspective, it really doesn’t matter at this stage of the game.
It’s safe to assume that virtually all of the leading vendors will eventually qualify CNAs from both Emulex and QLogic. It’s also likely that OEMs will qualify CNAs from other vendors, such as Broadcom and Intel.
The good thing here is that users will have a wide variety of CNAs to choose from – unlike in the Fibre Channel HBA market, where it boils down to the Emulex-QLogic duopoly followed in a distant third place by Brocade.
Users will be able to choose based on price, performance, and support/performance for whatever protocols they’re using – 10GbE, FCoE and/or iSCSI.
Meanwhile, Emulex and QLogic may be headed for a court date. See "QLogic sues Emulex, but not over technology."
Tuesday, February 16, 2010
QLogic sues Emulex, but not over technology
February 16, 2010 – The two Orange County, CA archrivals are at it again. QLogic has filed a lawsuit against Emulex, claiming false advertising, unfair competition and trade libel relating to a blog post, a video posted on YouTube, and public statements made by Emulex.
I debated long and hard about blogging about this but, hey, it’s a storage story (and a good one) and thanks to TheStreet.com it’s public knowledge.
James Rogers, a writer for TheStreet.com, broke the story. See “QLogic Sues Emulex Over Ads.”
According to QLogic’s complaint filed in the Superior Court of California, County of Orange, an Emulex executive allegedly made false comments when he stated in a public conference call:
“First, we have the only . . . CNA design wins in the market that are being used to service both the Ethernet NIC requirements, as well as the storage networking needs of the OEMs. Other competitors that are shipping FCoE CNAs are only able to address the storage connectivity requirements, because they lack a complete certified and hardened Ethernet stack to support demanding server requirements.”
According to QLogic’s complaint, “These statements were untrue and the defendants knew they were untrue.” The complaint goes on to claim that QLogic’s 8100 series of CNAs do in fact have a “complete certified and hardened Ethernet stack to support demanding server requirements” and that the CNAs have been qualified by a variety of IBM divisions, as well as Dell. [They’ve also been qualified by Cisco, EMC, NetApp and other OEMs.]
QLogic’s complaint also states that Emulex’s video “purporting to show an egg frying on a QLogic semiconductor chip is intentionally misleading and intended to deceive potential customers of QLogic products.”
In partial summary, the complaint states: “Defendants advertising and public proclamations were untrue or misleading, and likely to deceive the public in that: (i) they falsely state that QLogic’s products are not able to address both the Ethernet NIC requirements and the storage networking requirements of potential customers; and (ii) they falsely suggest that QLogic’s products create a greater potential for datacenter failure than Emulex’s products [due to heat issues].”
I’m not taking sides here, but it would appear as though QLogic has a legitimate complaint. If its CNAs could not fully support network and storage traffic, and/or had any serious liabilities on the heat side (as alleged in Emulex’s video), I doubt that those CNAs would have been certified by virtually all of the leading storage/server OEMs. After all, Cisco, Dell, EMC, IBM, NetApp, etc. aren’t exactly slouches when it comes to testing and certifying products.
Instead of putting out a disingenuous (albeit humorous) video and making what seem to be false, or at least misleading, public statements, Emulex should have leaned on whatever verifiable facts it has to make its competitive case.
This certainly isn’t the first time these two companies (which used to be the same company) have gone after each other, and it certainly won’t be the last as the CNA battles heat up and the war for dominance in the converged data center becomes fully engaged.
Related blog post:
FCoE CNAs: The battle lines are being drawn
For an interesting comparison of the QLogic and Emulex CNAs (which I don’t necessarily agree with), see “Deep Dive: Assessing Virtual CNAs for 2010 Installation,” by Wikibon.org member David Floyer.
I debated long and hard about blogging about this but, hey, it’s a storage story (and a good one) and thanks to TheStreet.com it’s public knowledge.
James Rogers, a writer for TheStreet.com, broke the story. See “QLogic Sues Emulex Over Ads.”
According to QLogic’s complaint filed in the Superior Court of California, County of Orange, an Emulex executive allegedly made false comments when he stated in a public conference call:
“First, we have the only . . . CNA design wins in the market that are being used to service both the Ethernet NIC requirements, as well as the storage networking needs of the OEMs. Other competitors that are shipping FCoE CNAs are only able to address the storage connectivity requirements, because they lack a complete certified and hardened Ethernet stack to support demanding server requirements.”
According to QLogic’s complaint, “These statements were untrue and the defendants knew they were untrue.” The complaint goes on to claim that QLogic’s 8100 series of CNAs do in fact have a “complete certified and hardened Ethernet stack to support demanding server requirements” and that the CNAs have been qualified by a variety of IBM divisions, as well as Dell. [They’ve also been qualified by Cisco, EMC, NetApp and other OEMs.]
QLogic’s complaint also states that Emulex’s video “purporting to show an egg frying on a QLogic semiconductor chip is intentionally misleading and intended to deceive potential customers of QLogic products.”
In partial summary, the complaint states: “Defendants advertising and public proclamations were untrue or misleading, and likely to deceive the public in that: (i) they falsely state that QLogic’s products are not able to address both the Ethernet NIC requirements and the storage networking requirements of potential customers; and (ii) they falsely suggest that QLogic’s products create a greater potential for datacenter failure than Emulex’s products [due to heat issues].”
I’m not taking sides here, but it would appear as though QLogic has a legitimate complaint. If its CNAs could not fully support network and storage traffic, and/or had any serious liabilities on the heat side (as alleged in Emulex’s video), I doubt that those CNAs would have been certified by virtually all of the leading storage/server OEMs. After all, Cisco, Dell, EMC, IBM, NetApp, etc. aren’t exactly slouches when it comes to testing and certifying products.
Instead of putting out a disingenuous (albeit humorous) video and making what seem to be false, or at least misleading, public statements, Emulex should have leaned on whatever verifiable facts it has to make its competitive case.
This certainly isn’t the first time these two companies (which used to be the same company) have gone after each other, and it certainly won’t be the last as the CNA battles heat up and the war for dominance in the converged data center becomes fully engaged.
Related blog post:
FCoE CNAs: The battle lines are being drawn
For an interesting comparison of the QLogic and Emulex CNAs (which I don’t necessarily agree with), see “Deep Dive: Assessing Virtual CNAs for 2010 Installation,” by Wikibon.org member David Floyer.
Monday, November 16, 2009
Emulex, QLogic jockey for position
November 16, 2009 – The Dell’Oro Group market research firm recently released its Q3 2009 SAN Report, which includes market share figures for SAN product categories such as Fibre Channel HBAs and converged network adapters (CNAs) based on the Fibre Channel over Ethernet (FCoE) standard.
As they always do, Emulex and QLogic almost immediately released press releases claiming market share gains and/or leadership. Nice piece of PR one-upmanship. In each case, the companies just emphasize the slice of those markets that they happen to have good news about.
For example, Emulex reported that it is the leader in FCoE CNAs, according to the Dell’Oro report, with revenue growth of 160% over the previous quarter. The company also highlighted the fact that it gained 4% market share in the 8Gbps Fibre Channel HBA market.
QLogic reported that it’s the leader in the overall (4Gbps and 8Gbps) Fibre Channel HBA market, with a 54.4% share in Q3. The company boosted its lead over Emulex by 1.9%, for a lead margin of 17.9%. In addition, according to the press release:
“On the 8Gb Fibre Channel adapter front, QLogic increased its revenue share by 3.6 percentage points compared to the previous quarter, increasing its revenue share lead to 56.6 percent for Q3. In the category of 8Gb Fibre Channel mezzanine cards, QLogic continued to dominate with 78 percent of revenue share for Q3 compared to the nearest competitor's 22 percent share. In the broader category of all mezzanine adapters (4Gb and 8Gb), QLogic increased revenue share by 1.6 percentage points to 72.4 percent and held a 44.8 percentage point lead for the quarter.”
On the FCoE CNA front, these two rivals had better ramp revenues, shipments and market share, because in the first half of next year NIC giants Broadcom and Intel will put both feet in the FCoE market and this will no longer be a Storage Vendors Only skirmish.
An Industry Brief released by IT Brand Pulse notes that CNA port volume shipments increased 133% in Q3, to a total of 9,800 ports, and revenue increased 148% to about $4 million.
In a blog post on FCoE CNAs, IT Brand Pulse CEO and senior analyst Frank Berry says that, “We could see a quantum increase in CNA volume very quickly if Broadcom and Intel position their 10Gb CNAs to displace some or all of the 10Gb NICs they have been shipping for years and that are now ramping at over 50% per quarter.”
For more of Frank’s opinions on the CNA market, see “Radar Picks Up CNA Growth In Q3.”
As they always do, Emulex and QLogic almost immediately released press releases claiming market share gains and/or leadership. Nice piece of PR one-upmanship. In each case, the companies just emphasize the slice of those markets that they happen to have good news about.
For example, Emulex reported that it is the leader in FCoE CNAs, according to the Dell’Oro report, with revenue growth of 160% over the previous quarter. The company also highlighted the fact that it gained 4% market share in the 8Gbps Fibre Channel HBA market.
QLogic reported that it’s the leader in the overall (4Gbps and 8Gbps) Fibre Channel HBA market, with a 54.4% share in Q3. The company boosted its lead over Emulex by 1.9%, for a lead margin of 17.9%. In addition, according to the press release:
“On the 8Gb Fibre Channel adapter front, QLogic increased its revenue share by 3.6 percentage points compared to the previous quarter, increasing its revenue share lead to 56.6 percent for Q3. In the category of 8Gb Fibre Channel mezzanine cards, QLogic continued to dominate with 78 percent of revenue share for Q3 compared to the nearest competitor's 22 percent share. In the broader category of all mezzanine adapters (4Gb and 8Gb), QLogic increased revenue share by 1.6 percentage points to 72.4 percent and held a 44.8 percentage point lead for the quarter.”
On the FCoE CNA front, these two rivals had better ramp revenues, shipments and market share, because in the first half of next year NIC giants Broadcom and Intel will put both feet in the FCoE market and this will no longer be a Storage Vendors Only skirmish.
An Industry Brief released by IT Brand Pulse notes that CNA port volume shipments increased 133% in Q3, to a total of 9,800 ports, and revenue increased 148% to about $4 million.
In a blog post on FCoE CNAs, IT Brand Pulse CEO and senior analyst Frank Berry says that, “We could see a quantum increase in CNA volume very quickly if Broadcom and Intel position their 10Gb CNAs to displace some or all of the 10Gb NICs they have been shipping for years and that are now ramping at over 50% per quarter.”
For more of Frank’s opinions on the CNA market, see “Radar Picks Up CNA Growth In Q3.”
Friday, August 14, 2009
Emulex vs. QLogic: Who's on first?
August 14, 2009 – The Dell’Oro Group market research firm recently released market figures for SANs, including Fibre Channel HBAs. Both Emulex and QLogic immediately put out positive press releases, both claiming market share gains.
Emulex’s release
QLogic’s release
How can these arch rivals both have gained market share? Through the miracle of spin. It depends on how you slice and dice the numbers. For the record, here are the results direct from the Dell’Oro Group:
Share Mfg Revenue (%)
SAN HBAs - Worldwide Fibre Channel Total
2Q08 1Q09 2Q09
Emulex 37.6% 37.2% 38.2%
QLogic 53.7% 56.2% 54.2%
(The “rest” of the HBA market includes vendors such as Apple, Atto, Brocade and LSI.)
I’m betting that this one-upmanship spin will get way out of control when research firms start tracking the market for FCoE-based converged network adapters (CNAs).
Emulex’s release
QLogic’s release
How can these arch rivals both have gained market share? Through the miracle of spin. It depends on how you slice and dice the numbers. For the record, here are the results direct from the Dell’Oro Group:
Share Mfg Revenue (%)
SAN HBAs - Worldwide Fibre Channel Total
2Q08 1Q09 2Q09
Emulex 37.6% 37.2% 38.2%
QLogic 53.7% 56.2% 54.2%
(The “rest” of the HBA market includes vendors such as Apple, Atto, Brocade and LSI.)
I’m betting that this one-upmanship spin will get way out of control when research firms start tracking the market for FCoE-based converged network adapters (CNAs).
Monday, June 1, 2009
FCoE: The battle lines are being drawn
June 1, 2009 – From an end-user perspective, the battle for the brains (switches and adapters) of next-generation converged networks probably won’t heat up until at least next year. But from the vendor side of the fight, the battle lines are being drawn today.
In a storage-myopic view (which I’m usually guilty of), this could appear to be a battle between storage stalwarts such as Emulex, QLogic, Brocade and Cisco. Obviously, these vendors have an advantage on the Fibre Channel side of the equation. But if Fibre Channel over Ethernet (FCoE) prevails, the converged network of the future will be just as much, or more, of an Ethernet play.
In addition to younger companies that specialize in 10Gbps Ethernet (10GbE) adapters and are fervently working on FCoE – such as Chelsio and Neterion – keep your eye on the leaders in the Ethernet (including 10GbE) adapter market – Intel and Broadcom.
Which brings me to the latest turn of the screw in the Broadcom-Emulex acquisition saga.
I’ve blogged previously about this hostile takeover bid. See
Broadcom makes hostile bid for Emulex
Emulex to Broadcom: “Take a hike”
Most recently, Broadcom took its offer beyond the Emulex board, straight to the shareholders. In response, Emulex sent a letter to its stockholders urging them not to tender their shares, and not to consent to Broadcom’s related solicitation, which aims to ultimately remove Emulex’s entire board of directors and appoint in its place nominees hand-picked by Broadcom.
Until this acquisition clears up, or a white knight rides in, it may be too early to handicap the players in the FCoE space. But who do you think will prevail? If you don’t want to respond below, shoot me an email at daves@pennwell.com.
In a storage-myopic view (which I’m usually guilty of), this could appear to be a battle between storage stalwarts such as Emulex, QLogic, Brocade and Cisco. Obviously, these vendors have an advantage on the Fibre Channel side of the equation. But if Fibre Channel over Ethernet (FCoE) prevails, the converged network of the future will be just as much, or more, of an Ethernet play.
In addition to younger companies that specialize in 10Gbps Ethernet (10GbE) adapters and are fervently working on FCoE – such as Chelsio and Neterion – keep your eye on the leaders in the Ethernet (including 10GbE) adapter market – Intel and Broadcom.
Which brings me to the latest turn of the screw in the Broadcom-Emulex acquisition saga.
I’ve blogged previously about this hostile takeover bid. See
Broadcom makes hostile bid for Emulex
Emulex to Broadcom: “Take a hike”
Most recently, Broadcom took its offer beyond the Emulex board, straight to the shareholders. In response, Emulex sent a letter to its stockholders urging them not to tender their shares, and not to consent to Broadcom’s related solicitation, which aims to ultimately remove Emulex’s entire board of directors and appoint in its place nominees hand-picked by Broadcom.
Until this acquisition clears up, or a white knight rides in, it may be too early to handicap the players in the FCoE space. But who do you think will prevail? If you don’t want to respond below, shoot me an email at daves@pennwell.com.
Tuesday, April 21, 2009
Broadcom makes hostile bid for Emulex
April 21, 2009 -- Although overshadowed by the Oracle-Sun acquisition, things got hot in The OC today with Broadcom’s $764 million bid for fellow Orange County, CA resident Emulex.
Actually, this isn’t new. Broadcom approached Emulex in late December with an acquisition offer. Emulex told them to take a hike and subsequently, in January, concocted a poison pill and amended its bylaws (which subsequently led to Broadcom filing a lawsuit) to thwart Broadcom’s overture. What’s new is that Broadcom is taking its case public, or least to Emulex shareholders.
I have no idea if Broadcom will be successful in this bid. I suppose it depends on how Emulex execs and shareholders see the company’s future in the context of competition with QLogic and Brocade on the HBA and FCoE CNA battlefields. Is QLogic ahead of Emulex on the FCoE front? Can Brocade upset the Emulex-QLogic duopoly on the HBA front? If the answer to either of those questions is ‘yes,’ then now may be the time for a sale. And the price -- $9.25 per share -- seems to be sweet: about a 40% premium over yesterday’s share price of Emulex stock.
Obviously, Broadcom wants Emulex primarily for its Fibre Channel expertise and technology; more specifically, perhaps, its FCoE technology as Broadcom moves into the so-called converged networking space (Ethernet + Fibre Channel). As such, Broadcom is probably also eyeing QLogic. And it’s possible that the deal could turn as rapidly as the IBM-Sun to Oracle-Sun deal.
It’s also possible that Emulex could find a white knight or, more likely, push the acquisition price closer to the $1 billion mark.
If the Broadcom-Emulex deal does go through (financial analyst speculation is running about 50-50), it would have repercussions and a ripple effect across the storage industry, and would lead to more acquisition speculation. QLogic would be in play (with Brocade as a possible suitor, or maybe Cisco). Maybe even Brocade would be in play.
Given the Oracle-Sun acquisition, anything can happen.
Related articles:
QLogic delivers single-chip CNAs
Emulex CNAs support 10GbE, iSCSI, FCoE
Brocade launches FCoE switch, adapters
Actually, this isn’t new. Broadcom approached Emulex in late December with an acquisition offer. Emulex told them to take a hike and subsequently, in January, concocted a poison pill and amended its bylaws (which subsequently led to Broadcom filing a lawsuit) to thwart Broadcom’s overture. What’s new is that Broadcom is taking its case public, or least to Emulex shareholders.
I have no idea if Broadcom will be successful in this bid. I suppose it depends on how Emulex execs and shareholders see the company’s future in the context of competition with QLogic and Brocade on the HBA and FCoE CNA battlefields. Is QLogic ahead of Emulex on the FCoE front? Can Brocade upset the Emulex-QLogic duopoly on the HBA front? If the answer to either of those questions is ‘yes,’ then now may be the time for a sale. And the price -- $9.25 per share -- seems to be sweet: about a 40% premium over yesterday’s share price of Emulex stock.
Obviously, Broadcom wants Emulex primarily for its Fibre Channel expertise and technology; more specifically, perhaps, its FCoE technology as Broadcom moves into the so-called converged networking space (Ethernet + Fibre Channel). As such, Broadcom is probably also eyeing QLogic. And it’s possible that the deal could turn as rapidly as the IBM-Sun to Oracle-Sun deal.
It’s also possible that Emulex could find a white knight or, more likely, push the acquisition price closer to the $1 billion mark.
If the Broadcom-Emulex deal does go through (financial analyst speculation is running about 50-50), it would have repercussions and a ripple effect across the storage industry, and would lead to more acquisition speculation. QLogic would be in play (with Brocade as a possible suitor, or maybe Cisco). Maybe even Brocade would be in play.
Given the Oracle-Sun acquisition, anything can happen.
Related articles:
QLogic delivers single-chip CNAs
Emulex CNAs support 10GbE, iSCSI, FCoE
Brocade launches FCoE switch, adapters
Wednesday, April 8, 2009
FCoE FUD
April 8, 2009 – At the only press conference at this week’s Storage Networking World confab, Brocade tossed its hat into the FCoE ring with the announcement of a switch and converged network adapters (CNAs). See “Brocade launches FCoE switch, adapters.”
That announcement seemingly officially kicked off the FCoE battles between Cisco and Brocade on the switch front, and Emulex, QLogic and Brocade on the CNA front. (As storage bigots, we’re ignoring the traditional NIC and switch vendors which may, or may not, eventually be contenders in the FCoE ring.)
Brocade’s CNA announcement came on the heels of similar announcements from Emulex and QLogic:
“QLogic delivers single-chip CNAs”
“Emulex CNAs support 10GbE, iSCSI, FCoE”
Upon each announcement, competitors offered their services in bad-mouthing their rivals. Since most of the claims and counterclaims are at this point are impossible to verify, we chose a Joe Friday approach to reporting the announcements – “Just the facts, ma’am.”
The FCoE battles may have begun in the OEM qualification arena (raising the question of how many CNAs or switches the big server/storage vendors will qualify/resell), but the real battles won’t begin until end-user adoption of FCoE begins. At yesterday’s press conference, Brocade CTO Dave Stevens predicted that we won’t see end-user adoption of FCoE in any volume until late 2010 (about the same time that 16Gbps Fibre Channel products are supposed to appear). And that might be optimistic.
That announcement seemingly officially kicked off the FCoE battles between Cisco and Brocade on the switch front, and Emulex, QLogic and Brocade on the CNA front. (As storage bigots, we’re ignoring the traditional NIC and switch vendors which may, or may not, eventually be contenders in the FCoE ring.)
Brocade’s CNA announcement came on the heels of similar announcements from Emulex and QLogic:
“QLogic delivers single-chip CNAs”
“Emulex CNAs support 10GbE, iSCSI, FCoE”
Upon each announcement, competitors offered their services in bad-mouthing their rivals. Since most of the claims and counterclaims are at this point are impossible to verify, we chose a Joe Friday approach to reporting the announcements – “Just the facts, ma’am.”
The FCoE battles may have begun in the OEM qualification arena (raising the question of how many CNAs or switches the big server/storage vendors will qualify/resell), but the real battles won’t begin until end-user adoption of FCoE begins. At yesterday’s press conference, Brocade CTO Dave Stevens predicted that we won’t see end-user adoption of FCoE in any volume until late 2010 (about the same time that 16Gbps Fibre Channel products are supposed to appear). And that might be optimistic.
Tuesday, March 24, 2009
Cisco's UCS: Winners and losers
March 24, 2009 – Cisco’s recent announcement of its Unified Computing System (UCS) blade server promises to upset the apple cart in the server market, with a number of potential winners and losers. For InfoStor senior editor Kevin Komiega’s coverage of the announcement, click here
Assuming that Cisco is successful with the UCS (and eventually it will be, although it will probably take a long time), the potential losers are the existing server giants, such as HP and Dell (both of which derive about 10% of their overall revenues from the enterprise server market), IBM and Sun. (I won’t get into the IBM-Sun controversy because I have nothing to add to the rumors.)
The biggest winner in this announcement is VMware, but there could also be some winners on the storage side – most notably Cisco partners EMC and NetApp, but vendors such as Emulex and QLogic also signed on as UCS supporters and could get a nice coattails ride if Cisco succeeds (based largely on their dominant HBA market shares but also because of their expertise in virtual server environments).
Cisco (wisely) decided not to tackle storage on its own, but as the networking giant continues to extend well beyond its traditional roots it seems like it’s only a matter of time before the company jumps squarely into the storage fray – either on its own or via a game-changing acquisition.
Assuming that Cisco is successful with the UCS (and eventually it will be, although it will probably take a long time), the potential losers are the existing server giants, such as HP and Dell (both of which derive about 10% of their overall revenues from the enterprise server market), IBM and Sun. (I won’t get into the IBM-Sun controversy because I have nothing to add to the rumors.)
The biggest winner in this announcement is VMware, but there could also be some winners on the storage side – most notably Cisco partners EMC and NetApp, but vendors such as Emulex and QLogic also signed on as UCS supporters and could get a nice coattails ride if Cisco succeeds (based largely on their dominant HBA market shares but also because of their expertise in virtual server environments).
Cisco (wisely) decided not to tackle storage on its own, but as the networking giant continues to extend well beyond its traditional roots it seems like it’s only a matter of time before the company jumps squarely into the storage fray – either on its own or via a game-changing acquisition.
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