Emulex Gains Market Share on QLogic ...

Our comments :

When you think about FC HBAs, you can think immediately about two names, Emulex and QLogic.

It was historically a long battle between them in this market. Emulex was born in 1979 and QLogic in 1994 after being spun off by Emulex. They were and are the kings of 1, 2, 4 and now 8Gb FC HBAs, with no real big competitors. These products always were very - too - expensive and their competition strangely was not a factor for lower prices. There is not a great difference in technology between SCSI and FC HBAs but an enormous one in term of prices. Consequently the two firms amassed huge profits. Other firms entered in this market like Agilent, Atto, Brocade and LSI, but there is no way to stop the two leaders with more than 90% of the market together.

They both have all the big storage OEMs in their portfolio, and generally the same ones as these customers like to have a second source.

QLogic's original business was disk controllers, a business sold to Marvell in 2005. QLogic sold its AdaptiveRAID, an optimized algorithm for RAIDs, to Yotta Yotta in 2001, and its PathScale compiler for Linux systems to SiCortex in 2007.

Both of them invested also in switches and more recently FCoE CNAs as they project that 10GbE has greater future than FC. Only QLogic also entered into IB.

In 2009, Broadcom tried to acquire Emulex for $764 million but Emulex's board of directors refused this hostile bid.

Emulex was always smaller than QLogic in term of revenues since at least 1998.

Current chairman of QLogic H.K. Desai had one of the the longest position of CEO in one storage company, from 1996 until 2010 when he was finally replaced by Simon Biddiscombe. Jim McCluney is CEO of Emulex since 2006.

                              Acquisitions of QLogic

                     
                             Acquisitions of Emulex

  * Prices in $ millions