New Flash Entrants Validate QLogic Game Plan

| About: QLogic Corporation (QLGC)

In an article last November, I wrote that products based on Mt. Rainier technology are a legitimate contender for QLogic (NASDAQ:QLGC) growth engine of the future. I proposed that if Mt. Rainier uniquely allows IT organizations to share expensive SSD resources across servers, OEMs will fill the PCIe SSD adapter piece of their SSD portfolio with another product from their trusted supplier, QLogic. The innovative and useful shared PCIe SSD caching capability of Mt. Rainier gives QLogic a chance to disrupt the momentum of incumbent leaders, and grab significant PCIe cache SSD market share.

A lot has happened since then. QLogic is nearing general availability of products based on Mt. Rainier technology. And, to my surprise, two competitors just announced products based on the Mt. Rainier class of technology.

On February 21st, start-up PernixData came out of stealth mode with a Flash Virtualization platform which pools PCIe flash resources from different servers. Its management and board are the "Miami Heat" of storage with a roster full of all-stars including Poojan Kumar and Satyam Vaghani from VMware (NYSE:VMW), John Thompson, former CEO of Symantec (NASDAQ:SYMC), and Mark Leslie, former CEO of Veritas Software.

On the same day, Virident, another start-up which was already shipping flash-based products, announced FlashMAX Connect--a software suite to deliver shared server-side flash storage. Equally important, just a few weeks ago Virident announced an agreement with Seagate (NASDAQ:STX) to offer a complete line of flash-based PCIe solutions to Seagate's OEM and distribution partners.

Validation for the QLogic Game Plan

The competition led by several storage all-stars is validating the importance of the Mt. Rainier game plan. Sharing IT resources to increase utilization and availability makes obvious sense and will form the basis of Gen 2.0 server-based SSD.

Server SSD Industry Road Map - Gen 2.o products from QLogic, Virident and PernixData are suited for enterprise-class applications because the flash can be pooled and shared, and because it is high availability.The Teams are Just Warming Up

Gen 2.0 products will start shipping in 2013. Right now the teams are just warming up for the contest later this year to capture OEM design wins and end-user deals.

As QLogic, PernixData and Virident are on the court shooting around, I expect IBM/Texas Memory Systems, Intel (NASDAQ:INTC), LSI (NASDAQ:LSI-OLD), Micron (NASDAQ:MU), and other PCIe SSD suppliers are huddling in the locker room to figure out if they should build, partner or acquire technology before the big Gen 2.0 tournament.

OEMs such as HP (NYSE:HPQ), Dell (NASDAQ:DELL), EMC (EMC) and NetApp (NASDAQ:NTAP) are still scouting the technology and evaluating the capabilities of products available in this year's Gen 2.0 draft.

Gen 2.0 Power Rankings

Given that none of the Gen 2.0 server-based SSD vendors are shipping products yet, it's tough to pick a clear favorite.

All things considered, I still like QLogic as the OEM favorite for Gen 2.0 SSD adapters. It appears the company is ahead of the pack in delivering the new technology and it has a proven track record of delivering enterprise-class SAN adapters.

QLogic investors should thank PernixData, Virident and Seagate for validating the QLogic game plan, and keep on the lookout for OEM design wins later this year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.