In 2001, Emulex (EXL) commanded 80% of the $25 million Fibre Channel Host Bus Adapter market. QLogic (QLGC) unveiled the industry’s first single chip HBA in 2002, and leveraged their 2-year technology lead into market share gains over Emulex in each of the following 8 years. Emulex battled back starting in 2008, when the company regained share in various quarters, but still lost ground for the full years 2008 and 2009. Emulex momentum continued through 2010 when, for the first time since the industry started counting Fibre Channel HBAs, Emulex gained market share over QLogic for an entire year.
According to data excerpted from the IT Brand Pulse Q42010 Network Adapter Report
, Emulex gained Fibre Channel HBA share in the last three quarters of 2010, and 2.3% for the entire year, to finish with 38.6% market share. IT Brand Pulse estimates that QLogic lost 1.5% of share in 2010, but still finished the year as the leader with 54.3% market share.
In 2002, QLogic pulled ahead with single-chip HBAs, which were less expensive to OEMs, and the only solutions small enough to fit on blade server mezzanine cards. Server OEMs responded by offering more profitable QLogic HBAs across a broad spectrum of hardware and operating system platforms.
In 2009, Emulex gained the upper-hand with the only converged network adapter offering the combination of solid LAN functionality -- that serves 90% of the network requirements in the data center -- plus iSCSI and FCoE offload. By 2010, IBM (IBM
) and HP (HPQ
) integrated Emulex chips and adapters into their virtual networking schemes, and began leading with Emulex-based adapter solutions.
QLogic just introduced new chip technology and OEM designs wins for adapters based on the new chip. In 2011, the battle to watch is at HP where Emulex starts the year as the incumbent 10GbE LOM vendor for HP servers, and QLogic starts as the dominant Fibre Channel adapter vendor. Emulex will attempt to convince customers to purchase the same converged networking adapters as their LOM chips, while QLogic will attempt to leverage their strength in Fibre Channel adapters.
The bottom line is this: Emulex has better NIC functionality, and many IT professionals prefer to use the same brand of LOM chips and NICs because it eliminates existing or potential interoperability problems. If Emulex exploits this advantage, their momentum will continue.