Shareholders of QLogic (NASDAQ:QLGC), Emulex (NYSE:ELX) and Brocade (NASDAQ:BRCD) are keenly interested in the industry transition to converged networks, and its effect on revenues from high-margin Fibre Channel products.
On September 28, QLogic extended its Adaptive Convergence Strategy by announcing a new portfolio of products. The strategy and new products represent some important advancements in converged networking, and a new lease on life for Fibre Channel cash cows.
For instance, powering the new QLogic FlexSuite adapters are one chip which consolidates the capabilities of a Fibre Channel Host Bus Adapter and a Converged Network Adapter, functions which used to require two separate chips. Now, one card can be configured as a Fibre Channel HBA or a Converged Network Adapter – an example of what QLogic calls Adaptive Convergence.
The UA5900 Universal Access Point switch from QLogic represent a new class of Top of Rack switch with a set of features and price which uniquely positions the switches to sit at the top of any rack in a data center. Until now, Ethernet switches sat on top of server racks, while Fibre Channel switches sat on top of storage racks. Universal Access Switches support Fibre Channel switching, FCoE switching and Ethernet LAN switching all in one aggressively priced stackable switch. Now, one switch can be configured as a Top-of-Rack switch for a server rack, or a Top-of-Rack switch for a storage rack – another example of Adaptive Convergence.
New QLogic iSR routers are used to bridge servers and storage speaking different languages over a Local Area Network in a data center, or over a Wide Area Network in the Cloud. QLogic iSR routers are especially valuable to IT professionals in large data centers who are continually migrating data from old systems to new systems. With the ability to bridge Fibre Channel, iSCSI, and FCoE servers and storage, an iSR router accelerates and simplifies traditional methods of data migration such as backup and restore.
In each product, support for Fibre Channel SANs is combined with what used to define a converged network device – support for 10Gb Ethernet LANs, FCoE SANs and iSCSI SANs. That means the new definition for a full-featured converged networking adapter, or switch, now includes support for native Fibre Channel.
All of the new QLogic products feature support for 16Gb Fibre Channel, the latest and fastest generation of the SAN technology that has dominated large data centers since 2000. Three years ago I argued that by 2011, FCoE would surpass Fibre Channel as the SAN technology of choice in large enterprises. Today, FCoE has taken hold with early adopters, while 4Gb Fibre Channel and 8Gb Fibre Channel are shipping in approximately equal high volumes. This means the transition from 4Gb to 8Gb still has a few years left, which will be followed by the transition from 8Gb to 16Gb.
Given that 16Gb Fibre Channel will maintain a performance advantage over 10Gb iSCSI and FCoE SANs, QLogic has just added five years to the healthy life of Fibre Channel in large data centers, as well as to the healthy life of its cash cow.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.