Converged networking is not an event. It’s a continuous process that will unfold over many years; seamless to customers, none of its many parts noticeably different from each other, but with the beginning and end very different from each other. Within this continuum are milestones that stand-out because achieving them is required for convergence to succeed. One such milestone is the monumental decision by server vendors to embed a converged networking chip on their motherboards, a.k.a. LAN-on-Motherboard, a.k.a. LOM. LOM decisions are monumental because they signify that customer demand is so pervasive that it makes sense to include the chip on every server instead of adding on modular adapter cards. The decision to put a “chip-down” also indicates the cost of the chip is low enough to be non-disruptive to the total cost of the server. Lastly, it means the size of the chip is small enough, and the power consumption is low enough to be non-disruptive to the overall system design.
To give you an example of how hard it is for a technology to makes its way down on a motherboard, consider 10 gigabit Ethernet. Extreme Networks introduced 10 gigabit Ethernet switch products in 2002 followed by adapter products from Broadcom and Intel. Today, eight years later, only a handful of servers have 10 gigabit Ethernet LOM because the perfect storm of big customer demand plus low product cost, power and size has not existed.
On June 22 HP (NYSE:HPQ) announced that the latest HP BladeSystem G7 server blades are equipped with an integrated HP NC551i Dual Port FlexFabric 10 gigabit Converged Network Adapter right on the motherboard. The NC551i is a chip from Emulex (NYSE:ELX) that serves as an Ethernet NIC, a Fibre Channel HBA or an iSCSI HBA. The decision by the largest server manufacturer in the world to offer converged networking LOM is a milestone for the industry. The decision reflects pervasive customer demand for high bandwidth 10 gigabit network connectivity today, and demand for network adapters that will allow convergence tomorrow. HP’s new BladeSystem G7 servers are also living proof that the cost, power and size of 10 gigabit converged networking adapter chips are finally small enough for LOM applications.
For server admins this means not having to think about architecting and integrating converged networks. It’s just there. You can use the ports for a single adapter function today, but the capability to converge LANs and SANs is there for you when you need it.
For HP this means competitive advantage, at least until the other server vendors start offering converged networking LOM. Other vendors can add converged network adapter cards, but the customer will pay more or the server vendor will make less profit. I expect a wave of 10 gigabit LOM announcements from server vendors in the months ahead.
For Emulex this means officially joining Broadcom (BRCM) and Intel (NASDAQ:INTC) in a triopoly for network controllers in LOM applications, and a leg-up on the converged network adapter card competition. Given that server admins like to use LOM and adapter cards from the same vendor for better interoperability, data center managers now have an important reason to purchase Emulex converged network adapters.
Disclosure: No positions