QLogic Makes IP Storage Play With Little Mountain Acquisition

Executives at QLogic, based here, said Tuesday that the company will spend close to $30 million in cash and stock over the next four years to acquire Little Mountain Group.

Little Mountain, founded in April 1999, is active in the development of iSCSI technology. With iSCSI, a server will be able to connect to SCSI devices over IP networks and treat them as if they were direct-attached devices. iSCSI standards are currently being defined, with final standards expected to be available this year.

For QLogic, which had started developing IP-based storage products on its own, the acquisition of Little Mountain was a way to accelerate those efforts, says Mark Edwards, senior vice president.

Because standards are still in flux, Little Mountain was some time away from having actual product to ship, says Graeme Plant, director of product marketing at the company.

Little Mountain, with a staff consisting of 17 engineers and one marketing person, was established with the purpose of developing a technology and then being acquired by a larger storage vendor, says Plant.

"We felt our team was strong in developing technology, but building a channel for this technology was too much for us," he says. "Our strategic exit plan from the start was to be acquired. . . . We're at the stage where we need to either build a sales infrastructure or get acquired."

QLogic's iSCSI plans call for initial development of a network-interface card (NIC), says Edwards. However, QLogic can use iSCSI technology in products that came with last year's acquisition of Fibre Channel switch vendor Ancor Communications to develop equipment that allows the bridging of SANs over IP, he says.

In December, rival host-bus adapter vendor Emulex paid $645 million for another IP-based storage technology developer, Giganet, also in an effort to shorten development time. And last July, Cisco paid about $450 million for IP storage developer NuSpeed Internet System, just days before NuSpeed was slated to publicly announce its technology plans.

QLogic and Emulex do not have the iSCSI host-bus adapter field to themselves. Adaptec already ships intelligent NICs for the iSCSI market. However, the iSCSI functionality depends on software being developed now that will be available for download into the cards' firmware once standards are finalized.