QLogic Buys NetXen, Adds 10-Gbit IP Technology To Storage Line


NetXen of Cupertino, Calif., is a producer of Gbit and 10-Gbit Ethernet adapters for volume 1U and 2U servers.

The acquisition gives QLogic IP networking technology to go with its primary line of storage networking products.

The all-cash deal was worth about $21 million, according to QLogic.

QLogic is one of several vendors looking at ways to converge storage, IP and clustered networks into a single network.

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Data center convergence has become a major technology driver as customers look for better ways to improve the efficiency of their IT operations.

That convergence includes such things as Fibre Channel over Ethernet, a new version of the Ethernet protocol that allows Fibre Channel connectivity to happen on the same network as IP traffic and which could eventually work with a variety of IP and storage protocols over a single network.

Convergence in the data center is also coming from moves by major IT vendors to combine server, storage and networking technologies, as evidenced by Cisco's recent entry into the server market with its Unified Computing System (UCS) and similar moves by more established server vendors like IBM, HP and Sun.

That is also the reason for Broadcom's unsolicited $764 million bid for QLogic rival Emulex, unveiled on April 21. Emulex has since said it is considering the offer.

QLogic declined to comment on the acquisition.

However, H.K. Desai, QLogic chairman and CEO, briefly discussed the acquisition during his fiscal fourth-quarter financial report on Thursday.

"We have been engaged with them for several months in various activities," Desai said, according to a QLogic transcript of his presentation. "Our conclusion was that NetXen provides significant complementary intellectual property and expertise. This will result in QLogic being in a better position to address a wide range of emerging customer requirements in converged network markets.

"NetXen's existing products and technology have already gained acceptance from leading server OEMs with several products shipping. NetXen has been highly focused on next-generation Ethernet technology for the past seven years and brings us approximately 90 additional employees, roughly half in the U.S. and half in India."

Emulex issued a statement by Steve Daheb, chief marketing officer and senior vice president of business development, in which it blasted QLogic's strategy as a "band-aid" in an effort to catch up to Emulex.

Daheb wrote that while QLogic might eventually be able to compete with Emulex's technology, QLogic will still not have hardware-based iSCSI off-load capabilities.

"Emulex universal adapters deliver on that promise now - with a platform that supports Enhanced Ethernet protocols that support IP and storage networking, including TCP/IP, NAS, FCoE, AND iSCSI," he wrote.

Daheb also wrote that QLogic's customers will have to choose between two different platforms, which gives the company a fragmented road map, and that one of the two platforms will eventually need to come to a dead end.

"QLogic's acquisition only validates Emulex's converged networking strategy. QLogic has recognized, as Emulex did over a year ago, that extending their Fibre Channel, storage-centric position with FCoE is not sufficient for achieving new OEM-converged networking design wins," he wrote.