Feeds

Emulex hopes 16Gbps Fibre Channel will give it the kiss of life

Q4 sales flat line, records $28.8m loss

Internet Security Threat Report 2014

Emulex is pinning hopes on 16Gbps Fibre Channel Host Bus Adapter (HBA) growth after Q4 sales flatlined and it recorded a $28.8m (£18.37m) loss.

And with Broadcom's legal fangs still fastened to its ankles, it's just no fun at all for the firm in the storage networking adapter business.

Let's briefly set the scene: the company is transitioning from mainstream 8Gbit/s Fibre Channel server HBAs to 16Gbit/s and knocks out converged network adapters (CNAs) providing Ethernet and Fibre Channel over Ethernet (FCoE) connectivity which, unfortunately, have suffered from slow FCoE adoption by customers. Emulex also makes in-array silicon products.

Ethernet product supplier Broadcom launched a takeover bid for Emulex in a fiercely contested battle but lost. It sued Emulex for patent infringements during that time and the cases are ongoing with some settled to the tune of $58 million in Broadcom's favour.

In its fourth fiscal 2012 quarter Emulex recorded revenues of $129 million, up 5 per cent year-on-year and 3 per cent sequentially. The previous two profitable quarters have been succeeded by a $28.8 million loss. Some of that was due to the payment of $38.5 million to Broadcom.

Emuklex quarterly results to Q4 2012

The full year results show a similar picture of revenue growth with losses; 2012 saw record $501.8 million revenues with a loss of $12.3 million. The previous year's revenues were $452.5 million with an $83.6 million loss.

The growth hope is 16Gbit/s FC with Dell and EMC signing up to take these faster HBAs.

Emulex CEO Jim McCluney said: "It’s great to have so many OEMs now in production with our 16GFC technology, solidifying our time-to-market advantage over our nearest Fibre Channel competitor [QLogic].

"With these wins and the momentum we have in the x86 market, we are well positioned to gain overall market share during the 16GFC transition, which is expected to account for 30 per cent of all HBA port shipments in calendar 2013.”

Looking ahead it seems the great SAN connectivity boom years are over. The combined effects of FCoE and iSCSI will drive storage networking to Ethernet over the next few years. The use of flash for primary data storage will increase and thus will be located closer to servers than traditional SANs, weakening demand for HBAs further.

Emulex' product development strategy needs to reflect these trends by, for example, sticking flash memory on its, PCIe-connected, cards and doing something software-wise with that.

Emulex expects its revenues next quarter to be down, between $118 million and $122 million. The results will be affected by payment of more cash to Broadcom. More gloom then. ®

Beginner's guide to SSL certificates

More from The Register

next story
Docker's app containers are coming to Windows Server, says Microsoft
MS chases app deployment speeds already enjoyed by Linux devs
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
'Urika': Cray unveils new 1,500-core big data crunching monster
6TB of DRAM, 38TB of SSD flash and 120TB of disk storage
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
SDI wars: WTF is software defined infrastructure?
This time we play for ALL the marbles
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
Oracle hires former SAP exec for cloudy push
'We know Larry said cloud was gibberish, and insane, and idiotic, but...'
Symantec backs out of Backup Exec: Plans to can appliance in Jan
Will still provide support to existing customers
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.