Friday, October 27, 2006

Fibre Channel slow amid 4Gbit ramp

In the end, all the talk about data center convergence really amounts to a divergence and fragmentation of networks and interconnects.

For examples of this fact, look at yesterday's lackluster quarterly results from Fibre Channel leader Emulex. The company announced two new divisions to diversify into SATA, SAS, iSCSI and Ethernet because--even amid a fast transition to 4Gbit FC--the FC market is fairly stagnant and plenty of other technologies are coming on strong. Re-positioning itself for the more diverse world, Emulex is sprucing up its logo as well as its product portfolio and R&D.

Look for a full story shortly at today. --rbm

1 comment:

Anonymous said...

The FC market is stable not stagnant. Stable hardware and software ecosystem. Stable performance growth curves going through 8G FC. Stable isn't bad.

Stable for companies like Emulex translates into FC is now a commodity technology and that equates to cost pressures and reduced profit margins. Emulex and its chief competitor Qlogic are both in a race to diversify. They have no choice even if the FC numbers grew significantly since profit margins from any commodity technology have only one way to go and that is down.

As for new technologies, well, nothing is perfect. Close examination of FC and these "new" technologies shows they are all deficient in varying degrees. All lack the software to address new market needs - virtualization, resource utilization, QoS, security, and so forth. All lack a clear architecture to fit into the various data center management packages in a complete manner.

In short, all of these technologies are far from perfect and it will take a number of years to weed out and transition customers to the "new" technologies. This is actually unfortunate since it discourages innovation and investment. In short, these companies are largely chasing new markets where quick money can be made rather than investing to create solid solutions that will enable the transition to new technology to be as short and as painless for customers. They are in many ways shooting themselves in the foot by their failure to execute and work to solve these larger problems that are at the root of IT cost escaltions. It is like everyone is playing a shell game or is it hot potato where no one wants to have to do the real work to deliver a solution. All just want to sell the next great break through technology which in reality just changes the dollar spend rate to a different blend of priorities but the same end result of no real end customer benefit.