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10/4/2006
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QLogic Takes On Cisco With InfiniBand Acquisition

Best known as a manufacturer of Fibre Channel host bus adapters, switches, and blades, QLogic plans to pay about $60 million in cash for SilverStorm.

QLogic is acquiring SilverStorm Technologies to become a full-line InfiniBand technology supplier as the market for high-performance computing starts to mature.

The acquisition also intensify will the competition between QLogic and Cisco Systems, which in April acquired InfiniBand technology developer Topspin for $250 million.

Aliso Viejo, Calif.-based QLogic, which is best known as a manufacturer of Fibre Channel host bus adapters, switches and blades, plans to pay about $60 million in cash for SilverStorm, King of Prussia, Pa.

SilverStorm makes InfiniBand switches that are used to build an InfiniBand fabric for high-performance computing, said Frank Berry, vice president of corporate marketing at QLogic. The company also produces routers that bridge high-performance computing networks and Fibre Channel SANs. That's important, Berry said, because there are few native InfiniBand storage devices available on the market.

The acquisition of SilverStorm isn't the first InfiniBand move for QLogic. In February, the company paid about $109 million for PathScale, a developer of InfiniBand host channel adapters, which allow servers to connect to InfiniBand-based high-performance computing clusters, Berry said.

QLogic is making this investment in InfiniBand because, although the technology is mature, the InfiniBand market remains young, Berry said. For instance, he cited QLogic's acquisition in 2000 of Fibre Channel switch vendor Ancor Communications, which at the time had already introduced InfiniBand switches.

"Intel had funded Ancor with $15 million to develop InfiniBand," Berry said. "It had an InfiniBand switch, but QLogic shelved it because the market wasn't ready yet."

However, the market is ready now, according to Berry. "We see it growing in the years ahead," he said. "Go talk to Intel, AMD or Microsoft, and they'll tell you the market is moving toward clustered computing. We're seeing financial applications proliferating on this infrastructure. It will be a multibillion-dollar market."

The channel also is starting to move toward InfiniBand, Berry added. "We have already transitioned the PathScale products to the QLogic channel," he said. "We were surprised how much interest there is. It's intuitive to our channel partners that this market will grow. They know data centers will have their existing infrastructures plus a high-performance computing infrastructure using InfiniBand, with gateways to tie them together."

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