RE: FC Switch Market
Mike,
<<What would be an example of a Monkey?
AMD. Monkeys make Gorilla-compatible products that compete with the Gorilla purely on price.>>
Sorry, I did not make my point clear. I was asking for a possible Monkey in the 2 Gorilla Game scenario ( 8/16 port market and Director market) you mentioned.
<<If shared memory is a proprietary process that vendor would be an additional gorilla candidate in the gorilla game. If it licensed Brocade's proprietary processes, it would be playing the monkey role in the gorilla game. If shared memory is a non-proprietary process which Brocade dominates, the other vendor would play either the serf or prince role, depending on relative market share.>>
Shared-memory is a common architecture outside of FC switch applications, but perhaps the particular implementation in Brocade's products has a proprietary twist. This takes more intimate knowledge of their design than I possess.
<<The first thing that has to happen is a tornado has to form. If no tornado forms, it will be a game of proprietary architectures with no gorilla. If no tornado forms, it's because neither company formed a strong enough value chain; tornados don't form without such a value chain rallying around at least one product.>>
This is the part that caused me to conclude that the FC switch market would be a royalty game. How can a switch company control the value chain? This would be analogous, it seems to me, to hard disk vendors controlling their value chain (box makers). Why would the SAN companies say "I gotta have Brand X switch, and not that Brand Y switch"?
You brought up the necessity of a tornado to have a Gorilla. Bruce was then kind enough to give some year over year revenue growth for Ancor, Brocade, Gadzoox, and Vixel.
My question on this is, which tornado are we trying to observe?
The Fibre Channel tornado? In which case we should add a few more companies like Emulex and Q-Logic and others that buck wrote about.
The Fibre Channel switch tornado? In which case we would have to back out the hub revenues from Vixel and Gadzoox - the majority of their reported revenue.
The SAN switch tornado? In which case we would have to back out the sales to Sequent (now IBM) from Brocade's revenues (a very big chunk in 98 and 99) and almost all of Ancor's revenues prior to the last half of 99.
Ashok Kumar (I never followed the box makers so I don't know what credibility he has with others on this thread) expects 160% CAGR from 1998 to 2003 for SAN switches. This sounds to me that a tornado is expected. Of course, the tornado may come without a Gorilla emerging. It seems to me that it will take at least another year to decide if there is a Gorilla in the SAN FC switch market. Anybody agree or disagree?
Greg |
