Shareholders' Meeting - Tuesday May 16,2000:
Just got back. I estimated the crowd size at about 130 with more suits than last year. Ken Hendrickson did the entire meeting almost single-handed with some input from Cal and others. Here is my recap:
1. Merger with QLogic was announced right away as being subject to shareholder approval with another shareholder proxy statement and meeting date to be announced. He said later that the vote would be in August 2000 with the finalized deal Q3.
2. The business items in the proxy statement all passed with "yes" votes.
3. Customer comments. On EMC dual sourcing: "We believe this will be the wave of the future". Later said he could not comment of future dual sourcing as that would be a forward looking statement.
Also said that MTI named them the "Number one supplier (of 60) for last year.
Put up a slide of a "success story" described only as a "Fortune 500 telecom" company and the impact of an Ancor SAN on their storage throughput and cost. The throughput was increased from 25MB/s to 80MB/s. As an aside I think this is interesting because it is similar throughput as the Brocade SAN on the LCSE GFS site.
This led into discussions of how Ancor is currently the only FC switch that can connect to all legacy (private loop) servers and scale to a large number of nodes (thousands rather than hundreds).
4. On the SANBox 64 port switch - an alpha version shipped two weeks ago and they are getting feedback that it is working very well. That switch is GA in July. Only the firmware is holding up deployment of the 128 port switch. He described the security on Ancor switches as "the toughest security in the industry".
5. End of the year product goals: 1 or 2 Gbs switch with less latency, increased scalability, and smaller (16 port asic).
6. Infiniband - Ken talked about the fact Ancor has a leadership position and several of their staff have apparently written as many initiatives as anyone else.
7. On the QLogic merger - based on tax free pooling of interest - fixed exchange ratio. He showed the projected segments of the FC storage market and the usual IDC projections of growth. He then showed a similar pie diagram of the combined company and the fact it covered 94% of the SAN market. He talked about the synergies and how it will strategically help Ancor. He said that some deals were lost to Brocade because even though Ancor won the technical competition, the customers were won over at the marketing level by the argument that you need to deal with a secure compqany who is going to be around for the future. The QLogic deal immediately reverses that and Ken pointed out that the total FC sales of both Ancor and QLogic slightly exceeeds that of Brocade.
The QLogic acquisition also reduces the "qualification matrix", accelerates deployment, and reduces costs by using economies of scale at the fabrication level. An interesting comment about QLogic is that they are apparently growing their SCSI business at a faster rate than the SCSI market, largely due to the experience the customer has with them in FC.
QLogic financials were discussed and Q to Q revenues were posted on slides. As we all know they are pretty much flawless.
The deal has unanimous support from customers on the Ancor and QLogic side. There is feedback from the financial community that is also positive. Ken, Cal, and Steve had a conference call this AM talking to a fund that was very positive on both Ancor and QLogic, but they said they had a policy on be quoted in public.
Finally, the corporate cultures are very similar. Ken emphasized the goal of customer satisfaction and cited MTI's statement as recognition of this. He said he believed that QLogic and Ancor both want to deliver to the customer and assure customer satisfaction.
8. On Brocade - Cal said there was no reason to believe they could not scale their current technology into a bigger switch, but they had no knowledge they were doing that. Ken said they made a deliberate decision only to stick to factual information and not get into FUD. He did comment on the Brocade CEO's "confusion" about why QLoogic would risk not getting their "recommendation" as the HBA for an OEM. Ken pointed out that in his opinion it may work the other way and that OEMs would not depend on the switch manufacturer for an HBA recommendation.
I also had some time to talk to the VP of Engineering, Dr. Rauechle to discuss the ethernet storage situation (more later). Ken also briefly addressed this commenting on Adaptecs recent demo as "it is fairly easy to send SCSI over ethernet" or something like that, but to get high performance storage out of it was a whole new ball game.
Ron and Greg were also ther, in fact Ron did a good job during the Q & A. Anybody else feel free to correct me - I didn't tape it.
Overall outstanding presentation. They guys and gals have done and outstanding job.
George D. |
