Neil,
My take on the Vixel acquisition of Arcxel is that they see the move to switching happening sooner than they thought. There may not have been time to develop their own switch product(s) before their customers needed them.
Have you heard how much Vixel paid for Arcxel? I was hoping to see that information in the press release, but it wasn't there. That type of information would give us a MUCH better handle on what Ancor would be worth in a takeover situation.
In the long run, I think Ancor's de-emphasis on adapters will be good. There is simply too much competition in that area, and with the price dropping quickly, it won't take long for them to become commodity items. Hubs and switches should maintain a higher profit margin going forward. I don't think anybody mentioned this, but during the conference call, it was stated that profit margins were up, due to the higher switch to adapter ratio.
Others have commented about Ancor's new "focus". I might be able to shed a little light on that based on my own experience. When a business first starts, or when they are competing in a fairly limited market, they tend to do too many things in an attempt to bring in as much revenue as possible. (The shotgun approach.) As the business matures (and hopefully the management), products and services that are marginal get jettisoned in favor of more profitable ones, and internal resources are re-assigned to those areas.
Until recently, we hadn't seen that with Ancor. The focus on storage, coupled with the de-emphasis on adapters would indicate to me that they see more profit potential in the storage area, and plan to divert resources from the adapter side to support the storage side.
Mr. Frane must be a heavy-hitter, because he was specifically mentioned during the conference call, and then was the focus of the follow-up news release today. It could be coincidence too, and maybe I'm reading more into it than I should. At any rate, it is interesting that someone with his resume would choose Ancor.
Craig |
