TM,
This seems to be a recurring theme. Those of us who have actually met Ancor's management ARE impressed. They seem to be a solid bunch of people. I also have no doubt that Ancor's products are sellable, but to date they evidently haven't been selling them very well. The sales area seems to be the real problem area.
The question of valuation is certainly a good one. Unfortunately, I don't have the answer. Back when Cisco bought Granite for $200+ million, I thought Ancor's technology was probably worth that much. Now, I'd probably settle for half that. <g>
The patent issue is one that still troubles me. Until Arcxel came out with a Class 1 / Intermix switch, I thought Ancor's patent would make it extremely difficult for anyone to duplicate their technology. Evidently, it was possible to design a switch without infringing on Ancor's patent, which would seem to make that intellectual property less valuable.
One thing is certain. Great engineers DO NOT guarantee great sales. Ancor has some great engineers, but they haven't seemed to help the bottom line yet. I think the most valuable part of Ancor is their ASIC design, but what the actual value would be is unknown.
If the recent rumors surrounding OEM losses are true, Ancor's uphill battle will continue. It will become more and more difficult to compete with Brocade (and possibly Vixel/Arcxel) as those companies ramp revenues quickly over the next year or so. They will simply be able to out-muscle and out-maneuver Ancor, because they will have a lot more financial resources at their disposal. In a worst case scenario, it may end up being a Microsoft versus everyone else type of situation. While it isn't impossible to compete effectively with Microsoft, it is extraordinarily difficult to compete directly with them.
I don't want to make it sound like this is an insurmountable problem for Ancor, but I do think it will take decisive action by management to address several apparent shortcomings. The Fibre Channel market is real, and opportunities exist. Ancor must find a way to compete effectively in an increasingly crowded and competitive market.
Craig |
