George,
<<<Research and development expenditures were $5,450,942, $4,271,393, and $3,198,155 in 1998, 1997 and 1996 respectively.>>>
I guessed that's why many had said FC switch development cost was about $20M and Ancor could be had for $ 50M
<<That is for a group of proven engineers in an established facility.>>
IMO this is the main point. Most FC engineers learned on the job with existing FC companies. A large networking company cannot list an ad and hope to hire the right talent to start its R&D department and build a competitive FC switch with a budget of $20M. It just won't happen.
IMO both Brocade and Ancor possessed unique FC talent which is tough to duplicate. Vixel purchased Arcxel for an undisclosed amount of money for their FC switching talent. Arcxel didn't impress me then. Unless they made significant technological break through, They will not be playing at the same level with Brocade and Ancor. Gadzoox's managed hub (they call it FC switch) does have its unique application. But again, Ancor has the answer and I am sure Brocade will also. So, from a competition's point of view, Ancor shouldn't sit still which I don't think they are. But, they still enjoy a comfortable lead which will translate into richer bottom line.
KJ
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