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Technology Stocks : Son of SAN - Storage Networking Technologies -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (4262)	12/18/2001 5:53:22 PM
From: Gus	Respond to of 4808

Almost missed this questionable report. This board has seen the major server and storage vendors change their approach to the switch and HBA opportunities several times during the last 5-6 years. IBM outsourced the mainframe SAN (ESCON) switch contract to McDATA in 1994. EMC bought McDATA in 1995, labeling the move then as strategic. At around the same time, Sun and HWP then thought it was also strategic to own the switch technology, particularly because of its potential to replace parallel SCSI. But HWP sold its CNO (Canadian Network Operations) and all its switch patents (15) to McDATA for a measly $5M in 1997 and Sun struck a deal with Ancor (now part of QLGC) in 1999. At one point, Sun and Compaq thought it was important to own the HBA technology too, but both are slowly getting out of that business of manufacturing their own HBAs as can be gleaned from the business going to QLGC, EMLX and JNIC as well as Compaq's deal with Troika Networks. EMC started distributing its McDATA shares as stock dividends to its shareholders last year so that clearly, they no longer saw ownership of the switch technology as strategic even though they retain rights to all of McDATA's patents under their 5-year OEM agreement. HWP is coming out with its iSCSI switch early next year and that may indicate that it eventually wants to own its own Infiniband switch technology too. HDS may be following the same line of thinking, but the market is clamoring for standardized and interoperable switches so the market demand for yet another proprietary switch at this stage of the industry's maturation (~20% market penetration) is highly questionable.