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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: MrBuzz who wrote (14787)	3/1/1998 3:29:00 AM
From: LaVerne E. Olney	Respond to of 29386

From the March RED HERRING Magazine: herring.com Tuning in to Fibre Channel Mr. Morris of NEA believes the real networking opportunity may lie inside the enterprise. Up until now, he says, data sent to businesses has been hitting two bottlenecks: the Small Computer System Interface (or SCSI) has limited the traffic in most LANs to a maximum of 45 mbps, and no broadband technology connects disk arrays to servers. This situation will only be exacerbated as backbone speeds rise. But according to Gadzoox Networks, which makes Fibre Channel hubs, the number of network connections for server storage subsystems will surpass the number of client connections by the year 1999. Fibre Channel products alleviate this problem by increasing bandwidth and the flexibility of connections between servers and storage devices or between servers and other servers. Mr. Aronoff says that Fibre Channel "has already been done." But Chris Schaepe of Weiss, Peck & Greer thinks it's "really heating up," although it's not as crowded an arena as Gigabit Ethernet because employees with both networking and storage skills are scarce. Gadzoox and Brocade Communications Systems are the two most notable venture-backed companies in this space. Gadzoox will generate more than $30 million in revenues over the next year and has raised $21.5 million from NEA, Onset, private investors, and Seagate Technology. Mr. Schaepe says that he and his partners have decided to focus on Fibre Channel switches instead of hubs because they think that switches will eventually eat into the market for hubs just as they have in the datacom market. Brocade, which makes Fibre Channel switches, earned $6 million in the quarter that ended in October, only the third quarter in which it has been shipping. Weiss, Peck & Greer recently led a $20 million mezzanine round for the company. Other investors include Crosspoint Venture Partners; Mohr, Davidow Ventures; Norwest Venture Capital; LSI Logic; Andy Bechtolsheim; and others. The idea that history could repeat itself in networking certainly gives one pause. Will Cisco dominate the switching market? Perhaps. But since Cisco faces more competition than ever before in both the LAN and the WAN markets, even this $55 billion behemoth will have to choose its battles. Few VCs doubt that Cisco will continue to be a major force in networking. But will it be the only force? A year ago it probably was, but with so much change in the networking space, continued total domination by Cisco seems less likely every day.