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To: Roy Sardina who wrote (15769)	4/15/1998 3:51:00 PM
From: Fang Li	Respond to of 29386

A report from Morgan Keegan. fcloop.org Morgan Keegan is a Southern U.S.-based investment bank which has been publishing research on Fibre Channel since 1994. The firm believes that 1998 will post strong deployment of Fibre Channel solutions in the high-end computing environment. Fibre Channel will be implemented in two key markets: enterprise storage and server clustering. A number of important developments have transpired over the last several months to help drive these markets: More Solutions are available: Over the last six months, a number of new products have come to market supporting the Fibre Channel interface. Offerings include data storage products such as enterprise-level disk arrays, external disk attachments, and individual disk drives along with connectivity products such as next-generation hubs, switches, and adapter cards. Solutions are more affordable: Fibre Channel adapters are now available for as low as $600 each, less than half of what they cost just one year ago. Likewise, Fibre Channel switches have also seen prices come down by more than 50% over the last year as they can now be obtained for less than $1,500 per port. Vendor support is accelerating: Fibre Channel-based product solutions are being brought to market from vendors such as Compaq, Sun Microsystems, Hewlett-Packard, and StorageTek, and clustering system vendors such as Sequent and Data General over the last six months. Virtually all of the storage market should have Fibre Channel products on the market by mid-1998. Data storage costs continue to fall: Market research firm DiskTrend estimates that the cost per megabyte of storage has declined from over $5 in 1991 to about 10 cents today, an average annual erosion rate of almost 50% per year. Storage demand continues to be strong: Assisted by lower costs and an explosion in applications which hoard disk capacity, storage demands are doubling each year and are likely to continue growing at this rate for the foreseeable future. At the same time, computer processors are doubling their performance every eighteen months. Both of these trends are pressuring the I/O channel to match these advancements in order to avoid throughput bottlenecks. More companies are continuously running their computer systems as part of a non-stop operation: Dataquest estimates that about a third of all businesses are running 24-hour per day, seven-day-per-week operations, growing to 60% by decade's end. Unplanned downtime is very costly: NationsBank estimates that it loses about $2 million for every hour of unplanned downtime. As a result, companies are looking more toward mirroring and clustering technologies to ensure 24 x 7 operation. Clustering is gaining momentum: Unix clustering solutions have been on the market for some time, and solutions supporting as many as 32 nodes are now on the market. Meanwhile, clustering over Windows NT should accelerate now that Microsoft has made its first version of its Cluster Server solution available. Fibre Channel is the superior technology for both data storage and server clustering: Fibre Channel's ability to merge channel and networking functionality on the same data path make it an attractive alternative to existing technology standards. Moreover, its broad-based vendor support and its robust speed and distance features make it an attractive technology for both enterprise storage and server clustering, applications which demand fast throughput and high availability. Using projections from industry sources, Morgan Keegan assesses the net present value of the Fibre Channel hub, adapter, and switch opportunity to be over $7 billion today based on a discounted cash flow assessment. In this research report, the firm illustrates the trends and drivers for Fibre Channel in both the enterprise storage and server cluster markets and defines the opportunities for the providers of this technology.

To: Roy Sardina who wrote (15769)	4/16/1998 9:40:00 AM
From: Craig Stevenson	Read Replies (1) \| Respond to of 29386

Roy, I see your point about the sub $1000 price point. It is similar to the sub $1000 computer. Sort of the holy grail. I'm not sure it can be done with 2 or 4 ports per ASIC, though. It will probably take the next generation (probably 8 port) ASIC to get there. Speaking of ASIC design, to date, it seems as if most of the FC design work has been done by companies like Ancor and Brocade. At some point, it seems to me as if the big boys will start to work on FC ASICs too. (More than just the basic functionality.) I'm thinking of TI's work with putting a complete Ethernet switch on a chip. Craig