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Gadzoox Networks

Egad! It's axed one third of its staff, and its stock trades for pennies. Can it survive?

Dont blame it on the switches.

While there are different views about why Fibre Channel switch maker Gadzoox Networks Inc. (Nasdaq: ZOOX) seems to be gasping its last breath, most observers agree that the quality of its Slingshot switches has nothing to do with it (see Gadzoox Twitches and Gadzoox Wields Axe).

With its technology, Gadzoox has often been a pioneer. The San Jose, Calif., company was "the embryo for the SAN market," as an ex-employee describes it, having helped lead the market early on from unmanaged to managed hubs.

And, after missing the initial move to Fibre Channel switching, it has continued to break new ground. Last year it was one of the first FC switch makers to release a 2-Gbit/s switch, shipping the Slingshot nearly six months before market leader Brocade Communications Systems Inc. (Nasdaq: BRCD) delivered its 2-Gbit/s switch in mid-November (see Gadzoox Slings Shot).

Still, while Gadzoox’s technological know-how is impressive, it is in danger of being squished out of the market and into oblivion. Brocade holds about 90 percent of the market and is hogging almost every original equipment manufacturer (OEM) the FC fabric switch realm has to offer, leaving Gadzoox very little room to operate. The remaining 10 percent of the market doesn't allow for a lot of breathing room either, with players like QLogic Corp. (Nasdaq: QLGC), McData Corp. (Nasdaq: MCDTA), and Inrange Technologies Corp. (Nasdaq: INRG) competing with Gadzoox for the leftovers.

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