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Emulex Secures Sierra Logic: Page 2 of 3

"Diversifying ourselves beyond a one-trick pony as a Fibre Channel HBA vendor is critical for us," Emulex CEO Paul Folino said on a conference call with analysts. "This is one step along that way."

Sierra Logic is the second startup Emulex has acquired in four months. It picked up storage virtualization chip startup Aarohi in April. (See Emulex Buys Aarohi and Aarohi Mum on Acquisition Talk.)

Emulex's shopping spree is a response to criticism from technology and financial analysts who've taken the company to task for failing to diversify its product portfolio as quickly as its major HBA rival QLogic has done. (See QLogic Bets on InfiniBand.) Reliance on one product hurt in the first quarter of this year, when delayed launches of storage products by EMC and IBM resulted in a disappointing quarter for Emulex. (See Storage Financials Take a Dip and Emulex Below Forecast.)

Emulex executives say Sierra Logic's products can be combined with InSpeed embedded switches Emulex acquired from Vixel in 2003 to address low-cost, high-capacity alternatives to Fibre Channel drives for disk array suppliers. (See Emulex Drops Cash for Vixel.) Sierra Logic bridges and routers are already used in SATA systems, and Emulex InSpeed switches show up in nearline Fibre Channel ATA (FATA) drives. Emulex has announced InSpeed OEM deals with Engenio, Fujitsu, HP, NEC, and Xyratex.

An Emulex/Sierra Logic combination can thus be used to create lower-cost FC alternatives for SAN suppliers. "They make a SATA drive look like a Fibre Channel drive to the storage controller, for all intents and purposes," Emulex president Jim McCluney said of Sierra Logic's technology.