After several attempts at acquiring Emulex, Broadcom is now suing the company for patent infringement over FCoE. While this may create some concerns within Emulex' customer base, Emulex customers and prospects will probably freeze, seek alternatives, or proceed with caution. The bigger concern very well may be the future of Emulex's UCNA.
Now, if Broadcom really wanted to buy Emulex, what they should have done is buy ServerEngines. Yes, I am aware of the bad blood and tensions between Broadcom and ServerEngines, but this is business not a pool party, and buying ServerEngines effectively cripples Emulex at the knees.
UCNA aims to recreate Emulex' FC stack on a ServerEngines Ethernet NIC. The Ethernet stack and the NIC silicon of UCNA are all owned by ServerEngines, about 70% of the technology makeup of this yet to be fully realized product.
Emulex put up all kinds of charts for the Wall Street crowd touting how UCNA would be largely responsible for taking the company to $600M in revenues in just 3 years. They painted their entire future around UCNA and FCoE. In my opinion, this is exactly what Broadcom needs to do to acquire Emulex: take their future away. By my estimates, Broadcom could potentially acquire ServerEngines for $200-$225M. And they could make the purchase using all cash.
Next, Broadcom could go to the same Wall Street crowd that Emulex courted and say we just bought the source of Emulex' primary growth engine. Now all they have is Fibre Channel. Good luck with those growth estimates.Tom Trainer is founder and president of analyst firm Analytico. Prior to founding Analytico, Trainer was Principal Storage Product Marketing Manager at Red Hat, and Director of Marketing at Gluster prior to its acquisition by Red Hat. Tom has worked as managing senior partner ... View Full Bio