In 2001, Emulex commanded 80 percent of the $25 million Fibre Channel host bus adapter (HBA) market. QLogic unveiled the industry's first single-chip HBA in 2002, and leveraged its two-year technology lead into market share gains over Emulex in each of the following eight years. Emulex battled back starting in 2008, when the company regained share in various quarters, but still lost ground for the full years 2008 and 2009. Emulex momentum continued through 2010, when, for the first time since the industry started counting Fibre Channel HBAs, Emulex gained market share over QLogic for an entire year.
According to data excerpted from the IT Brand Pulse Q42010 Network Adapter Report, Emulex gained Fibre Channel HBA share in the last three quarters of 2010, and 2.3 percent for the entire year, to finish with 38.6 percent market share. IT Brand Pulse estimates that QLogic lost 1.5 percent of share in 2010, but still finished the year as the leader with 54.3 percent market share. In 2002, QLogic pulled ahead with single-chip HBAs that were less expensive to OEMs and the only solutions small enough to fit on blade server mezzanine cards. Server OEMs responded by offering more profitable QLogic HBAs across a broad spectrum of hardware and operating system platforms.
In 2009, Emulex gained the upper hand with the only converged network adapter offering a combination of solid LAN functionality that serves 90 percent of the network requirements in the data center, plus iSCSI and Fibre Channel over Ethernet (FCoE) offload. By 2010, IBM and HP integrated Emulex chips and adapters into their virtual networking schemes and began leading with Emulex-based adapter solutions.
QLogic just introduced new chip technology and OEM design wins for adapters based on the new chip. In 2011, the battle to watch is at HP, where Emulex starts the year as the incumbent 10Gbit Ethernet LAN on motherboard (LOM) vendor for HP servers, and QLogic starts as the dominant Fibre Channel adapter vendor. Emulex will attempt to convince customers to purchase the same converged networking adapters as their LOM chips, while QLogic will attempt to leverage its strength in Fibre Channel adapters.
The bottom line is this: Emulex has better NIC functionality, and many IT professionals prefer to use the same brand of LOM chips and NICs because it eliminates existing or potential interoperability problems. If Emulex exploits this advantage, its momentum will continue.