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Xyratex Offloads Adapters

Storage subsystem supplier Xyratex has found a way to keep its hand in a side business while maintaining its focus on storage, and its solution could indirectly benefit users.

Xyratex has licensed the technology and key customer accounts for its X-card series of network analysis adapters to Napatech, a three-year-old company based in Copenhagen. (See Xyratex Sells Adapter Biz.) Napatech's specialty is programmable Ethernet NICs used in gear such as protocol analyzers. The startup also has something Xyratex has lacked up to now -- 10-Gbit/s support.

For terms neither party will disclose, Xyratex plans to fork over the building, development, and selling of X-cards to Napatech, which in turn will come out with new products unifying the two companies' wares sometime this fall. Napatech even has the right to hire one or two key sales managers from Xyratex. (The managers have been given the option to stay or to go to Napatech.)

"We'll transfer network analysis accounts and their fulfillment to Napatech for the foreseeable future," says Steve Thompson, Xyratex's CTO. At the same time, though, he says Xyratex will hang onto the basic value of the X-card, including its patents. "If we let Napatech concentrate on the analysis engine, we can concentrate on software and storage applications," he says.

This appears to make sense, given the odd position Xyratex finds itself in. Its network analysis market niche accounted for less than 1 percent of overall revenues in 2005 -- which were $679.6 million. (See Xyratex Reports Q4.) Small potatoes, compared with the company's burgeoning storage and network systems and storage infrastructure businesses. (See Xyratex Reports Q1.)

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