Emulex Slaps Rivals With Report

The vendor paid IDC for a survey on HBA use that's become a marketing tool

December 5, 2001

4 Min Read
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Emulex Corp. (Nasdaq: EMLX) is using a study it commissioned fromresearch firm IDC to trash its competitors' products. But an analyst at a rival firm says the IDC findings smell mighty funny.

According to Emulex, the study shows quantifiable, money-saving benefits of using Emulex's Fibre Channel host bus adapters (HBAs). IDC compared the productivity, efficiency, and uptime provided by storage area networks with Emulex HBAs against SANs that use other vendors' wares.

While the report doesn't name Emulex's competitors specifically, key players in this segment include Agilent Technologies Inc. (NYSE: A), JNI Corp. (Nasdaq: JNIC), and QLogic Corp. (Nasdaq: QLGC).

And these rivals won't like the results. IDC says it found that shops that use Emulex are 27 percent more productive than those that don't. In other words, storage management personnel at sites thatuse Emulex products supposedly spend 27 percent less time managing the SAN infrastructure. With regard to efficiency, which IDC defines as management hours required per terabyte of storage, the research firm claims that the Emulex SANs needed 24 percent less time for care and feeding.

Provocatively, the IDC study says Emulex SANs have 49.2 hours ofadditional uptime per year compared with competing products. IDCsays this translates into $3 million per year of increased "revenue-generationopportunity." The report says Emulex shops average 31.3 hours of downtime peryear (both planned and unplanned) versus 80.6 hours ofdowntime for the competition.But the report's credibility is questionable on several fronts, says anindustry analyst from another market research firm, who wished to remainanonymous.

First, Emulex paid for the study, which instantly compromises its credibility -- at least in the eyes of competitors. The report's also based on a survey of just 20 organizations -- making its statistical validity questionable. What's more, HBAs account for a relativelysmall part of the overall operation of a SAN, so any claims of dramaticcost-savings from using a specific HBA are ludicrous, the analyst says.

"The only thing that Emulex puts in the SAN is the host bus adapter. Do youthink a host bus adapter can make you 27 percent more productive?" the analystsays. "The study is bulls***."

A devil's advocate might say such complaints carry a whiff of sour grapes. And Eric Sheppard, senior research analyst at IDC who conducted the study, isn't making any apologies. "We didn't hide the fact that Emulex paid forit, and we didn't hide the fact that it was a small sample," he says. "Theresults are the results."

He adds that IDC doesn't attribute 100 percent of the benefits it found in thesurvey exclusively to Emulex. Indeed, a prominent disclaimer in the reportsays, "Many factors contribute to implementation and management costs in a SAN."But Mike Smith, Emulex's executive VP of marketing, insists that Emulex hasa total cost of ownership advantage over competitors. "The benefit derives primarily from twofeatures," he says. "Emulex adapters allow for firmware upgrades, and we use asingle driver for all of our adapters."

According to Smith, these features simplify the ongoing use of Emulex HBAs, something he says survey respondents value more than "speeds and feeds" these days.

Clearly, Emulex has enlisted research to buttress its own marketing strategy. And that speaks to several key points about this segment. First, it's growing fast enough to motivate leaders such as Emulex to try and solidify their piece of the action.

And the action is sizeable: According to Gartner/Dataquest, estimated worldwide sales of Fibre Channel host bus adapters will grow to $847 million in 2002 fromaround $600 million this year (see Fibre Channel HBAs Going Strong).

Emulex's news is also an indirect bid for the confidence of its OEMs, including Compaq Computer Corp. (NYSE: CPQ), EMC Corp. (NYSE: EMC), Hewlett-Packard Co. (NYSE: HWP), Hitachi Ltd. (NYSE: HIT; Paris: PHA), and IBM Corp. (NYSE: IBM). These vendors account for roughly 80 percent of Emulex's worldwide annual sales.Emulex is also clearly interested in casting its products in the best light as it enters new markets, such as iSCSI, which it plans to do in the first half of 2002. "The iSCSI community is going to be a bit less forgiving than the Fibre Channelcommunity in terms of management," Mike Smith admits. "The Ethernet folks are used to plugand play."

A bit of market research on company differentiators might help the campaign.

Still, it's a question whether Emulex's iSCSI host bus adapters make an organization's SAN operations27 percent more productive. We'll have to wait for another study to find out.

Todd Spangler, special to Byte and Switch

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