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Aarohi Mum on Acquisition Talk

SAN component maker Aarohi Communications may be up for sale, and Emulex could be the buyer.

Though neither company would comment by press time, rumors about a possible pairing have circulated for weeks, and one industry analyst, who asked not to be named, says it may be nearly a done deal.

A potential merger could make sense. Emulex yesterday lowered its revenue forecast by 17 percent, promising more detail when full results are reported on April 27. (See Emulex Below Forecast.) Execs blame the deferral of 4-Gbit/s products by two big OEMs from the most recent quarter to the one that ends in June. One of those OEM customers is almost certainly IBM, which accounted for about a third of Emulex revenue last quarter.

Regardless of circumstance, Emulex, which last quarter earned 100 percent of net revenue from Fibre Channel I/O and switching components, has been eyeing new directions, particularly in virtualization, where Aarohi claims expertise. Here's what Emulex CEO Paul Folino said in January: "In server virtualization environments, SAN connectivity attach rates can reach 80 percent, far surpassing the 5 percent attach rates in the general-purpose server market today, making server virtualization a killer app for SANs."

Enter Aarohi, which offers chips to virtualize and streamline intelligent SAN switches and SAN links to blade servers. The startup is shipping its wares to McData for inclusion in that vendor's Application Services Module (ASM), an add-on to McData switches that McData says will improve scaleability and enable switches to deliver multiple services across virtual links. The ASM is set to ship in the second half of this year, McData says. Aarohi also has a deal with Intel to develop storage processors.

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