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Emulex Sticks With Fibre Channel

With the high-end HBA market stalled, Emulex Corp. (NYSE: ELX)
today laid out its strategy to attack the lower end of the market while maintaining a product diet high in Fibre.

Speaking at the Credit Suisse First Boston Corp. Technology Conference today, Emulex executives said Fibre Channel vendors will probably have to cut the price of their storage gear in half to successfully capture the SMB (small and medium-sized business) market.

While many vendors see iSCSI as the best way to reduce price, Emulex plans to do it through Fibre Channel initiatives, including a new generation of low-cost embedded switches and partnerships with other storage vendors on products tailored for the low end.

The market is pushing down into the midrange and SMB market,” CFO Michael Rockenbach says. “Customers there are more focused on cost and ease of use. That market is just starting to develop. Our objective is to grow through volume.”

Emulex executives spoke on the same day that market research firm Dell'Oro Group

reported industry-wide HBA revenues have declined sequentially (see Dell’Oro Says Director Sales Grew). The decline continues a trend that has contributed to Emulex experiencing two straight quarters of disappointing revenue (see Emulex Drops Revenue Again).

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