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LSI: The Building Block Supplier For Storage And Networking

What large multi-product IT vendors do is hard to describe in a few words, and LSI is no exception. Saying that LSI is a storage and networking solutions company is a good start. Saying that LSI is an IT infrastructure component building block supplier helps define it a bit further. LSI views itself as delivering the foundation for innovation in IT infrastructure, and although IT organizations may not know it, they probably could be called (with apologies to Intel) "LSI Inside," embedded as part of their storage and networking products. Examining LSI a little deeper may help illuminate a company that not only affects IT infrastructures today but is likely to have an even greater impact tomorrow. 

Even though LSI had $2.2 billion in revenues in 2009, the company is probably unfamiliar to most in IT since a good part of its embedded technologies are invisible. If IT recalls the company at all, it is probably as LSI Logic, whose main focus was ASICs. So last week, LSI held an industry analyst day in New York City to bring people up to speed on where the company once was, where it is today, and where it is going.

To start with, LSI has gone through a significant transformation over the last several years, dropping Logic from its name as well as its core focus on ASICs. Key to this effort was its merger with a company called Agere, which developed telecommunications components among other things. LSI continued to focus on its strengths in external storage, as well as storage and networking connectivity. It also tightened it focus on the HDD/SSD and networking markets and exited from its mobility and consumer market investments. Please recall that the company's remaining markets are ones in which it sells components. For example, LSI does not make hard disk drives, but it provides the fundamental read channel technology that hard disk drives use.

LSI believes that the IT infrastructures are being increasingly taxed because of the heightened demands being placed upon them. The company has and is continuing to position itself to take advantage of the resulting changes in IT infrastructures, such as those occurring in next-generation data centers.

We hesitate to impose upon readers a discussion of intelligent read channels and preamp recording, needed for hard disk drives. However, even though some LSI products are at this level of component granularity, the company's Semiconductor Solutions Group interest lies in the "converged infrastructure," which LSI believes is not a term owned by HP but rather one that reflects ongoing trends in the industry. One of the group's key focus areas is the next-gen data center.

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