Driving Data Center Consolidation

By Jeffrey Burt  |  Posted 2009-05-01 Print this article Print


QLogic's Desai said he expects the consolidation in the space to continue, following the same pattern as in the Fibre Channel market, where as many as two dozen companies offered products, but eventually were whittled down to a handful.

"I think there will be consolidation ... because now we view two technologies, either storage [or] data converging on the Ethernet," Desai said. "So, I think there is going to be some consolidation and we want to be one of the suppliers and we want to survive that to [add to] what we have in Fibre Channel, and I think that's the reason we [want to] acquire NetXen, so we have more technology now."

Zeus Kerravala, a Yankee Group analyst, agreed that the proposed QLogic and Broadcom acquisitions are part of a larger consolidation trend throughout the data center, including Oracle's $7.4 billion bid for Sun Microsystems.

"There's a land grab going on in the data center, and I would expect to see that continue," Kerravala said.

The growing use of virtualization is fueling most of the rapid changes going in data centers, he said. It's the first technology that spans across what had been disparate silos of servers, storage and networking in the facilities. Now, with virtualization, there is a convergence of these technologies, as illustrated by the push by Cisco, Hewlett-Packard, Sun and others to offer integrated solutions that include all three aspects, Kerravala said.

QLogic's pitch for NetXen makes sense in this context, given the move to converged networks, he said.

Russell Stern, CEO of Solarflare Communications, a 10G Ethernet company and NetXen rival, agreed. In an e-mail, Stern said QLogic's acquisition of NetXen "validates the importance and growing focus on 10G Ethernet in the enterprise data center, especially the ability of 10G Ethernet to serve as the common wire for LAN-SAN [storage area network] consolidation."

Stern also said the consolidation trend is only beginning, as "storage and Ethernet networks converge, companies look for top-line revenue growth, and companies figure out how to respond to Cisco's recent unified communications announcements."


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