Comments by CEO H.K. Desai on QLogic’s last week raised questions about the future of QLogic’s SANbox 9000 Fibre Channel director switch.
Several times on the company’s earnings conference call, Desai said QLogic was changing the focus on its switching business to edge and blade switches. That would seem to leave out the director switch that QLogic launched 2006 as a low-cost alternative to directors from Brocade and Cisco.
“We continue to gain traction with our Fiber Channel edge and blade switches, which is our primary area of focus,” Desai said. Later he said QLogic is refocusing its switch investments on InfiniBand and blade switches.
To financial analysts on the call, that meant QLogic would leave the SANbox 9000 behind as it begins rolling out 8-Gbit/s HBAs and switches and starts development on 16-gig technology. SANbox 9000 sales have been hurt by lack of any OEM deals with major storage system vendors such as EMC, IBM, and Hewlett-Packard that sell Brocade and Cisco switches under their brand. QLogic’s SANbox 5000 edge switches already support 8-gig connectivity.
“You indicated that edge and blades switches are your primary focus now in Fibre Channel,” analyst Clay Sumner of FBR Friedman, Billings, Ramsey & Co., Inc. said to Desai on the call. “Just curious, does that mean you no longer expect the tier one [OEM] win for your 8-gig Fibre Channel director?”
“We never give up on anything,” said Desai, refusing to clarify his position on directors for the curious analyst.
Several analysts expect QLogic to dump the directors. “Our checks indicate that going forward QLGC may not invest further in the FC high end Director-switch space but could continue to develop mid-low end FC switches and blade switches,” Pacific Growth analyst Kaushik Roy wrote in a note to clients. Roy told me he doesn’t expect QLogic to do any more development on the SANbox 9000 or build any other directors. In other words, it is getting out of the director switch business.
Not so, says QLogic marketing VP Frank Berry. “The SANbox 9000 lives on!” Berry wrote to me in an e-mail. “We continue to sell it.”
Berry also said the SANbox 9000 will be upgraded with 8-gig blades that can replace the 4-gig in there now. What’s changing, he said, is its go-to market strategy. Instead of its original target of Global 2000 firms, QLogic now sees the director as a small enterprise product.
“We’ve been successful for several years in the SME market with our
SANbox 500 line of stackable switches,” Berry wrote. “And we have learned the SME space is where we have been successful selling the SANbox 9000.”
QLogic will make more noise about SME products this summer. Then we’ll see which SANbox it expects SMEs to play in.