The new year is always filled with hope and excitement, and 2011 shows the promise of great things for Emulex. In Late January, we held our Sales Kick-off and it was a great week. We heard from key industry analysts and Fortune 500 IT managers. They came to talk with our sales force about what they see happening in the market, what they are deploying today in their data centers and their plans for the future.

• Straight Talk with Steve Duplessie – Everyone in this business knows that when you give an open microphone to Steve Duplessie, you better hold on tight, because you are going to hear things you never expected before…and he did not disappoint. Steve focused on the growth and realities of server virtualization, and how the growing density of virtual machines (VMs) is creating the demand for 10Gb Ethernet (10GbE) and 40GbE going forward. According to ESG’s most recent survey work, today, 62% of virtualized servers are running less than 10 VMs per physical server, but over the next 24 months, 51% expect between 11 and 25 VMs per physical server. This aggregation of bandwidth is the number one driver of 10GbE.
• Connecting the Cloud with James Staten – James Staten from Forrester delivered a great talk on how cloud data centers are different that traditional data centers and how they are using networks in new ways to deliver content. One data point he called out was that Netflix delivers movies online in 100 different formats based on the network, viewing device and quality of service requirements. Each of these formats uses data and IP networks, and each requires new classes of service. This is another driver of the growth of bandwidth and multiple networks converging.
• Listening to IT – We also heard from a few Fortune 500 IT data shops. They told us about ways and methods they are using to converge networking, server virtualization and container-based servers to deploy next-generation data centers. In each case, they confirmed what we all know: major shops are migrating to 10GbE, they are doing it for new deployments (no rip and replace) and 10GbE and network convergence are part of the new standard configurations being deployed.

2011 will be a high growth year for network convergence and for Emulex. In October 2009, we told the world that Ethernet would be over 10% of our revenues in the quarter ending December 2010, and it was. In November last year at our Investor Analyst day, we said Ethernet revenues would be 25% of our revenues in the quarter ending December 2011. After spending the week with industry analysts, our sales team and some of our leading end-user customers, I am sure we will make that target and ensure that 2011 will be a great year for the company.

Posted in Uncategorized | 1 Comment

Emulex’s fiscal year starts around July 1st, and our recent announcement of a definitive agreement to acquire ServerEngines leaves us feeling like it is Christmas in July. Why? We have the opportunity to expand our market and drive our strategic vision forward. Below is a chart that shows our core strategic framework for our product lines, including the product lines that would be added in the transaction.

Let’s take a look at how the transaction will expand our strategic vision if ServerEngines’ products are added to our product lines. Continue reading…

Posted in Uncategorized | 1 Comment

Pick any analyst you like (Gartner, ESG, IDC, Taneja), and they all agree, IT spending is going to increase in 2010. Gartner predicts that IT spending will increase 4% to 9% this year, which is a reversal of the decline in 2009, also 4% to 9%*. So, now that we’re half way through the year, is 2010 an indication of better times ahead for IT? I think Steve Duplessie from ESG said it best: “In 2009, IT stopped spending money. In 2010, they will spend more to save money,” and it would appear that many industry and financial analysts agree with him. I also think it has to do with the most important part of the capitalist system: competition. Businesses can never really stand still; they might take steps back to reassess where they are investing, but they never remain stagnant for long, because their competitors won’t either.
Continue reading…

Posted in Uncategorized | No Comments

Today, we announced a milestone partnership with HP to provide our OneConnect Universal Converged Network Adapter (UCNA) technology as part of the HP integrated FlexFabric Adapter, which is embedded on their next-generation ProLiant G7 server blades. Many people would say, ”So Emulex got a LAN on Motherboard (LOM) design win.” However, HP is not calling it a LOM; they have dubbed it the HP integrated FlexFabric Adapter because it changes all of the old rules and capabilities that have traditionally been attributed to the LOM. True, integrated networking capabilities have traditionally been called the LOM market, but this is so much more than a LOM. Until today, LOMs have been a dumb, cheap, utilitarian part that connected servers to the network. What HP and Emulex have created changes networking on every level in the data center and will no doubt be dubbed the real beginning of ubiquity for network convergence. So, what is the next generation of networking on the server side? Let’s take look at what this means to the market and the data center.
Continue reading…

Posted in Uncategorized | 2 Comments

Last week we announced the proposed acquisition of ServerEngines™, our long-time partner in the 10Gb/s Ethernet (10GbE) market. As many of you know, we partnered with ServerEngines over two years ago to build our OneConnect™ Universal Converged Network Adapters (UCNAs). Our partnership has resulted in design wins with Dell, EMC, Hitachi Data Systems, HP, IBM and NetApp. To say that it has been a successful partnership is an understatement.

As Emulex moved deeper into the 10GbE market, it was clear that we had the opportunity to enhance our position in the market by expanding our footprint on the server motherboard for LAN (Local Area Network) on Motherboard (LOM) and other core technologies at the systems level. Historically, a strong position in the LOM market leads to a leadership position in the NIC, adapter and mezzanine add-in card market. Continue reading…

Posted in Uncategorized | No Comments

I don’t think it will be much of a reach to say that folks in the technology business love the MythBusters. They help make math and science cool and that has always been one of my personal goals. As you can see, we have contracted with them to support an event with IBM and Intel. Obviously, this event will be fun and entertaining, and it will help teach many people about our products and how they help IT managers lower capital expenses (CAPEX) and operational expenses (OPEX) and drive their companies to be more competitive in their respective markets.

Most of my blogs are very specific to our business, and in this one, I would like to talk a bit about education and how vital it is to families, businesses and our industry as a whole. Additionally, I would like to take a few minutes and talk about how important education is to me, our Chairman, Paul Folino, and the entire company. Continue reading…

Posted in Uncategorized | No Comments

In Mission Impossible 2, Tom Cruise runs up to a pay phone in downtown Prague, inserts a magic little device into a common pay phone and says, “Go secure.” He is now using an encrypted line on an existing network and that is exactly what Emulex OneSecure™ adapters allow you to do with your existing Fibre Channel networks. By integrating the Emulex OneSecure adapter’s hardware offload processing capabilities into its EMC® PowerPath® Encryption with RSA® as well as in its EMC CLARiiON® network storage and EMC Celerra® unified storage systems, IT managers can now easily deploy a complete security solution for Fibre Channel-connected hosts that encrypts data without sacrificing server performance, system uptime or stability for high workload data center environments.. We all know that there are dozens of compliance and regulatory reasons for having encryption in your storage network. Emulex and EMC just make it easy to protect the full data path and at a lower cost. That is the real difference with this new solution. As we all know, encryption solutions have been around for many years but in many cases they have often created more problems than they solve. Let’s look at the previous attempts:  Continue reading…

Posted in Uncategorized | No Comments

Willie Sutton was one of the most notorious bank robbers of the roaring 20’s, and according to legend, he was once asked, “Why do you rob banks?” To which he replied, “Because that is where the money is.”

I often find myself saying roughly the same thing when industry and financial analysts ask me “why go into the 10GbE market?” To which I reply, “Because that’s where the TAM (total available market) is.” We have presented the chart below at many financial and investor conferences. Some may argue about the overall numbers or the timeline of transition from Fibre Channel to Fibre Channel over Ethernet, but no one has fundamentally questioned the trajectory of the chart. This is perhaps the most important point a CEO can make. We are driving our business in a new direction because that’s where the money is going to be in the future.

Emulex is deeply committed to our core Fibre Channel business and we have already announced our first 16Gb/s Fibre Channel design win with IBM Power Systems. However, we are also driving wins in the new next convergence space and we are the only vendor to have design wins across all three network convergence protocols – IP, ISCSI and FCoE – and we have done this across a broad spectrum of server and storage OEMs. In the first four months of this year, we have announced new 10Gb/s Ethernet-based wins with EMC, Hitachi Data Systems, HP, IBM and NetApp and there are more to come. This market is gaining momentum because the fundamental value proposition for moving to a converged network based on 10Gb/s Ethernet makes sense and protects current investments. But if you need an outside opinion, ESG recently published a new paper that details why moving to one network makes business sense.

Posted in Uncategorized | 1 Comment

In the movie National Treasure, Nicolas Cage finds a pair of “spectacles” with three colored lenses that enable him to read the treasure map to the long- lost treasure. This is an apt description of what Emulex’s new OneCommand™ Vision software enables you to do. OneCommand Vision is the only tool in the industry for Fibre Channel and Fibre Channel over Ethernet (FCoE) networks that lets you see not only the full data path, but the data traffic flow. This is vital for quickly solving problems and maximizing server performance and availability.

Why is this important to IT managers? Because no one team owns the whole application infrastructure. We often hear customers of IT applications say that they “see” applications begin to slow down over time; the applications manager says things are fine, the networking specialist says things are fine and the storage specialist says things are fine, but in the aggregate, the final result is not what the service level agreement (SLA) should be. This creates a number of challenges for IT managers.
Continue reading…

Posted in Uncategorized | 1 Comment

I have spent a significant amount of time with the investor and analyst community over the past few weeks, and in case you didn’t notice, the market shifted in its stance on 10Gb/s Ethernet (10GbE), while many people were not looking. In talking to those who track Emulex, the tone has changed from whether 10GbE and network convergence will happen to when and how? The recent announcements we made with HP and IBM have changed the landscape and demonstrated that the IT world is shifting to the 10GbE side. As IBM, HP, Dell and Cisco drive hard toward fabric-based computing with 10GbE at the core, it is clear that the when of 10GbE is starting now and will be a sustained effort over the next three to four years. On the target side, we continue to see growth and interest in 10GbE iSCSI with new platforms from Dell, NetApp, EMC and other leading OEMs in the offering. The 10GbE market has started its transition; the train has left the station and is building momentum. Continue reading…

Posted in Uncategorized | No Comments