By David Gross
InfiniBand IC supplier Mellanox announced today that it acquiring long-time customer, and fellow Israeli InfiniBand technology developer Voltaire. The acquisition price of $8.75 a share represents a more than 35% premium over Friday's close of $6.43, and is net of $42 million of cash held by Voltaire. Mellanox is financing the deal entirely out of its cash balance of $240 million.
Mellanox is down 4% on the news to $24 a share, while Voltaire is up 34% to $8.65, leaving very limited room for risk arbitrage on the deal.
While both companies have gotten into the Ethernet market over the last two years, the deal only makes sense in the context of InfiniBand, which as a niche technology, does not offer a chip supplier billions of ports over which to amortize development costs. Mellanox already offers both ICs and adapter cards. Moreover, and very importantly, InfiniBand switches are low cost, low memory, high performance boxes with stripped down operating systems and forwarding tables. The intellectual property router and Ethernet switch makers put into system design and network O/S is less valuable here as a result. The message acceleration software and management tools associated with InfiniBand devices require far less R&D than new ASICs or network operating systems for high-end, modular Ethernet switches.
What's likely to happen here is Wall Street will do its usual fretting over whether the proposed operating cost reductions will be achieved, which in this case are $10 million, whether the price is reasonable, and what customers will think. Additionally, at least 30 hedge fund managers are likely to ask the same questions on the strategic impact of owning switches, InfiniBand vs. Ethernet, and will seek "more color" on how the integration is going. But none of this will really matter. The key to success here will be the extent to which the new company focuses on InfiniBand. Outside of bridging products and maybe 40G NICs, there new company needs to stay out of the Ethernet market, which already has enough suppliers, and treat Fibre Channel-over-Ethernet as the toxic technology it already has proven to be for Brocade.
Showing posts with label VOLT. Show all posts
Showing posts with label VOLT. Show all posts
Monday, November 29, 2010
Tuesday, November 2, 2010
Force10 Announces 40 Gigabit Ethernet Top-of-Rack Switch and Line Card
By David Gross
Extreme and BLADE Networks announced the launch of their 40 GigE ToR switches a few weeks ago, and now you can add Force10 to the list of vendors selling the devices. The company announced a new Top-of-Rack switch today, the S4810, which features 4 40 GigE uplinks, and will be available for sale by year-end. But Force10 didn't stop with the ToR switch news, it also announced a 40 GigE line card for its Exascale core switch.
IBM currently re-sells Force10's S60 ToR device, but the company did not say if the S4810 would be included in the IBM resale program. It did say that it would offer lower power consumption than BLADE's RackSwitch, which was an important statement, because it means that unlike ToR switches with Voltaire, Juniper, and other company's logos on them, the S4810 is NOT an OEM of the BLADE RackSwitch.
Unlike Extreme and BLADE, Force10 did not publicly announce pricing for its 40G ports, but the other vendors are charging around $1,000 per port on their ToR switches. But these are for short-reach links. Longer reach 40GBASE-LR4 ports will be much more expensive when they come to market, and 40 Gigabit OC-768 ports on routers cost half a million dollars, or 500x a 40GBASE-CR4 switch port. Meanwhile, 40 Gigabit QDR InfiniBand ports now sell for under $300, with similar short-reach QSFP links as the Ethernet boxes. Ultimately, with values between $250 and $500,000, you can't really say there is such a thing as a price for a 40 Gigabit port, but rather a price based on transceiver type, port density, and most importantly, link length.
Extreme and BLADE Networks announced the launch of their 40 GigE ToR switches a few weeks ago, and now you can add Force10 to the list of vendors selling the devices. The company announced a new Top-of-Rack switch today, the S4810, which features 4 40 GigE uplinks, and will be available for sale by year-end. But Force10 didn't stop with the ToR switch news, it also announced a 40 GigE line card for its Exascale core switch.
IBM currently re-sells Force10's S60 ToR device, but the company did not say if the S4810 would be included in the IBM resale program. It did say that it would offer lower power consumption than BLADE's RackSwitch, which was an important statement, because it means that unlike ToR switches with Voltaire, Juniper, and other company's logos on them, the S4810 is NOT an OEM of the BLADE RackSwitch.
Unlike Extreme and BLADE, Force10 did not publicly announce pricing for its 40G ports, but the other vendors are charging around $1,000 per port on their ToR switches. But these are for short-reach links. Longer reach 40GBASE-LR4 ports will be much more expensive when they come to market, and 40 Gigabit OC-768 ports on routers cost half a million dollars, or 500x a 40GBASE-CR4 switch port. Meanwhile, 40 Gigabit QDR InfiniBand ports now sell for under $300, with similar short-reach QSFP links as the Ethernet boxes. Ultimately, with values between $250 and $500,000, you can't really say there is such a thing as a price for a 40 Gigabit port, but rather a price based on transceiver type, port density, and most importantly, link length.
Voltaire Revenue Up 25% to $18.1 Million, But Says "Ethernet" More than "InfiniBand"
By David Gross
Voltaire reported quarterly revenue yesterday of $18.1 million, up from $14.5 in the year ago quarter. The company also said annual revenue would come in near the top end of its previously issued guidance of $67-70 million.
The company is a leader in InfiniBand switch systems, but like its supplier Mellanox, is very eager to show that it's hedging its bets with Ethernet. Reading through the call transcript on Seeking Alpha, I counted seven mentions of "Ethernet" excluding the Q&A, and just three mentions of "InfiniBand", the technology Voltaire's long been associated with.
InfiniBand continues to gain share in supercomputing, and is used as the interconnect in 207 of the top 500 supercomputers, up from 121 two years ago, according to Top500.org. Yet Voltaire, Mellanox, and the InfiniBand Trade Association they're both affiliated with are terrified of being considered "niche" vendors, so they've released Ethernet products, in addition to developing InfiniBand-over-Ethernet, a.k.a. RDMA over Converged Ethernet, in spite of InfiniBand's strength.
Nonetheless, Voltaire's Ethernet strategy is fairly focused, and like the Juniper EX2500, its top-of-rack 6024 switch appears to be an OEM of the Blade RackSwitch G8124. But while the talk/actual-percent-of-revenue ratio is way out of line with cloud services, Ethernet's strength with PR people is far more impressive, especially considering that it's older than many of them are.
Voltaire reported quarterly revenue yesterday of $18.1 million, up from $14.5 in the year ago quarter. The company also said annual revenue would come in near the top end of its previously issued guidance of $67-70 million.
The company is a leader in InfiniBand switch systems, but like its supplier Mellanox, is very eager to show that it's hedging its bets with Ethernet. Reading through the call transcript on Seeking Alpha, I counted seven mentions of "Ethernet" excluding the Q&A, and just three mentions of "InfiniBand", the technology Voltaire's long been associated with.
InfiniBand continues to gain share in supercomputing, and is used as the interconnect in 207 of the top 500 supercomputers, up from 121 two years ago, according to Top500.org. Yet Voltaire, Mellanox, and the InfiniBand Trade Association they're both affiliated with are terrified of being considered "niche" vendors, so they've released Ethernet products, in addition to developing InfiniBand-over-Ethernet, a.k.a. RDMA over Converged Ethernet, in spite of InfiniBand's strength.
Nonetheless, Voltaire's Ethernet strategy is fairly focused, and like the Juniper EX2500, its top-of-rack 6024 switch appears to be an OEM of the Blade RackSwitch G8124. But while the talk/actual-percent-of-revenue ratio is way out of line with cloud services, Ethernet's strength with PR people is far more impressive, especially considering that it's older than many of them are.
Monday, August 2, 2010
Revenue Growth Slowing for Data Center Technologists
While data centers continue to defy the economy, revenue growth is clearly slowing down for the technology suppliers. Sequential rates have been much lower on an annualized basis than Year-over-Year growth rates, and the 2nd quarter typically gets a rebound off the 1st quarter lull. Mellanox (MLNX) reported strong sequential growth, but guided down for the next quarter, and VMWare (VMW), which is majority owned by EMC (EMC) stated that license revenue would be flat.
I'll have another post with the service providers after Rackspace (RAX) reports, but the trend looks similar there - with growth continuing, but at a slowing pace.
Y/Y Rev Growth Sequential Sequential
Rev Growth Rev Growth Inventory Growth
MLNX 58% 10% -3%
VOLT 54% 7% -14%
QLGC 16% -2% 26%
FFIV 46% 12% 8%
EMC 24% 3% -4%
I'll have another post with the service providers after Rackspace (RAX) reports, but the trend looks similar there - with growth continuing, but at a slowing pace.
Y/Y Rev Growth Sequential Sequential
Rev Growth Rev Growth Inventory Growth
MLNX 58% 10% -3%
VOLT 54% 7% -14%
QLGC 16% -2% 26%
FFIV 46% 12% 8%
EMC 24% 3% -4%
Thursday, July 29, 2010
I/O Virtualization vs. Fibre Channel over Ethernet
by David Gross
Somehow vendors always want to converge networks just when IT managers are finding new applications for existing technologies. This results in new products banging against unintended uses for established technologies. In turn, vendors create new “convergence” tools to pull everything back together, which then bump up against the IT managers' new applications, and the cycle repeats. This has been a pattern in data networking for at least the last 15 years, where vendor visions of one big happy network have kept colliding with the operating reality of a network that keeps diverging and splitting into new forms and functions. If reality had played out like vendor PowerPoints of years past, we'd all have iSCSI SANs incorporated into IPv6 based-LANs, and Fibre Channel and InfiniBand would be heading to the history books with FDDI and ATM.
Like previous attempts to force networks together, current attempts to do so require expensive hardware. As I pointed out a couple of weeks ago, Fibre Channel over Ethernet looks good when modeled in a PowerPoint network diagram, but not so great when modeled in an Excel cost analysis, with its CNAs still topping $1,500, or about 3x the cost of 10 Gigabit Ethernet server NICs. But this is not the only way to glue disparate networks together, I/O Virtualization can achieve the same thing by using an InfiniBand director to capture all the Ethernet and Fibre Channel traffic.
I/O Virtualization can offer a lower cost/bit at the network level than FCoE, because it can run at up to 20 Gbps. However, I/O Virtualization directors are more expensive than standard InfiniBand directors. Xsigo's VP780, sold through Dell, sells for around $1,000 per DDR port, while a Voltaire (VOLT) 4036E Grid Director costs about $350 per faster QDR port. But this could change quickly once the technology matures.
One major difference in the configuration between standard InfiniBand and I/O Virtualization is that a typical InfiniBand director, such as a Voltaire 4036E, bridges to Ethernet in the switch, while Xsigo consolidates the I/O back at the server NIC. The cost of the additional HCA in the standard InfiniBand configuration is about $300 per port at DDR rates and $600 per port at QDR rates. A 10 Gigabit Ethernet server NIC costs around $500 today, and this price is dropping, although there is some variability based on which 10 Gigabit port type is chosen – CX4, 10GBASE-T, 10 GBASE-SR, etc. Either way, while it saves space over multiple adapters, the I/O Virtualization card still needs to cost under $800 at 10 Gigabit to match the costs of buying separate InfiniBand and Ethernet cards. Moreover, the business case depends heavily on which variant of 10 Gigabit Ethernet is in place. A server with mutliple 10GBASE-SR ports is going to offer a lot more opportunity for a lower cost alternative than one with multiple 10GBASE-CX4 ports.
I/O Virtualization can eliminate the practice of one NIC or HBA per virtual machine in a virtualized environment. However, the two major buyers of InfiniBand products, supercomputing centers and financial traders, have done little with server virtualization, and therefore don't stand to benefit greatly from I/O Virtualization.
While there is growing interest in I/O Virtualization, it runs the risk of bumping into some of the cost challenges that have slowed Fibre Channel over Ethernet. Moreover, industries like supercomputing and financial trading are sticking mostly to diverged hardware to obtain the best price/performance. Nonetheless, I/O Virtualization could offer an opportunity to bridge networks at the NIC level instead of at the switch, while still getting some of the price/performance benefits of InfiniBand.
Somehow vendors always want to converge networks just when IT managers are finding new applications for existing technologies. This results in new products banging against unintended uses for established technologies. In turn, vendors create new “convergence” tools to pull everything back together, which then bump up against the IT managers' new applications, and the cycle repeats. This has been a pattern in data networking for at least the last 15 years, where vendor visions of one big happy network have kept colliding with the operating reality of a network that keeps diverging and splitting into new forms and functions. If reality had played out like vendor PowerPoints of years past, we'd all have iSCSI SANs incorporated into IPv6 based-LANs, and Fibre Channel and InfiniBand would be heading to the history books with FDDI and ATM.
Like previous attempts to force networks together, current attempts to do so require expensive hardware. As I pointed out a couple of weeks ago, Fibre Channel over Ethernet looks good when modeled in a PowerPoint network diagram, but not so great when modeled in an Excel cost analysis, with its CNAs still topping $1,500, or about 3x the cost of 10 Gigabit Ethernet server NICs. But this is not the only way to glue disparate networks together, I/O Virtualization can achieve the same thing by using an InfiniBand director to capture all the Ethernet and Fibre Channel traffic.
I/O Virtualization can offer a lower cost/bit at the network level than FCoE, because it can run at up to 20 Gbps. However, I/O Virtualization directors are more expensive than standard InfiniBand directors. Xsigo's VP780, sold through Dell, sells for around $1,000 per DDR port, while a Voltaire (VOLT) 4036E Grid Director costs about $350 per faster QDR port. But this could change quickly once the technology matures.
One major difference in the configuration between standard InfiniBand and I/O Virtualization is that a typical InfiniBand director, such as a Voltaire 4036E, bridges to Ethernet in the switch, while Xsigo consolidates the I/O back at the server NIC. The cost of the additional HCA in the standard InfiniBand configuration is about $300 per port at DDR rates and $600 per port at QDR rates. A 10 Gigabit Ethernet server NIC costs around $500 today, and this price is dropping, although there is some variability based on which 10 Gigabit port type is chosen – CX4, 10GBASE-T, 10 GBASE-SR, etc. Either way, while it saves space over multiple adapters, the I/O Virtualization card still needs to cost under $800 at 10 Gigabit to match the costs of buying separate InfiniBand and Ethernet cards. Moreover, the business case depends heavily on which variant of 10 Gigabit Ethernet is in place. A server with mutliple 10GBASE-SR ports is going to offer a lot more opportunity for a lower cost alternative than one with multiple 10GBASE-CX4 ports.
I/O Virtualization can eliminate the practice of one NIC or HBA per virtual machine in a virtualized environment. However, the two major buyers of InfiniBand products, supercomputing centers and financial traders, have done little with server virtualization, and therefore don't stand to benefit greatly from I/O Virtualization.
While there is growing interest in I/O Virtualization, it runs the risk of bumping into some of the cost challenges that have slowed Fibre Channel over Ethernet. Moreover, industries like supercomputing and financial trading are sticking mostly to diverged hardware to obtain the best price/performance. Nonetheless, I/O Virtualization could offer an opportunity to bridge networks at the NIC level instead of at the switch, while still getting some of the price/performance benefits of InfiniBand.
Wednesday, July 28, 2010
Voltaire Revenue Up 7% Sequentially, 54% Year-over-Year
InfiniBand switch maker Voltaire (VOLT) reported quarterly revenues this morning of $16.6 million, a 54% increase from its 2nd quarter of 2009, and it reaffirmed guidance of $67-70 million for 2010 revenue, reassuring investors who were spooked by Mellanox's (MLNX) downward guidance revision last week.
While it is making every effort to play nice with Ethernet, the company was one of the first to release QDR InfiniBand director and switch ports, which has helped its revenue reverse course off a downward trend it hit during 2008 and 2009.
While it is making every effort to play nice with Ethernet, the company was one of the first to release QDR InfiniBand director and switch ports, which has helped its revenue reverse course off a downward trend it hit during 2008 and 2009.
Monday, June 28, 2010
Tokyo Institute of Technology Deploying Voltaire InfiniBand Switches
InfiniBand continues to hold firm in its supercomputing and financial trading niches, with Tokyo Institute of Technology rolling out Voltaire's (VOLT) 40 Gigabit switches in its 1,400 node TSUBAME 2.0 supercomputer. The deployment includes over 4,000 edge switches and 18 director switches.
With prices as low as $400 per 40G port, these short-reach InfiniBand platforms continue to serve a niche in low latency apps where many predicted Ethernet would take over. While 40/100 Gigabit Ethernet was ratified last week, the traditional data center market is still a few years away from mass 40 or 100 gigabit deployments with either protocol.
disclosure:no positions
With prices as low as $400 per 40G port, these short-reach InfiniBand platforms continue to serve a niche in low latency apps where many predicted Ethernet would take over. While 40/100 Gigabit Ethernet was ratified last week, the traditional data center market is still a few years away from mass 40 or 100 gigabit deployments with either protocol.
disclosure:no positions
Subscribe to:
Posts (Atom)