The Fibre Channel host bus adapter (HBA) market may be dominated by two companies, but the momentum of iSCSI as a low-cost alternative to Fibre Channel SANs is forcing the likes of Emulex and QLogic to bring costs down to remain competitive.
The prices of Fibre Channel HBAs, which are used to connect host computers to storage subsystems, have
Some experts believe Fibre Channel SANs will remain relatively expensive because HBA market leaders Emulex Corp. and QLogic Corp. understand that keeping prices high for as long as possible helps their bottom lines. Emulex, Costa Mesa, Calif., has taken the lion's share of the HBA market since analysis firms like International Data Corp. began tracking the technology in 1998.
But Mike Smith, executive vice president of worldwide marketing at Emulex, said that prices are coming down to earth, a trend that will make the reliability and performance benefits of Fibre Channel SANs available to small businesses.
"HBA pricing has been trending down since the beginning, and I think it's going to continue," he said. "Over the next year, we're going to [start showing up] in direct-attached and iSCSI storage environments."
Smith believes users will benefit from more "aggressive" and cost-effective HBA designs that could lead to Fibre Channel HBAs selling for less than $500 in the not-so-distant future.
Smith maintains that the advent of IP storage technology based on the iSCSI standard is not the overwhelming factor driving interest among small-business users.
"We're being pulled there by our customers and OEMs," he said. He says that Emulex has nothing to fear from iSCSI: "It will be deployed in lower-end applications that don't require performance."
Pricing for disk arrays and other storage technologies have been dropping at a rate of about 40% per year, but the exceptions to that trend have been Fibre Channel switches and HBAs. Arun Taneja, founder and consulting analyst for the Taneja Group, said that switch and HBA prices are trending down at about 10% per year.
"The reason for that is that, in the Fibre Channel community, switches, directors and HBAs have not had pure competition," Taneja said.
Taneja called the HBA market an oligopoly, dominated by Emulex and QLogic. He said the switch market has begun to correct itself because of the emergence of Cisco Systems Inc. as a serious challenger to incumbent leaders Brocade Communications Systems Inc. and McData Corp., causing price drops and "spoiling the party."
Other than JNI Corp., a subsidiary of Applied Micro Circuits Corp. that banks on its OEM relationship with Sun Microsystems Inc. to stay in the HBA race, no new players have emerged. But the rollout of easy-to-use, low-cost iSCSI-based storage products might be having the same effect by forcing Emulex to develop affordable HBAs for the little guy.
"There's uncharted territory for Fibre Channel that Emulex should be targeting. If they don't target the low end proactively, iSCSI will take that business away from them," Taneja said. He added that iSCSI won't dominate 100% of the entry-level SAN market, but iSCSI is a very strong variable that's changing the thinking in the market.
"Frankly, if iSCSI wasn't getting the traction that it is, there would still be some incentive for Fibre Channel [vendors] to want to penetrate smaller companies, but it wouldn't be quite as strong as it is right now," Taneja said.
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