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QLogic buys Troika for virtualization chip

QLogic has acquired Troika for $36.5M in cash, which it claims will speed up OEM development of entry-level and midrange virtualization products.

QLogic Corp. has acquired virtualization chip maker Troika Networks Inc. for $36.5 million in cash, a move it maintains will speed up OEM development of entry-level and midrange virtualization products.

The Fibre Channel host bus adapter and switch giant is hoping that Troika's split-path architecture chip in its Accelera intelligent switch appliance will be used by storage system manufacturers to build lower cost virtualization products.

"OEMs are seeing a need for virtualization solutions tailored to … small and midsized enterprises," said H.K Desai, president and CEO of QLogic, in a statement to the press. He added that QLogic will provide the virtualization building blocks but will leave OEMs to add on "the software of their choice."

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According to Steve Duplessie, founder and analyst of the Enterprise Strategy Group, Troika's chip can move data really fast while also applying intelligence to that data, in the form of virtualization. "Other guys are talking about having to buy a big, expensive, mega honking switch in order to run virtualization," he said.

"QLogic is an odd player," said Arun Taneja, founder and analyst of the Taneja Group. "The difference is their focus on the low end. A purpose-built appliance gives QLogic an opportunity to keep the cost of their switches low. .. this is a less expensive approach than building … directors with intelligence."

QLogic's vice president of marketing, Frank Berry, agreed that the virtualization products being sold today are based on "big, sophisticated, chassis-based solutions" from Cisco Systems Inc. and Brocade Communications Systems Inc. He's most likely referring to EMC Corp.'s Invista product, formerly called Storage Router, which was launched in May.

By its own admission, EMC has said that Invista is limited to large shops and its price tag of $225,000 is proof of that. It's possible QLogic is hoping to fill the hole in EMC's portfolio for a lower cost virtualization offering. In addition, Invista is limited to data migration across arrays while Troika's box can also perform remote replication, snapshots and virtual volume management.

"Users don't want to bet the farm up front on network-based storage intelligence -- and Troika gives them a way to stick their toes in the water without drowning," Duplessie said. "The cost/risk comparison between a Cisco-plus software solution and a Troika/StoreAge solution is night and day." Troika partnered with StoreAge Networking Technologies Inc. for storage services.

"Troika to QLogic has the opportunity to be what Vixel [Corp.] became at Emulex [Corp.] -- a big business in a soon to be emerging market," Duplessie concluded.

Besides EMC, Hewlett-Packard Co. (HP) is another possible candidate for Troika's technology. HP is on a roll signing up OEM partners these days but has had no luck building a virtualization product. The company acquired virtualization appliance maker StorageApps for $350 million in 2001, but the resulting product was killed after HP lost a patent infringement case against EMC.

Founded in 1998, Westlake Village, Calif.,-based Troika raised a total of $81.3 million in funding with the most recent round of $14.4 million secured in July. Anthem Venture Partners is the lead investor in Troika and advised the company on the transaction.


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