Emulex will buy rival Sierra Logic for $180 million to expand its position in the embedded storage components market.
The acquisition will combine the two suppliers of network storage components and may improve the reliability of storage networks that enterprise customers depend on.
Sierra's line of embedded bridges and routers will join Emulex's portfolio of embedded switches and multiple protocol input/output controllers. The combination will make Emulex more competitive in selling to storage system makers, said Emulex' marketing VP Mike Smith. Its current customers include Sun, Hitachi and Network Appliance.
"There is always a trend toward integration, and you can offer more integrated solutions the more pieces you provide. It makes you more of a single, trusted supplier," Smith said.
The deal gives Emulex access to key technology developed by Sierra Logic to make SATA storage systems more reliable, said storage industry analyst Arun Taneja, founder of The Taneja Group. Fibre Channel disk drives are used in high-end storage environments, while SATA drives are a lower cost alternative. But SATA drives are less reliable than Fibre Channel. Sierra Logic's technology makes SATA more reliable, Taneja said.
"Sierra makes a SATA drive look like a Fibre Channel drive but maintains the price advantage of SATA," said Taneja. "Emulex looked at the technology and said 'it's too important to this industry. I want to own it'."
Following this integration strategy, in May Emulex also acquired Arohi Communications, a maker of data center networking and intelligent storage platforms, for $39 million. Smith said he expects to take on "most" of Sierra Logic's 70 staff.
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