Two technologies have made the quantum speed leaps in high-performance computing possible. One is the rapid ascent of commercial, off-the-shelf (COTS) processors that made computing speed cheaper. The second is InfiniBand (IB), the switching technology that Sun Microsystems helped evolve into a fabric - the underlying infrastructure of a carrier-grade cloud.

Today, after an on-again, off-again relationship with InfiniBand that stretches back to its very beginning, Intel is back in the networking fabric business in a big way. With as big a message of "we're back" as you can send, the company has agreed to purchase the InfiniBand production assets, along with many of the employees, of QLogic. Analysts estimate the company to be the #2 player in the InfiniBand switch market with over one-fourth the global market. The deal has a reported value of $125 million.

You know Intel's hurting as a company whenever it sheds its assets in the networking department. Back in 2003, Intel found itself cancelling a once-promising project to build semiconductors for InfiniBand switching, the ultra-high-speed switching fabric it helped create with Sun Microsystems. During its 2006 reorganization, it first sold its IXP handheld network processor division to Marvell, then sold its optical networking systems division to Cortina.

A diagram of the components of an InfiniBand-switched network. [Courtesy QLogic]


Consequently, you know Intel's on a healing streak when it gets back into networking in a big way. QLogic itself will not be acquired in this transaction. It appears the company will scale down, focusing more on producing device controllers and bus adapters. QLogic is believed to have more than half the market in Fibre Channel (FC) adapters, though its share of the switch market is significantly lower.

Signs of a warm relationship between Intel and QLogic began appearing in 2008, when Intel began sponsoring QLogic's "test track" facility for testing Intel processors on QLogic's fabric. The facility was made available for hardware makers and high-performance software developers to experiment with new configurations for InfiniBand switches and COTS processors - a technology that was about to go through the roof. The following year, the two companies declared themselves officially "allied."

Analysts soon saw that time as an opportunity for the then-#1 player in the IB switch market, Voltaire, to acquire QLogic outright. But last February, #2 player Mellanox acquired Voltaire whole for $208 million, giving the new company almost 60% market share in InfiniBand switches.

The question on investors' minds had become whether QLogic could compete. Just last September, it put everything it had toward one last, big market push, completely overhauling its IB and FC product lines for what it called its "Adaptive Convergence" strategy. That's where the company produces bus adapters and network adapters on the same chip. Analysts believe the strategy should keep QLogic ahead in the Fibre Channel market, though it did try to string InfiniBand along by tying the umbrella branding to a new line of IB switches as well.

Intel may have played its hand very smartly, acquiring a reputable production firm for what, for Intel, counts as a song - about 21% of QLogic's annual revenue for 2011. If anyone can compete with Mellanox using a QLogic product line, it's Intel.


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