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Adaptec Takes Action: Page 2 of 3

Solid earnings, new acquisition, new products highlight campaign to grab next storage rung
January 28, 2004

Adaptec isn't alone in citing the need for virtualization technology as a driver for acquisitions. EMC Corp. (NYSE: EMC) purchased VMware (NYSE: EMC) last month, and Veritas Software Corp. (Nasdaq: VRTS) bought Ejasent three weeks ago (see EMC Gobbles VMware and Veritas Nabs Ejasent). Stephens said Elipsan’s technology will help customers manage data between Adaptec RAID systems.

Adaptec concedes that the buzzword "virtualization" hasn't been firmly nailed down. “Storage virtualization is probably one of those overused and misapplied terms,” Stephens said. “It is a technology designed to simplify network management.”

He said Elipsan, which has 20 employees, should start generating revenue for Adaptec this quarter. Even with the Elipsan employees, Adaptec CFO Marshall Mohr said the company will likely reduce headcount over the next year and migrate engineering jobs from the U.S. to India.

New iSCSI products: While Adaptec has made iSCSI adapters for awhile, its next product rollout will be external storage devices based on iSCSI. Included in the rollout, expected later this week, are the following:

  • iSA1500 Storage Array This is an iSCSI unit with four SATA disk drives, designed to replace direct-attached storage in small companies (up to 100 employees), midsized businesses (up to 1,000 employees), and remote branch offices. It has two 1-Gbit/s Ethernet ports. Prices start at about $10,000.
  • FS4500 and FS4100 Storage Arrays Despite its emphasis on the IP SAN market, Adaptec spokespeople say Fibre Channel remains a force to be reckoned with. These two host-based arrays are meant for FC SANs and feature SATA disks for reference content that's not frequently accessed. The FS4100 has no RAID and starts at about $9,600. The FS4500 is a RAIDed system. A second generation of both products will feature a serial-attached SCSI interface in the second quarter of 2004.
  • 2810SA and 2161SA Serial ATA RAID Controllers These are 8- and 16-port SATA RAID cards, priced at $590 and $895, for server OEMs and distributors. Adaptec hopes to add internal serial-attached SCSI versions by the end of 2004.

Despite ongoing support of Fibre Channel, Adaptec is clearly basing its future on IP. During his call with analysts, Stephens remarked, "We expect acceptance of our iSCSI-to-serial-ATA RAID storage arrays to drive increased demand for our iSCSI host bus adaptors, which customers will demand as their performance needs grow."

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