The Fall of Fibre Channel: Page 8 of 16

Remember: IP storage technology won’t be new then. Network managers will
have used it, and learned to trust it. This means that when 10-Gbit/s
arrives Fibre Channel vendors will have to compete against it without help
from their best friend, Mr. FUD (fear, uncertainty, and doubt). Worse, they
will be up against vendors offering all of the generic benefits of IP and
Ethernet technology (interoperability, low cost, ease of use,
manageability). Which of course, they can’t do, because their Fibre Channel
products will still be proprietary, expensive, hard to use, and as
manageable as your average kindergarten class.

For now, as we’ve noted, Fibre Channel enthusiasts still have some run time before them. The technology’s not imminently due to join Wayne & Schuster, Earth Shoes, and the Third International in the Dustbin of History. In fact, it’ll probably remain with us indefinitely in a gradually diminishing role. Think of the Royal Family. Or lava lamps...

Where does all this leave the vendors? Obviously, IP storage represents a
huge opportunity for companies like Cisco and Intel Corp. (Nasdaq: INTC). Qlogic also stands to
do well, if it can continue to steal away Brocade’s Fibre Channel market
share while simultaneously selling arms to both sides (Fibre Channel and IP)
in the technology war (see QLogic Sees Good Times).

But overall, this technology transference will result in a lot more losers
than winners. While the long-term prospects for IP storage are good, an
influx of too much VC capital has meant that too many startups have started
pursuing this market too early. In fact, the shakeout has already started.

(For more, tune into the continuing adventure series: Things Getting Grim at Entrada, Disaster for Entrada? , Entrada Faces Its Demons, and – who could forget? – Entrada's Last Gasp?)