Intel is well known for its consumer PC chips and for its business solutions, which defined the Wintel era. Intel also has a strong networking portfolio. Long a dominant player in the adapter/LOM space, Intel has been aggressively expanding its position to adjacent technologies. Last year, Intel acquired merchant silicon vendor Fulcrum Microsystems and today announced that it is acquiring QLogic’s InfiniBand business. The acquisition is for $125M in cash; QLogic originally acquired the InfiniBand technology as a $60M purchase of SilverStorm in 2006 [Update: and $109M on PathScale also in 2006]. Mellanox is the market leader in InfiniBand, and it added Ethernet to its portfolio last year.
Despite Cisco’s efforts to eliminate the InfiniBand market – it bought Topspin in 2005 for $250M and subsequently ended support of those solutions – the IB market is still doing well in the HPC marketplace. Intel has been making a push into the HPC market and InfiniBand solutions are an important piece to broaden Intel’s ability to meet customer requirements in this space.
This acquisition is not negative on QLogic’s position in the marketplace. From the product set that QLogic offers, FC and Ethernet have obvious overlaps, while InfiniBand has a different sales, marketing and partner engagement. QLogic can stay focused on its core storage networking strength rather than being distracted by a battle with Mellanox in the HPC market. It looks like a good move for both QLogic and Intel.