QLogic to Acquire Ancor

The bane of SAN deployment has been a lack of standardization between components from different vendors. Users have little assurance that their switches, hubs, and host bus adapters will be compatible, unless all parts are purchased together. A recent merger announcement, however, could lead to greater standardization.

QLogic Corp. (www.qlogic.com), which leads the world in host bus adapter shipments according to IDC (www.idc.com), announced May 8 that the company plans to acquire Ancor Communications Inc. (www.ancor.com). Ancor is a supplier of SAN switches.

With Ancor, QLogic will be able to expand its Fibre Channel line, adding more switches to its roster of products.

"There’s too many vendors with a lot of point products," says Skip Jones, director of marketing at QLogic. There are currently no vendors that supply a complete line of SAN products, although system integrators offer complete solutions with a fair assurance of interoperability. "There’s not a lot of vendor consolidation anywhere," Jones says.

In addition to host bus adapters, QLogic also supplies controller chips for hard drives and RAID controllers. With the acquisition of Ancor, Jones says, QLogic is making its first foray in connecting the nodes.

The lack of SAN standardization is often cited as a barrier to broad adoption of the technology. Jones suggests, however, that time and vendor consolidation will aid standardization. "It’s pretty typical in any industry in the real early stages," Jones says, adding that the acquisition will spur the maturity of the SAN market.

"We take a very open approach in the first place," Jones says. He feels that the proprietary nature of SANs is a function of the novelty of the technology, not because QLogic or other vendors are interested in creating market dominance through uninteroperable systems. There just has not been enough time to sort out all the issues.

The acquisition should be completed by September, pending approval by stockholders. Under the terms of the agreement, QLogic will exchange 0.5275 shares of common stock for each share of Ancor common stock. The merger is estimated at about $1.7 billion.

Ancor's CEO Ken Hendrickson will be nominated to serve on QLogic's board of directors.