IBM Sells Mylex Division

Just Not "Core"

• By Chris McConnell
• 07/09/2002

LSI Logic Corp. purchased the assets of IBM Corp.’s Mylex division last week for an undisclosed sum. Mylex makes RAID controllers, subsystems, and supporting hardware and software.

According to IBM spokesperson Michael Loughran, IBM had recently refocused its Technology Group, of which Mylex was a member, on three core areas, high-end foundries, customs ASICs, and PowerPC processors.

As a player in the relatively mature storage subsystem business, Mylex, which IBM bought in September 1999, was no longer a strategic fit for the business unit. “The RAID controller business was not longer seen as core,” Loughran says.

In contrast, LSI, which offers a variety of chips for storage applications, believed Mylex offered products and engineering competencies that fit in LSI’s strategic vision. As an asset purchase, LSI bought the products, intellectual property, and engineering teams of Mylex it believed would help expand LSI’s reach. “We only bought the stuff we wanted,” says Mitch Seigle, senior marketing director at LSI’s LSI Storage Inc. division.

Both Mylex and LSI Storage target the midrange and entry-level of the storage subsystems market. LSI Storage is particularly interested in the Windows server market.

LSI will integrate about half of Mylex’ 290 employees into the organization and IBM will lay off the remaining members of the Mylex team. Seigle says Mylex products will be most likely rebranded as LSI products and the Mylex name will go by the wayside.

Seigle expects Mylex and its products will immediately improve LSI’s bottom line, saying that the division was profitable under IBM. IBM’s Loughran agrees, stating, “The Pro-Fibre products had been pretty successful for us.”