Wow!! the HP Cisco war that we were the first to report is showing some movement and shaking up the pecking order of the industry. Just earlier in the week HP announced the new Virtual Connect Flex Fabric architecture and now they are announcing a big convergence innovation with emerging datacenter brand QLogic.

HP and QLogic are announcing a new Fibre Channel over Ethernet (FCoE) switching ASIC that will change the landscape around fully converged devices. I’m talking about the collasping of the datacenter, mulitprotocol on one board, integrated stacks, infrastructure as a service (aka cloud), and the movement toward the datacenter operating system.

I spent last night reviewing HP’s new FlexFabric and was impressed by the concepts.  I was somewhat skeptical on Twitter saying “lets see the meat on the bone”. Then I saw today’s QLogic announcement and the design win for the FCoE Switch ASIC which sheds some light on the power of HP Virtual Connect gear.  It’s the meat on the hype-bone from HP and QLogic.

Here is what made me fall out of my chair when I saw the news this morning.  As I said  in previous blog posts this little FCoE stuff is a small piece in the big cloud puzzle and QLogic is making some moves.   QLogic, a relatively small company, now has a big piece of the big puzzle and it’s code name was “bullet” a converged FCoE switch on a chip supporting multi-protocol on the board.

This is a new way to approach datacenter networking and HP’s new Virutal Connect FlexFabric architecture combines advanced, standards-based networking technologies with a new modular architecture that optimizes a full range of virtualization capabilities.

No One Has This Level Of Convergence – Game Changer for HP QLogic
This new ASIC from QLogic is used in the new HP Virtual Connect FlexFabric 10Gb/24-port module for HP’s industry leading BladeSystem platform.

As a key element of HP’s Converged Infrastructure, the HP Virtual Connect FlexFabric module is the only blade interconnect that combines network convergence with I/O virtualization and wire-once connection management. It converges Ethernet, Fibre Channel and iSCSI onto a common fabric, combined with the unique capability to allocate 10Gb network bandwidth across 8 connections per each dual port FlexFabric Adapter. This innovation enables businesses to consolidate their network access equipment at the server edge by up to 95 percent, reducing infrastructure acquisition and operating costs while also improving management.

What This Means
Earlier in the year we broke the news of the HP Cisco divorce and discovered QLogic. The HP Cisco battle has enabled this previously unknown company in QLogic to jump to the head of the pack in the new datacenter marketplace and has catapulted QLogic from once competing in a niche, soon to be declining network card market with Emulex to taking on the next biggest player in switches, Brocade, head on.

The QLogic Brocade competition is interesting in that Brocade has operated without any competition for years in the Fibre channel and FCoE switching market. They have been virtually untouched, with top market share. Now QLogic punches Brocade in the nose with this big HP design win.

Bigger Picture – The Datacenter Operating System

The datacenter is a battleground for new models. In particular one that is very trendy right now is the optimization of components in the datacenter to construct a datacenter operating system.

The future datacenter vision is similar to how original computer and network systems were designed – think a sort of datacenter operating system. The big vision and opportunity is “Can the future large scale datacenter system take on an innovation cycle similar to Moore’s Law?”  Specifically how the paradigm for systems and board design systems can be applied holistically to designing networks and datacenters.  Some of our SiliconANGLE analysts call this “Wire Once”.

QLogic is hitting a home run with this chip because they are collasping the device down and ultimately reducing the datacenter footprint which translates into higher performance and reduced hassles for network and IT managers.  HP and QLogic are really on to the future of the datacenter.  Creating an integrated model holistically that breaks down the “old silos” is very compelling and very disruptive.  They did this by integrating cross functional disciplines in software, hardware, configuration, automation, virtualization, multiple protocols, and so on into one operating device.  Truly game changing.

Competitive Impact

HP QLogic news is a big blow to Cisco on the innovation side and a major blow to Brocade on the business side. In the old Fibre channel market this really has no impact to Emulex in that Emulex doesn’t have a dog in this fight – Emulex doesn’t make switches and according to industry analysts Emulex is busy tweaking its business model.

HP brings QLogic into the mainstream with a compelling switch opportunity and new growth areas in converged enterprise and more exciting cloud computing. From QLogic’s perspective they completely blow past Emulex and take on Brocade head on.  Brocade announced their new convergence strategy a few weeks ago thus taking on Cisco more directly.

From a strategy perspective Brocade has the classic “stuck in the middle” competitve strategy issue.  This means that Brocade isn’t sure if they are competing with or partnering with HP. From this HP design win for QLogic it’s clear what HP thinks – Brocade used to be the supplier of choice for switching technology to HP for Fibrechannel and recently Brocade announced intention to compete aggressively in converged switches. QLogic’s design win puts a damper in Brocades plans with HP.

Breaking Down HP’s New Capability With QLogic’s New Converged ASIC
From a technology standpoint – the big piece is that they have more flexibility built into the switch than anyone in the business could have thought would be possible in 2010. They have 8 ports – 4 ports are fixed 10GbE and 4 ports can be 10GbE OR FC (and it’s flexible how they deploy). This means that customers can buy today for existing LAN + SAN (FC) configurations and upgrade in the future to all Ethernet (FCoE, iSCSI, NAS) with no lost ports or even rewiring (truly wire once that spans protocols – not just Ethernet).

Today there are no HBAs/CNAs or storage arrays that can do this – but it’s great investment protection.

On the business side – Brocade is the loser here. Brocade is #1 in FC and here is a product that allows for continued FC or migration to Ethernet backed by one of the largest SAN suppliers (historically HP is #1 or #2 in SAN with EMC being the other top player).

Brocade is quickly becoming increasingly less strategic to HP. Brocade has Ethernet switches that compete with HP ProCurve and 3COM switches in areas such as the Enterprise, SMB, and Edge and Core Routing. Clearly, the acquisition of Foundry Networks is costing Brocade opportunities at HP.

First HP dumps Cisco for QLogic FC stackable switches and puts Brocade on notice. With this QLogic deal Brocade has to really start wondering about their future business at HP. Brocade -despite having FCoE switches in the market for over a year–is NOT selected to provide the enabling FCoE technology for HP Virtual Connect FlexFabric. Instead, HP selects QLogic, which demonstrates how Brocade’s influence at HP is diminishing.

For Companies that have Ethernet switch portfolios and are looking to get into the FCoE switching market—what are their choices to attain the core network convergence technology?

If you sell Ethernet switches you can’t and won’t turn to Brocade or Cisco for their FCoE switching technology—they’re your fiercest competitors—so who do you turn to? QLogic, which as we’ve stated before, is growing and becoming increasingly viewed as a neutral, arms supplier of FC/FCoE/10GbE/InfiniBand networking technology whose strategy is complimentary to the large OEMs like HP.

My Angle

In this new era of cloud computing and converged infrastructure, partners are becoming competitors at an increasingly rapid, alarming pace. Companies that are neutral like QLogic are in a position to benefit as they pose no competitive threat and primarily exist to provide enabling networking technology in the war for the next gen data center.

For startups there are some lessons as well. In this market controlled by big players, startups and mid size companies might want to take this same approach by being neutral.

With shifting markets new entrants with strong and differentiated products often emerge out of the competitive chaos and take down nice big positions. QLogic now emerging as a brand in the datacenter. Add the massive growth in cloud computing and converged infrastructure and you have a winning formula.

With cloud computing this is a case where a competitive market and rising tide can float some boats. The HP design win by QLogic puts QLogic on the scoreboard as a big datacenter brand.