News

posted on 28 August 2008 14:55

HBA and RAID controller supplier Adaptec is cutting its Intel RAID-on-a-chip supply strings from Intel and buying RAID chip and software supplier Aristos Logic for $41 million cash.

Currently Adaptec sells Unified Serial RAID controllers for SAS, SATA and iSCSI applications. It uses Xscale processors from Intel and supplies its own firmware. Aristos, a privately-held and venture capital-funded startup founded in 2001, has developed its own RAID ASIC (Application-Specific Integrated Circuit) technology and software and found favour with the top tier storage OEMs who have outsourced their RAID controller technology to it. Sun's StorageTek FlexLine arrays use the Aristos ASIC and software. This blue chip base now comes to Adaptec.

Adaptec reckons that with its own RAID chip technology it can respond faster to market needs and sees opportunities to add suppliers of blade servers, high-end desktops and external storage arrays to its customer roster. Juergen Frick, Adaptec's marketing head for EMEA, said: "Now we have our own ASIC we can build it into a storage blade, a RAID blade. It's a perfect match for Adaptec." Currently Adaptec sells RAID cards which wouldn't be as suitable for such applications.

Adaptec's CEO, Sundi Sundaresh, said: "As we build-out our I/O strategy -- advancing I/O performance while integrating additional controller-based system functionality beyond RAID -- the assets we will obtain through this acquisition will become even more valuable."

Integrating additional controller-based functionality beyond RAID? What can he mean? Some form of storage management?

What Adaptect will surely do is to combine its firmware functionality with the Aristos RAID Storage Processor (RSP) product and also develop it to take advantage of the RSP roadmap which includes a coming 6Gbit/s RAID controller. With 6Gbit/s SAS ahead of us a faster RAID controller will be required.

For Adaptec as a whole this is a most welcome step forward. It recently sold its under-performing SnapServer NAS division to Overland Storage for a paltry $3.6 million and has started moving back into sustainable profitability after a poor 2007. Revenues for its first fiscal 2009 quarter were $31.5 million and net income was $5 million. The fiscal 2008 picture was one of revenues of $167.4 million and a net loss of $9.6 million. It will be glad to put this in the past and move forward.

For Aristos, Adaptec represents release from the venture capital embrace, a nice trouser-filling experience, a much-expanded channel sales organisation, and opportunities for bigger things. For Adaptec, Aristos is the accelerant needed to help stoke its product fires into burning more brightly and putting a spring in its step. That's worth paying $41 million for.

^{[Chris Mellor.]}