True to form, the recession bringing industry consolidation as smaller firms look to join forces to improve their competitive advantages when the recovery comes.
The latest example is QLogic's impending purchase of Ethernet firm NetXen. QLogic has offered $21 million in cash in a friendly takeover, no doubt looking to get in on NetXen's high-speed NIC and protocol-processing technology to augment its high-end storage area network platforms and converged network adapters . NetXen's Protocol Processing Engine should be a boon to QLogic's Infiniband platforms because it provides TCP/IP offload for extremely low-latency processing that will drive future network architectures.
NetXen also specializes in what it calls "Quality of Virtualization" technology designed to manage and maintain virtual networks according to service levels rather than virtual machines, a technology that could prove useful as more enterprises look to extend applications over the cloud.
QLogic just came off a record year in 2009, with sales topping $633 million, although the fourth quarter did show a drop of about $29 million from the same period a year earlier, due largely to lower sales of host bus adapters and switches. The company is also pursuing a stock buyback program that cost more than $200 million last year.