AMCC Makes Network Storage Splash -

AMCC Makes Network Storage Splash

To bolster its network storage offerings, Applied Micro Circuits Corp. (AMCC) Tuesday announced it will acquire storage gear maker 3ware for $150 million in cash and options to buy stock.

3ware crafts Serial ATA RAID storage solutions to pipe data backup, near-line storage, and network-attached storage (NAS) applications that require a lot of power. The company's StorSwitch architecture applies network packet switching to storage controllers to remove traffic bottlenecks.

As a new entrant in the crowded storage networking market, AMCC offers host bus adapters (HBAs) , courtesy of its acquisition of JNI, as centerpieces for storage area network (SAN) offerings. AMCC also makes networking chip solutions to boost the performance of switching and routing applications.

By adding 3ware's solutions to its portfolio, San Diego, Calif.-based AMCC hopes to gain traction in what analysts say is an increasingly promising market for SATA, a new standard for connecting hard drives into computer systems. Based on serial signaling technology, SATA benefits from several advantages over hard drives that use parallel signaling .

These advantages include greater speed, cabling efficiencies, and features that allow the technology to be readily integrated into servers and network storage environments. Using SATA in combination with HBAs, which transfer data between a host computer's bus and the Fibre Channel loop, AMCC will now be able to offer customers premium connectivity and data transfer for their SANs.

Dave Rickey, chairman, president, and CEO of AMCC, says the purchase complements AMCC's desire to branch out in the storage networking market.

"SATA RAID is one of the fastest growing segments in storage today, and 3ware has achieved significant market penetration with a switched architecture that delivers performance scalability with the economy of Serial ATA," Rickey said on a conference call. "3ware's customers and channel relationships complement our existing small and medium-sized business host bus adapter strategy."

Rickey said 3ware's technology will also help AMCC extend its reach into the direct-attached storage (DAS) and NAS markets. This is important for AMCC, which is looking to make inroads into the HBA market, a market currently dominated by QLogic and Emulex .

Brent Little, AMCC's senior vice president and SAN general manager, said on the call that AMCC expects the combined market of parallel and Serial ATA RAID adapters to grow at a compound annual growth rate of 50 percent over the next several years and to reach a market of $400 million by 2007.

3ware President and CEO Faye Pairman, along with the Sunnyvale, Calif.-based outfit's 70 staffers, will report to Little as part of AMCC's global SAN business.

AMCC will acquire all 3ware shares for $150 million in cash and will assume stock options based on an exchange ratio to be determined at closing. The transaction is expected to close on or around April 1.

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