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DAILY NEWS AND INFORMATION
FOR THE GLOBAL GRID COMMUNITY / SEPTEMBER 22, 2003: VOL. 2 NO. 38
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Systems/Enterprise:
FABRIC NETWORKS CLOSES
By John
Abbott For the451.com
The merger of two InfiniBand companies earlier this year to form Fabric
Networks has unraveled already. The combination of the original two companies,
InfiniSwitch and Lane 15, was not enough to gain the momentum that investors
were hoping to see. CEO Alisa Nessler and a handful of staff are staying on to
wind down operations, sell the company's IP to any interested buyers and help
look around for new investment opportunities for the remaining cash in
hand.
The closure is yet another blow for the InfiniBand sector, which has been
waiting, apparently fruitlessly, for the enterprise adoption cycle to begin.
The investors judged the current market opportunity as not big enough to build
a company on, and have lost patience as OEMs continue to kick tires and end
users show no signs of buying. That decision puts some doubt on the future of
the remaining few InfiniBand players, such as TopSpin and InfiniCon
Systems.
Impact Assessment
The Message
Fabric Networks has run out of runway. Its original target market of
InfiniBand has yet to take off in the enterprise, and there's not enough room
for it to expand its technology for other fabrics. So it's closing its doors,
looking to sell off its intellectual property and will invest its remaining
funds elsewhere.
Competitive Landscape
This is good news for proprietary interconnect companies such as Quadrics
and
Myrinet, which at one stage looked as if they would be swept away by the
emergence of InfiniBand. Among InfiniBand survivors there are still InfiniCon,
Mellanox, TopSpin and Voltaire.
The451 Assessment
As we've been saying for some time, InfiniBand still looks like a good bet
as
a replacement for proprietary interconnects, particularly for internal use
within servers. But that won't be a sufficiently large market to sustain many
companies, particularly those that have raised large sums of money in the hope
of a broader market opportunity. Quadrics and Myrinet are long-term
interconnect survivors, but they've grown slowly and are likely to remain
niche players.
Context
Lane15 was founded in April 2000 and developed firmware for InfiniBand
companies. It hoped to see multiple OEMs pick up its work. InfiniSwitch was
one of those OEMs; it was founded a few months later and developed its own
line of InfiniBand switches. Together, the two raised about $47m in funding
before the decision was made to merge in March 2003. With that agreement, the
companies gained a further $12m from the combined pool of investors, which
included nine VC companies and strategic investors Dell, Hewlett-Packard,
Intel and Quanta.
The idea behind the merger, and the name change to Fabric Networks a few
months later, was to focus on the broader opportunity of intelligent switched
fabric networks. Following reorganization and staff cuts at both companies,
Fabric Networks was left with about 60 staff and $20 million cash in hand. Its
products included InfiniBand switches, host channel adapters and management
software.
Rationale
Fabric Networks says it has gained some traction in the high performance
computing market, but margins are too small in HPC, and not enough to sustain
the business. An enterprise end-user market just hasn't materialized, and
doesn't look likely to for some time to come, if ever. It's not that the
industry has turned its back altogether on InfiniBand –- most of the major
systems companies are still planning to use it as an internal interconnect
within server products –- but that Ethernet and fiber channel remain
entrenched for more general connectivity of servers and storage.
InfiniBand is likely to continue to maintain the performance edge for
high-speed, low-latency clusters, and that market may well take off in the
enterprise as grid strategies from commercial players such as Oracle and HP
start to wind up. But that's currently just a small niche opportunity. And as
10G Ethernet emerges and prices drop, it's bound to encroach further into
InfiniBand territory.
Strategy
Fabric Networks is ceasing all its InfiniBand work, and has laid off the 30
or
so staff that were left, leaving just a few, including CEO Nessler, to wind
down operations. The idea is to sell off the intellectual property to anyone
who might be interested, and then to reinvest the remaining money into another
startup, unrelated to InfiniBand. Its switch ASIC technology and management
software might be of interest to companies such as Adaptec, Agilent, Broadcom,
Emulex, LSI-Mylex, QLogic or Vixel. Other InfiniBand companies are less likely
to take it on, due to their own financial constraints.
There's no word on how the remaining cash will be spent, or on how much of
the
$20 million cash pile held back in March is still left. The VCs who have put
money
into Fabric Networks include Austin Ventures, Bessemer Venture Partners, Index
Ventures, LightSpeed Ventures, Moore Capital Management and TL Ventures.
Competition
Lane15 had one direct competitor, Vieo, which changed direction toward
broader
systems management at the end of last year. It's not clear yet whether it will
make it, but the $20 million in extra funding it's gained since will help.
InfiniSwitch's direct competitors included Paceline (assets sold to Motorola
in May), InfiniCon, TopSpin and Voltaire. Host bus adapter maker JNI, which
had put InfiniBand at the heart of its strategy, has just been sold off to
Applied Micro Circuits. Omegaband closed last year, and Banderacom has changed
its focus to Ethernet. Intel and IBM both pulled out of the InfiniBand
components business a while ago, leaving Agilent and startup Mellanox as the
only significant players. Mellanox is expanding out from its chip focus into
host channel adapters, switches (it supplies switches to Voltaire on an OEM
basis) and interconnect packages for HPC users.
Delays in InfiniBand adoption have meant a stay of execution for the
proprietary interconnect companies like Quadics and Myrinet. Earlier this
month, for instance, IBM announced the availability of Myrinet as the
high-speed cluster interconnect for its eServer BladeCenter blade server
product line –- something that observers might have expected InfiniBand to be
used for, given IBM's general support for the technology. Sun Microsystems has
opted for InfiniBand for use with its own blade servers.
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