Can JNI Bust HBA 'Duopoly'?

JNI Corp. (Nasdaq: JNIC) says it wants to break up the "duopoly" in the Fibre Channel host bus adapter market with the release of a new HBA for Windows priced up to 30 percent lower than products from the two vendors that currently dominate the market, Emulex Corp. (NYSE: ELX) and QLogic Corp. (Nasdaq: QLGC).

JNI's 2-Gbit/s ZStar series of HBAs, aimed at small and medium-size enterprises, provides a wizard-like installation and management tool. The ZStar Series includes two HBA models: the Z210, a single-port PCI-X HBA; and the dual-port PCI-X Z220. More important, perhaps, is the fact that JNI expects the street pricing for the ZStar adapters to be under $800 per port -- well below the $1,000-plus that HBAs from Emulex and QLogic typically cost.

"There is obviously a huge market through the OEMs [original equipment manufacturers]," says Phil Brotherton, VP of marketing at JNI. "Everybody knows pricing is critical to opening up the SAN market, and everybody knows the complexity is killing the uptake... We've built an HBA truly focused on the midmarket's needs."

But as of yet, JNI hasn't landed any OEMs for the ZStar (or, at least none that it's able to announce publicly). And the company will face a lot of work in order to displace the incumbents, Emulex and QLogic, which have both enjoyed fairly steady growth and comparatively high margins in the last few years (see Is Emulex Slowing Down? and QLogic Keeps on Truckin').

JNI has lagged as a distant No. 3 behind them, concentrating on the high-end Solaris market. Now the company believes it has the right product mix to mount a serious challenge to the Big Two. "We've spent a lot of time trying to crack the duopoly," says Brotherton.Potentially complicating JNI's thrust to be a stronger HBA player is that chipmaker Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC) last month announced its intention to acquire JNI for $190 million (see AMCC Looks to Buy JNI).

AMCC will try to exploit the JNI technology for embedded applications, thereby augmenting its addressable market rather than narrowing it, Brotherton claims. "They bring financial clout," he says. "And we, as a relatively small player, had not focused on selling our selling silicon to the target side."

Besides price, JNI says its ZStar HBAs provide unmatched ease of use. EZ Fibre for Windows is a Java-based application that provides auto-configuration capabilities, as well as LUN discovery and mapping. In addition, the software also incorporates a performance-tuning feature to optimize I/O performance based on server application environment, including settings for streaming media (larger block sizes with sustained I/O), for transactional applications (smaller blocks with variable I/O), or to minimize host CPU utilization.

The JNI ZStar Fibre Channel HBAs will be available through resellers and distributors starting this month. By the end of the year, JNI is scheduled to have a Linux driver to work with the ZStar HBAs.

Todd Spangler, US Editor, Byte and Switch