) continues to innovate as far as its high performance server and
storage networking connectivity products are concerned. Using its
technology, leading storage array vendors have been able to
develop high-bandwidth storage solutions. The company
recently announced that its FlexSuite dual personality technology
has been selected to constitute the converged interface for Dot
Hill ninth generation storage architecture.
This is an all-new interface, which provides Dot Hill's OEM
customers as well as channel partners with 16Gb Gen 5 Fibre
Channel/10Gb iSCSI converged networking storage systems. This
technology is expected to increase the demand for Dot Hill
Moreover, a few weeks back, QLogic launched FabricCache, which
ultimately helps to enhance the performance of a program in the
Oracle RAC environments.
Over the years, QLogic has designed products to address the
requirements of high performance network infrastructure, where
speed and reliability of networking hardware and software is most
important. The company focuses on serving the high-end enterprise
data center market, which is expected to grow significantly due
to rapid adoption of cloud computing.
According to market research firm Gartner, spending on data
center systems is expected to increase 4.0% year over year to
$152.0 billion in 2014. We believe that this increasing spending
level will boost the company's top-line growth over the long
QLogic continues togain market sharedue to its strong product
portfolio. The company's extended adaptive convergence strategy
is expected to boost its growth in converged networking
(essential for cloud computing) over the long term. The company
continues to gain market share in the
Fibre Channel over Ethernet
(FCoE) market. We believe that the innovative product pipeline
will be a key catalyst for the company's top-line growth over the
We believe that QLogic will continue to benefit from contract
wins from OEM's such as
Hewlett Packard Co.
) in the near term. Moreover, innovative product pipeline, new
technologies (Mt. Rainier) and additional savings from its
restructuring initiatives will drive profitability going
However, a tough macro-economic environment continues to hurt
server sales, which in turn may hurt top-line growth in the near
term. Increasing investments in engineering and increasing
competition from peers such as
) will hurt profitability going forward.
Currently, QLogic has a Zacks Rank #3 (Hold).
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