The Man Knows SAN: An Interview With H.K. Desai, CEO Of QLogic.

In the sea of SAN, one fish is swimming well: QLogic. Currently the only company that provides complete end to end SAN infrastructure products, QLogic sports the phrase, "changing the way that the world views SAN."

At the helm is H.K. Desai whose understanding of SAN and knack for implementing strategic has contributed to the firm's success. Since he accepted the position of president in 1995, market capitalization skyrocketed from 25 million in August '95 to 10 billion in October 2000.

In an ongoing series that features CEOs of top companies, CTR interviews H.K. Desai.

CTR: What is your vision of SAN technology?

Desai: We are in the business of providing infrastructure products to the SAN. The difference between us and everybody else is that people are focusing on one product of the SAN. What we have done is provide products like the host bus adapter, which is going to the server, or silicon, which goes on the motherboard of the server, and we have a switch product.

The other side is storage subsystems. So we have silicon for the subsystems and then inside the main subsystems there is silicon for the disk drives. We provide every product that is a part of the SAN infrastructure.

There is a need to connect multiple storage devices to multiple servers and that is where SAN comes into play. I think there are a lot of opportunities where SAN is concerned. Right now our focus is the Fibre Channel technology.

CTR: With the acquisition of Ancor, QLogic now offers end to end SAN infrastructure solutions. QLogic offers a full range of HBAs as well as switches. Was this a revolutionary change for the company or just a natural diversification?

Desai: I think it's really unique in the industry. If you look at our competitors they have one point product--either switch or HBA or silicon. But we are the only company providing the total solution for the SAN infrastructure.

CTR: HBAs are interface neutral. How do you see the various interfaces lining up?

Desai: Fibre Channel is key technology so everybody is using Fibre Channel technology for the SAN. Either it's HBAs or switches so everybody uses the Fibre Channel protocols.

CTR: QLogic now offers a full range of 2 gigabit per second I/O products. Is 2 gigabit per second I/O an enhancement product or for first time buyers?

Desai: One gig is initial deployment of the SAN. The new, high performance 2 gigabit is really an enhancement as far as performance is concerned. It's the same as SCSI, which used to be 5 megabits, then 10 then 20 and 40 and so on. I think the same thing is happening with the Fibre Channel. Right now it's one gig; now 2 gig is deploying this year; then there will be either 4 or 10 gigabit product coming up in the future.

It's just an enhancement; it's not something new.

CTR: Back to transport protocol. Where does IP phenomenon play?

Desai: There is a SCSI, Storage or Fibre Channel that's the current protocol for SAN. People talk about iSCSI, which is storage or IP. Because people believe IP structures are already there for the LAN network so the initial application, iSCSI can be used for SAN-to-SAN connections.

And then, because you can have remote SAN, you can use MAN and WAN structures to connect the SAN. There is a need for that. IP can be used for SAN-to-SAN connection You can have remote SAN. There is a need for that. You can have a Fibre Channel SAN or an iSCSI SAN. Right now Fibre Channel has tremendous momentum. Its been employed since 1999, and I think it's too late for any other technology to displace Fibre Channel success. In the future there is the possibility that people can start deploying iSCSI.

CTR: Do you have a roadmap in mind for your I/O offerings?

Desai: Our strategy is to provide all the products. We like to provide broad product lines for SAN infrastructure and we want to invest in new technology because customers can replace or augment what we have done in Fibre Channel. We like to invest in what we have done in the past like SCSI and Fibre Channel; as we do for InfiniBand and iSCSI.

CTR: You focused QLogic's resources into developing new markets ad customers, and drove market capitalization from 25 million in August 1995 to more than 8 billion today. How did you accomplish this?

Desai: Our strategy is that we started with SCSI technology, which was our bread and butter. What we have done since is invested in the newer technology, the Fibre Channel for example, and our strategy, is that whenever a technology transition happens in the I/O space, we like to be the first to market competitive products. We expanded into the new market by expanding into the new technology.

CTR: Would you say that other companies had as much of an understanding of this as you?

Desai: Yes, I think that the key to our success and what we have done better than other people, is that we have executed our path almost flawlessly for the last four or five years. For the customer the most important issue right now is the time to market. We execute every program real well, and I think that's where you see that growth.

CTR: Where do you see QLogic in 5 years?

Desai: I think it's difficult to say that nowadays. It used to be easier, when people had three and five year plans. But today things are different because the technology is changing so fast, the transitions are happening so fast.

There are so many new technologies coming into play, now, it's very difficult to project where we will be. One thing we will do is to keep investing in new technology and see where it takes us. In the last year FY 2000 we grew more than 70% in year to year revenue.

We cannot forecast what we are doing but if it continues to grow as it has this past six quarters then we can be a billion-dollar company in the next two to three years.

When we talk about a billion dollars, it's a market cap, not really a revenue cap. A revenue is not that much. The revenue-we started about 45 million for 95 and now last quarter was about 87 million dollars. That's about 45 million five years ago and now revenue is about 350 million dollars. This is quite good too.

CTR: What is QLogic's approach to the reseller market?

Desai: When we were in the SCSI market our focus was primarily OEMs. Now we are entering the reseller market with the Fibre Channel technology, (about a year and a half ago). We want to pursue that because we have a product--a host bus adapter for Fibre Channel and also switch products. So we are really putting out products for the reseller market and we are growing. Software revenues for the reseller market have been quite good these last couple of quarters.