QLogic at Robert W. Baird & Co Growth Stock Conference - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

RICK FRANZ, VP TECHNOLOGY AND PLANNING, QLOGIC CORP.: Good morning. Thank you for joining us. First of all, actual events and results could differ materially from what we're going to be saying today, so please refer to our 10-K and our 10-Q for additional information about the risks associated with our statements.

QLogic's vision of where the market is going at this point is that of a grid. Things are becoming much more modular as we move forward, requiring a great deal more connectivity, and we believe that QLogic will play an important part in that connectivity as the growth of the grid generation continues.

QLogic's interconnect portfolio started some time ago with our fibre channel HBAs back in the '90s. We moved from fibre channel HBAs into fibre channel switches with the acquisition of Ancor Technology in 2000. We've since added to the portfolio with iSCSI HBAs. We've developed internally router products for moving both across wide area networks, connecting fibre channel SANs across wide area networks, as well as connecting remote servers into fibre channel SANs.

Recently, with acquisitions over the last 18 months, we've acquired a storage services platform--developed a storage services platform, with the acquisition of Troika Technology. That provides a high performance platform for running virtualization software, from both OEMs as well as ISVs.

And then most recently, the acquisition of Pascale and SilverStorm for our InfiniBand HCAs and InfiniBand switches, which moves us into a different market sector associated with server to server interconnects and broadens our interconnect within the data center.

So, some recent highlights. Over the last year or so, we have expanded significantly, globally, with offices in Asia as well as additional offices, both sales and postponement centers in Europe. We've made the acquisitions of both Pascale and SilverStorm for the InfiniBand HCA business, and the InfiniBand switch business, which provides us the premier connectivity, end-to-end connectivity, within the InfiniBand business. This is high performance computing marketplace. We have the broadest supply of switches in the marketplace.

We made significant gains in the fibre channel HBA business. As you recall, this was our first entry into storage networking. According to Dell'Oro Group, we had a 49.2% market share as of the end of calendar year 2006. We're number one in 4-gigabit HBAs, fibre channel HBAs, in market share with 50%. That includes mezzanine card revenue.

Our fiscal 2007 HBA revenue is up 24% over fiscal year 2006, and our 4Q FY '07 revenue was up 19% over 4Q FY '06. So we've made some significant strides in the fibre channel marketplace. We've grown share significantly over the last year, and we're very pleased with our performance there.

HP Virtual Connect is a new technology released by Hewlett-Packard this--over the last couple of quarters. It basically adds the ability to speed fabric switch management without the complexity of a switch, so the complexity and cost of putting in a fibre channel switch into a blade server environment--or, a blade system environment, is dramatically reduced with this type of environment. It's fully interoperable with all the vendor fabrics, so the interoperability issues of having a proprietary switch are dismissed.

And IDC reported HP shipped over 152,000 blades in 2005. HP continues to do a very good job in that blade server environment, and we're pleased to be able to work with them to develop this new Virtual Connect technology for that blade server environment.

This new disruptive technology we brought to marketplace in October of last year--it is a director-class switch at a significantly lower cost. We believe there's a position in the marketplace for small to large enterprises for a director-class product. It …