 Live from the FIIA Barcelona Gran Vía conference center in Barcelona, Spain, it's The Cube. At HP Discover Barcelona 2014. Brought to you by headline sponsor HP. Back to Barcelona everybody. I met him saying he's here. He's the senior vice president and general manager of the Ethernet business unit at QLogic. I met, welcome to The Cube. Thanks for coming on. Thank you very much for having me here. You're welcome. So you are the guy who runs the Ethernet business which came over from Broadcom, relatively new to QLogic, new, four months. So tell us about the Ethernet business unit, why it came to be, why the acquisition and what the mission is. Well, one of the key things in the industry as you see, that IO is becoming more critical, especially with the introduction of cloud, cloud infrastructures. IO has become critical and QLogic has been in the IO business for many years. Doing the Piper Channel, Piper Channel Sands and Storage. And we felt that this would be a great place for us to expand our expertise and capability. And the acquisition was really to establish us in that business space more specifically around Ethernet as well as our core competency around Piper Channel. So that's where the acquisition really... So compliment to what you're doing in Piper Channel. Absolutely. The internet. The internet. But of course Piper Channel, Piper Channel not going away. But all the growth of the market really is in the Ethernet space. So you got to have a play there. Absolutely. So Broadcom was essentially a quasi-competitor at the time. Yes. In that space. And we acquired the assets of Broadcom that we brought into QLogic to establish the business. Yeah, and Broadcom's doing some really interesting things in their core competency. Slogging it out in this space is not... Not in there. You guys at Emulex love it. It's just like you live for the hard businesses. It's hard, right? It's a challenging business. Well, you've got to imagine where QLogic is right now. We have a great competency with working with OEMs, providing all the software layers that run on top of our solutions today. And as you look at that capability, QLogic had a great synergy in bringing that plus the technology that we acquired from Broadcom. So we bring that quality and confidence in the software layer and stacks on top of the solutions that we can deliver to our customers like HP and others. Okay, so you talk about... Let's talk about more about some of the drivers. You mentioned cloud. I mean, you've got multicores coming in. You've got Intel still doing its thing. You've got virtualization. You have flash now. Yeah. Driving. So you have these multiplicative effects that are driving IO through the roof. So you have to be able to manage that effectively, efficiently, and deliver it. Talk about that challenge, technically, and how you guys are resolving that. Well, one of the key things with IO is that everybody says, okay, well, let's just move the bytes from memory out to the wire and back to spores. There's really nothing much to it. But it's much more complex, especially with the advent of virtualized environments and what's going on with the amount of data that you now have to move in and out of the server in terms of storage and the actual applications themselves. So not only do we have more data being pushed through the pipe, but you now have to be able to do some unique things with that data and managing how that data moves from point A to point B on the networking. So IO throughput becomes a critical factor in making your applications work. So what we could do is take some of that burden that usually sits in the CPU side, bring it to closer to the wire, and improve the performance of the connection. So different protocol usages from running very low latency transaction oriented applications to streaming video. Those have got two separate needs, but running on the same wire. So some of the technologies that we create inside the solution that allows us to more effectively bring that. So, okay, and so your background is in storage and networking. You guys sort of sit at the intersection of that. Let's talk about mobile. Mobile apps are sort of changing everything. The network everybody talks about, the network is flattening. It's going east-west. There's a networking guy going to ask you. I mean, storage is scaled out. Computer is scaled out. When's networking going to scale out? Good question. So, you know, that's the opportunity, right? When you look at networking scaling out and becoming distributed, well, naturally it's distributed, but the function of the network being distributed and becoming more soft-oriented and being more configurable as the workload demands come in, that's where I think the opportunity of the scale out is going to happen. So we're all about making that happen at the networking level. What about HP Discovery? You're here. What's the relationship with HP in your space? Well, no Q-logic in HP. A long relationship. So, actually, in fact, I reckon that Solutions with HP is in most of their key products through the acquisition of Broadcom and our existing private-general products. So we have a lot of connections here with HP. We provide all the IOs with the capabilities to HP service. So that's where the connection comes from. So what are some of the big trends you're seeing from HP and maybe some of your other OEM customers that are pushing you? Well, there's all these big cloud discussions going on, but let's try and boil that down a little bit more explicitly. Converged infrastructure is a big theme here, as you can see. There's a lot of people talking about, we're not just going to deliver a piece of hardware that you're going to do your own thing. We'll give you a combined solution set. So with that in mind, how do we play in there and what are we doing to enable those converged infrastructures? So that's one of the themes I've heard a lot here. And software everything is another theme that I'm hearing. You know, software defined networks, software defined storage. And so those are the two things that I've seen here across and then all that pulled together through a cloud solutions and cloud services, hybrid, private, so forth. So a lot of that's being driven by the whole hyperscale trend. Google, Amazon, Facebook started it all. Maybe Facebook didn't start it all, but certainly Google started it all and Amazon and Facebook came right in. What does that all mean for a company like Q-Logic? Well, you know, there is this core enterprise business space that we have and that's the traditional computing models that you see and have seen for many, many years. We're starting to see that transition now to the more hyperscale class environments. And what that means for us is that how relevant is our solutions going from one environment to the other. And as you pointed out earlier on, the internet connectivity is a big key asset of all those new emerging cloud, new emerging compute models. So we see the relevance of our solution is attacking some of the barriers that those new environments are bringing forward. Like how effective can we be when you have, you know, you could have on a single server, you can have multiple tenants running different applications. How can we be more effective in making those applications perform at the optimum level? So we have this concept around having what we call software-defineable adapters that can run multiple protocols at the same time. So, okay, so now historically your enterprise customers, I think of them as scale-up architectures. You know, many of them, all the new growth is scaled out. How does that change the way in which you guys design products? I mean, you're obviously shifting some R&D there. I wonder if we can talk about that. Yeah, well, the best way to look at it is that the enterprise class has got a much more demanding set of requirements on the Ethernet controllers and the fiber-general adapters around high availability, security, and really being a very rock-solid type of environment where they have to have that in mind. When you look at the scale-up and hyperscale-out, they're much more cost-driven. So our challenge is how do we bridge that gap? How do we take some of the capabilities we have in the traditional enterprise world and bringing it to the hyperscale environment? So that's one of the key things that we're driving within my business unit. So, man, you talked about software-define before. It's everywhere. Everybody's talking software-define, so you've got to talk software-define. But I wonder if we can drill that down into the adapter business. So you think of software-define compute as a virtualization did. And then VMware talks about bringing that to storage and networking. And of course, Cisco is talking about that. Everybody's talking about that. What does it mean now at the adapter level? Is it essentially virtualizing those adapter resources, the ports? Yeah, so, for example, in our current generation platforms, we introduce some SRIOV type of capabilities. And very similar to that, I won't go down all the buzzwords. But basically, what we're doing is we're taking a single physical adapter and virtualizing the NITs or the network interfaces on those virtual adapters. So a single server, you can have one, two, or 50 or 100 virtual NITs in one physical server. So that's one of the things that we're doing to help virtualize space. Okay, so now historically, I would always have, and I will still have, so we have redundancy. Absolutely. The problem in the past is in order to get redundant, two more just to have any kind of connectivity. So you're able to virtualize that resource. What kind of consolidation ratio do you see? Well, if you think about the speed of the pipe that you're connecting to now, we're at 10 gig, and 10 gig is really, really ramping right now. We can see it across the board. So when in a 10 gig pipe, you run multiple mix equivalent of one gig, running in that particular space. So when you look at it from that ratio, you're sort of setting yourself, well, I'm going to go from 10, one gig mix down to one 10 gig mix and virtualize 10 of those into that same adapter. But what we are actually seeing is that when people take a server and put a 10 gig mix in there, they're putting redundancy in there. So you've got two ports and 10 gig. But they're also, it's a one-to-one replacement. It's not actually eliminating physical connections as much as we people thought that you're going to take 10 nicks and put them into one. In fact, the connection stays the same. But what's happening is a workload on the servers have increased because of the multi-cores and the virtualization layer. You're now having to create multiple one gig mix onto a one physical link. Yeah, so if you didn't have that approach, you wouldn't be able to run all these workloads. No, and then you have resource sharing conflicts. And then what happens if one virtual machine dies and then you're sharing the same resources with another virtual machine? So all of those things are now eliminated by creating this independent virtual instances of the net. Does the CNA analog apply to your business? Absolutely, yeah. Conversion network adapters that now, when they first came out, they were substantially more expensive. Where is pricing now? They've never been so expensive. But it was the promise of consolidation. But it actually turned into the value was the ability to run multiple workloads so you're saving at the top of the stack. That's right. Well, that's an interesting thing because in the industry there's this trend to start expensive, right? Very complex, and then figure out how to drive the cost and drive it down. Where we are right now is right in the middle of that transition cost. My belief is in the next four or five years we're going to see the convergenic prices, hardware, etc. convergenic prices going down in the price. And we can see that happening from our perspective as well. So that's a volume play, right? Absolutely. So now think about the cloud, the hyperscale, how does QLogic play in that? Well, there's cost reduction in there, and following that curve, we can now deploy into these environments where cost sensitivity is important. But again, the performance and the virtualization is a must-have now. We can't just do it with dumb old nicks as we call it in the old days. So you have to now think about how to do that. And that's what we're bringing about in the future. So thinking about your sort of end-year plan, whatever you are, knowing, understanding you've only been there for four months. But I'm wondering if you could just sort of share a vision of where you want to take this business, where you're working with Prasad now. Did you work with him at Intel? We were, yes, we knew each other. We know he's a good friend of the Cube, so we haven't seen him in a while, but we have to at least send him our best. But where do you guys want to take this business? Well, right now we want to establish the business. So with the acquisition of the Broadcom assets and with Cube Logic to capabilities, we've now got a established... We're predicting ourselves today to be about a number two player in the network, conversion network, network adapters in the business. Where we want to take it next is what we call technology leadership. So we are doing some very interesting and exciting products, and we're just announced our next generation being validated by OEMs, 100 gigabit interfaces. So we're increasing the interface speeds on our cards, but also the complexity of what we can put in their multiple protocols all the way from RDMA to TCP offload and ISECASY. To net that out, we are now adding more functionality to the adapter, so that's going to be our next stage. A lot of innovation. A lot of innovation. A lot of investment. A lot of technology. And then following that is what we're going to do, is take that same innovation technology we have in our current and next generation and drive the cost infrastructure down so that we can really scale out to a lot more broader volume of model space. So that's the three-step vision. We see the what the guys at HP were calling an aircraft carrier. That's what Martin Mikos was calling it. And then the ecosystem around it all building toward that cloud model that we're seeing now is mainstream. Five years ago, IT practitioners would roll their eyes at the term cloud today. It's a standard operating procedure. So Matt, thanks very much for coming on theCUBE. I appreciate the time. Thank you. Keep it right there. Everybody will be back to wrap up HP Discover 2014 from Barcelona right after this.