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Emulex Survey Reveals I/O “Perfect Storm”: Virtualisation, Cloud, Big Data, and Network Convergence Initiatives Pressure IT Organisations to Scale Data Centre Networks

54 Per Cent of IT Administrators Say Their Data Centre Networks Will Have Deployed 100Gb Ethernet by 2016

COSTA MESA, Calif, September 25, 2012 - Driven by a "perfect storm" of technology trends that includes server virtualisation, cloud computing, big data and the convergence of storage and data networks, over half (54 per cent) of all IT departments are being asked to scale their networks to support speeds of 100Gbps by 2016. That is the finding of a new in-depth survey just completed by Emulex Corporation (NYSE:ELX).

The survey of 1,529 IT leaders across North America and Europe focused on the issues, trends and challenges facing data centre personnel and IT organisations, particularly as they relate to data centre networks. The central theme emerging from the study is that IT departments, including CIOs and IT executives, are genuinely concerned about how to keep pace with the demand for increased throughput on data centre networks:

  • 81 per cent of survey participants said that the growing demand for network bandwidth is one of the most critical issues facing data centres today;

  • 76 per cent believe that network I/O is the most critical potential bottleneck in the data centre;

  • 70 per cent said that improving I/O performance in the data centre was a "high" or "very high" priority; and

  • More than half of respondents (52 per cent) said that their need for network I/O increases by 60 per cent or more annually.

Survey participants called out four key factors driving the unprecedented demand for network bandwidth in the data centre:

  • Virtualisation

    • 85 per cent of respondents said network I/O was a "significant" or "very significant" gating factor in limiting how many virtual machines they could run on a single physical server.

    • 72 per cent believe that it will be practical to run as many as 100 virtual servers on a single physical server in two years.

  • Cloud Computing

    • 53 per cent of respondents indicated that the advent of the cloud had driven the need for additional network bandwidth within their corporate data centres;

    • 40 per cent further said that the bandwidth expansion required to support migration to the cloud was 25 per cent or more.

  • Big Data

    • Half of all respondents (54 per cent) said that over the next two years, big data would increase their organisation's need for network bandwidth in the data centre by more than 50 per cent.

    • 63 per cent said that over the next two years big data applications will cause the amount of storage connected to data centre networks to increase by at least 50 per cent.

    • More than a third (37 per cent) of participating IT organisations manage 1 petabyte or more of data, and 11 per cent said they currently manage more than 100 petabytes.

  • Convergence

    • 45 per cent of survey respondents said the convergence of data and storage networks has had a "very significant" or "extremely significant" impact on the need for increased I/O.

    • 78 per cent said they believed it was inevitable that data and storage networks would converge into a single, consolidated network.

    • Nearly two-thirds (64 per cent) of IT organisations have either already moved to a single, converged network for data and storage, or have plans to in the near future.

"The fact that data centre networks need to keep getting faster isn't news to anyone," said Shaun Walsh, senior vice president of marketing and corporate development, Emulex, "but what is amazing is the rate at which the demand for bandwidth is increasing. Today, 40 per cent have already deployed 10Gb Ethernet, and in another four years, the majority of those networks will be operating at 100GbE. It's truly unprecedented."

Emulex is hosting a webcast today, September 25th at 9 a.m. PST to present the full survey results, discuss the findings in greater detail, and answer questions from attendees.

Emulex has also produced an education series titled, 'Why I/O Is strategic' consisting of an anthology of briefs by industry analysts and a series of associated webcasts in conjunction with Enterprise Strategy Group (ESG), IDC, Evaluator Group and 451 Research, to demonstrate the strategic importance of I/O in the data centre.

Visit the 'Why I/O Is Strategic' microsite here.

Download a copy of the 'Why I/O Is Strategic' education series here.

Register for today's webcast here.

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About Emulex
Emulex, the leader in converged networking solutions, provides enterprise-class connectivity for servers, networks and storage devices within the data centre. The company's product portfolio of Fibre Channel Host Bus Adapters, 10Gb Ethernet Network Interface Cards, Ethernet-based Converged Network Adapters, controllers, embedded bridges and switches, and connectivity management software are proven, tested and trusted by the world's largest and most demanding IT environments. Emulex solutions are used and offered by the industry's leading server and storage OEMs including, Cisco, Dell, EMC, Fujitsu, Hitachi, Hitachi Data Systems, HP, Huawei, IBM, NEC, NetApp and Oracle. Emulex is headquartered in Costa Mesa, Calif. and has offices and research facilities in North America, Asia and Europe. More information about Emulex (NYSE:ELX) is available at www.Emulex.com.

Press Contacts:
Katherine Lane
Director, Corporate Communications
+1 714-885-3828
katherine.lane@emulex.com

Martin Brindley
Davies Murphy Group
+44 1256 807360
Emulex@daviesmurphy.com

Emulex Safe Harbor Statement
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: With the exception of historical information, the statements set forth above include forward-looking statements that involve risk and uncertainties. Emulex wishes to caution readers that a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include among others, intellectual property claims, with or without merit, that could result in costly litigation, cause product shipment delays, require Emulex to indemnify customers, or require Emulex to enter into royalty or licensing agreements, which may or may not be available. Furthermore, Emulex has in the past obtained, and may be required in the future to obtain, licenses of technology owned by other parties. Emulex cannot be certain that the necessary licenses will be available or that they can be obtained on commercially reasonable terms. If Emulex were to fail to obtain such royalty or licensing agreements in a timely manner and on reasonable terms, Emulex's business, results of operations and financial condition could be materially adversely affected. Ongoing lawsuits, such as the action brought by Broadcom Corporation ("Broadcom"), present inherent risks, any of which could have a material adverse effect on Emulex's business, financial condition, or results of operations. Such potential risks include continuing expenses of litigation, risk of loss of patent rights and/or monetary damages, risk of injunction against the sale of products incorporating the technology in question, counterclaims, attorneys' fees, incremental costs associated with product or component redesigns, and diversion of management's attention from other business matters. With respect to the Broadcom litigation, such potential risks also include the availability of an adequate sunset period of time to make design changes, the ability to implement any design changes, the availability of customer resources to complete any re-qualification or re-testing that may be needed, the ability to maintain favorable working relationships with Emulex suppliers of serializer/deserializer (SerDes) modules and the ability to obtain a settlement that does not put Emulex at a competitive disadvantage. In addition, the fact that the economy generally, and the technology and storage segments specifically, have been in a state of uncertainty makes it difficult to determine if past experience is a good guide to the future and makes it impossible to determine if markets will grow or shrink in the short term. The current economic downturn and the resulting disruptions in world credit and equity markets that are creating economic uncertainty for Emulex's customers and the storage networking market as a whole has, and could, continue to adversely affect Emulex's revenues and results of operations. Furthermore, the effect of any actual or potential unsolicited offers to acquire Emulex may have an adverse effect on Emulex's operations. As a result of these uncertainties, Emulex is unable to predict its future results with any accuracy. Other factors affecting these forward-looking statements include, but are not limited to, the following: faster than anticipated decline in the storage networking market; slower than expected growth of the storage networking market or the failure of Emulex's Original Equipment Manufacturer (OEM) customers to successfully incorporate Emulex products into their systems; Emulex's dependence on a limited number of customers and the effects of the loss of, decrease in or delays of orders by any such customers, or the failure of such customers to make timely payments; the emergence of new or stronger competitors as a result of consolidation movements in the market; the timing and market acceptance of Emulex products or Emulex OEM customers' new or enhanced products; costs associated with entry into new areas of the storage technology market; the variability in the level of Emulex's backlog and the variable and seasonal procurement patterns of Emulex's customers; any inadequacy of Emulex's intellectual property protection and the costs of actual or potential third-party claims of infringement and any related indemnity obligations or adverse judgments; impairment charges, including but not limited to goodwill and intangible assets; changes in tax rates or legislation; the effects of acquisitions; the effects of terrorist activities; natural disasters, such as the earthquake and resulting tsunami off the coast of Japan in March 2011 and the significant flooding in various parts of Thailand in October 2011, and any resulting disruption in Emulex's supply chain or customer purchasing patterns or any other resulting economic or political instability; the highly competitive nature of the markets for Emulex products as well as pricing pressures that may result from such competitive conditions; the effects of changes in Emulex's business model to separately charge for software; the effect of rapid migration of customers towards newer, lower cost product platforms; possible transitions from board or box level to application specific integrated circuit (ASIC) solutions for selected applications; a shift in unit product mix from higher-end to lower-end or mezzanine card products; a faster than anticipated decrease in the average unit selling prices or an increase in the manufactured cost of Emulex products; delays in product development; Emulex's reliance on third-party suppliers and subcontractors for components and assembly; Emulex's ability to attract and retain key technical personnel; Emulex's ability to benefit from research and development activities; Emulex's dependence on international sales and internationally produced products; changes in accounting standards; and the potential effects of global warming and any resulting regulatory changes on Emulex's business. These and other factors that could cause actual results to differ materially from those in the forward-looking statements are also discussed in Emulex's filings with the Securities and Exchange Commission, including its recent filings on Forms 8-K, 10-K and 10-Q. Statements in this release are based on current expectations and, except as required by law, Emulex undertakes no obligation to revise or update any forward-looking statements for any reason. All trademarks, trade names, service marks, and logos referenced herein belong to their respective companies.

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