By now there is no doubt that all the dramatic events that have occurred to Mellanox Technologies Ltd. (Nasdaq:MLNX; TASE:MLNX) in the past few weeks are connected to cloud computing wars.
Oracle (ORCL) was very enthusiastic about Mellanox, and apparently sought to acquire it, and when CEO Eyal Waldman refused, Larry Ellison looked for some way of ensuring that it would remain independent. A tough fighter like him would not have been able to bear it if he had woken up one morning to find that everything he had invested in Mellanox solutions had gone down the tubes because HP had bought it. Buying 10.2% of Mellanox ensures him a blocking minority when it comes to any future sale of the company.
The gorillas Oracle, Microsoft (MSFT), Cisco (CSCO), HP (HPQ), Dell (DELL), as well as Google (GOOG) and Amazon (AMZN) are all gearing up for the age in which software services and applications will be leased on the web through secure solutions known in general as "cloud computing", a market that it is estimated will be worth trillions of dollars in another few years.
Google is one the biggest buyers of infrastructure solutions for cloud computing, and it is building huge data storage centers. One of the rumors now doing the rounds of the market is that, for one of the large new storage centers that Google will build next year it asked Israeli companies Mellanox and Voltaire to merge, because it found suitable solutions in each one of them, and it wanted a unified platform on the basis of both. Incidentally, this month, Google bought a huge building in Manhattan which it is believed is mainly earmarked for a large data storage center, because it sits on a central junction of its web traffic.
Rumor also has it that all the above-mentioned gorillas are competing to provide infrastructure for that huge storage center, which is budgeted in the hundreds of millions of dollars for servers and software, and that Ellison's latest bellicose statements about the competition are simply part of his sales pitch to Google.
In this context it seems that the chase after Radware Ltd. (Nasdaq: RDWR) by IBM, HP, Riverbed - and maybe Cisco will eventually join in too - is nothing but the desire of the gorillas to complete quickly the technological armory that each needs in the battle for the cloud computing market.
A third local company, although a tiny one even by Israeli standards, that also hopes to flourish thanks to the wave of demand expected from cloud computing, is Attunity (Nasdaq: ATTU). Among other things, it has close business ties with Oracle, IBM, and Microsoft, and it will certainly get to HP as well, since its new CEO is considered more of a software than a hardware person.
One of the critical applications in cloud computing will be the ability to retrieve data in real time, particularly changes in them, what is known in the professional jargon as change data capture (CDC). Attunity has excellent solutions in just that field.
In the coming years, Attunity hopes, via those gorillas, to achieve sales in the millions of dollars annually from the huge budgets for cloud computing infrastructures. On the other hand, CEO Shimon Alon knows that if substantial growth does materialize from this new direction, he will receive an offer that he won't be able (and, unlike Eyal Waldman, also won't want) to refuse, from one of the gorillas.
Published by Globes [online], Israel business news - www.globes-online.com - on December 7, 2010
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