In early 2012, Intel announced it would be buying QLogic's InfiniBand assets in a bid to bolster its networking and high-performance computing portfolios.
Since then, Intel has offered InfiniBand components (and even claimed late last year that sales of such components grew by 50% year over year in 2014). But it has also signaled to the industry that it plans to roll out its own fabric in place of InfiniBand -- dubbed Omni-Path -- in the near future.
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Further, Intel had said it plans to integrate the Omni-Path fabric controller onto future Xeon and Xeon Phi processors, which the company says should serve to "eliminate the additional costs and required space of discrete cards." Intel also says that such integration will lead to lower power draw than using discrete parts.
Intel's integration of Omni-Path fabric directly onto its Xeon/Xeon Phi processors has long been viewed as a potential threat to Mellanox's discrete InfiniBand components business. InfiniBand-related revenue represented 70% of Mellanox's revenue in its most recent quarter.
That said, recent comments from Mellanox CEO Eyal Waldman on the company's most recent earnings call suggest Omni-Path may not be performing as well as some might have expected.
What's the scoop?Mellanox CEO Eyal Waldman noted that based on "rumors" he has heard (presumably within the industry) Intel's Omni-Path solution "is not competitive." He notes that Intel isn't meeting either its bandwidth or latency targets with Omni-Path.
"We don't know, this could be early results and could be optimized to be better, but the initial performance results we're hearing about Omni-Path are not encouraging," Eyal said.
That said, Intel says Omni-Path is "gaining momentum"In a recent presentation at the International Supercomputing Conference, Intel claims its Omni-Path technology is "sampling with most major [high-performance computing] and [original equipment manufacturer] vendors."
Intel is also promising "over 100 switches and server platforms at launch," with customer deployments expected in the fourth quarter of 2015. These deployments are expected to include adapters, edge and director switches, software, and cables.
With a launch scheduled for later this year, investors should be able to get a decent read on how well Omni-Path does in the market by the first half of 2016.
What this means for MellanoxIf Mellanox is correct that Intel's solutions trail its InfiniBand solutions in terms of performance, then I suspect buyers of high-performance computing systems that absolutely must have the best performance will still likely choose Mellanox's stand-alone InfiniBand solutions.
This means that Mellanox should still be able to benefit from the rapid growth in the high-performance computing market, despite the fact that Intel seems to be betting big on Omni-Path.
How about for Intel?Intel has made it very clear that a substantial part of the growth it hopes to achieve in its data center group will come from "non-CPU" technologies. In fact, according to the company's 2014 investor meeting presentation, "non-CPU" sales are expected to grow from just 12% of the company's data center group in 2014 to 22% by 2018.
Intel is clearly serious about investing in technologies such as Omni-Path in order to grab as much dollar content in the data center as possible, so even if the technology isn't quite up-to-snuff today, I do expect the company to keep trying to narrow the technology gap with Mellanox here.
Whether it will actually succeed or not is something only time will tell.
The article Intels Omni-Path Fabric Is Not Competitive, Says Mellanox CEO originally appeared on Fool.com.
Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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