Hey Storage Spaces Direct Fans,

As many of you know a LOT of us have been using Mellanox Technology components in our Storage Spaces Direct designs for the past 18 months. Is it time to re-think and start looking at alternate technologies? Well, the answer is likely not. Mellanox’s cut will be will be seen on their Ultra VOA (Variable Optical Attenuator) lineup. Basically, these are Fibre Optic Transceivers and their associated SFP form factor. The announcement by Mellanox earlier last week said that it will be discontinuing it’s 1550 nm Photonics Development Activities.

In a statement from Mellanox:

The company expects that there will be no impact for the Variable Optical Attenuators (VOA) product and Mellanox will continue to sell to and support its VOA customers. This action is expected to have only a minor impact on the LinkX cables and transceivers product line. The company plans to execute on its roadmap to deliver 200 gigabit, 400 gigabit and beyond cables and transceivers solutions on schedule, utilizing other technologies including Mellanox own IC designs. The company intends to retain the silicon photonics intellectual property.

Mellanox gained its silicon photonics activities through the 2013 acquisition of Kotura in a deal valued at $82 million. The start-up had developed a line of variable optical attenuators (VOA) in silicon photonics, and believed that its technology showed great promise to drive down the cost of high-speed interconnect products.

However, the Kotura team was not able to demonstrate that silicon photonics could fulfill that potential.

In a statement from Mellanox in this press release it is clear that this move has been made to shore up their bottom line pending the release of their 4th quarter results here in a few days on January 18, 2018.


“The Mellanox Board of Directors and management team continually review our strategic priorities and investments to ensure they meet our future goals. We began our review of the silicon photonics business in May of 2017, but as the business did not become accretive as we had hoped, we decided to discontinue our 1550nm Silicon Photonics development activities,” said Eyal Waldman, president and CEO of Mellanox Technologies. “We appreciate all of the efforts of the silicon photonics team over the years and wish them success in their future endeavors.”

The discontinuation of Mellanox’s 1550nm silicon photonics development activities is not expected to have an impact on fiscal 2018 revenues and is projected to result in expected fiscal 2018 non-GAAP operating expense savings of $26 million to $28 million. Also, this action will result in an estimated aggregate charge of $21 million to $24 million, including approximately $4 million to $5 million of cash expenditures – mostly related to the severance costs of a reduction in force of about 100 people – as well as approximately $17 million to $19 million of other charges, consisting primarily of non-cash items. Mellanox expects to recognize most of the restructuring charges in the first quarter of 2018. Mellanox will provide more detail on its 2017 results and 2018 outlook in its fourth quarter earnings report which will take place on January 18, 2018.

For us involved with the Hyper Converged Infrastructure it appears that for now we are safe to continue using Mellanox as a preferred vendor. The only thing that we can do as a community with this is to hope they can continue delivering us with cost effective High-Speed Networking infrastructure at an extremely competitive price. It also appears that their legacy products remain unaffected by this decision so the Mellanox CX3/4 Network Adapters and associated Switches (S1012x’s are the ones that we use a lot) appear unaffected. From the research that our CheckyourLogs.net MVPs have done it appears this impacted cut in development doesn’t appear to affect the line-up of ConnectX products. So, fear not it appears your Storage Networks for Storage Spaces Direct will be fine.

As for myself, I am sticking with Mellanox because they do deliver an extremely solid product and we have been able to build rock solid infrastructure with their solutions. Lastly, we found out that cuts were not just made in the US and it did impact Canadian operations for Mellanox. As far as we can tell right now most of the Canadian Sales / Pre-Sales teams have been let go and the US operations will take care of handling Canadian sales. We had some good colleagues in that Canadian subsidiary and we wish them all the best of luck in finding a new home to hang their hats.

Thanks, and hope you enjoyed reading,