Yes, Mellanox has already gone public. It is in the open marketplace that Oracle has purchased Mellanox stocks.
Speaking on Infiniband, I agree with Rick. Inifiniband might not grow as large as Ethernet or as so widely establshed as Ethernet. But definitely Mellanox has promise to grow bigger and more profitable in the medium term. Since Mellanox enjoys a significant market share in Infiniband switching products, it may at present and it will most definitely in the future, be able to earn super-profits. While ackonwledge the strategic motives as playing a part, this is the reason why I argue that the Oracle’s investment in Mellanox can be a plain-old investment for the sake of being profitable?
Oracle, like IBM and others, has a big stake in Infiniband and Mellanox is the only company making chips for it. Infiniband will never big as big as Ethernet, and Mellanox has been embracing Ethernet products to fuel its growth. I keep wondering why Mellanox has not gone public.
Well, in my view, it is wrong to conclude that Oracle has purchased Mellanox. Oracle has merely purchased 10.2% of Mellanox ownership, that again in the open market, which does not appear to be a buy out of Mellanox by Oracle.
However, in addition to being a demonstration of Oracle’s power, this move does have a two-fold effect. On one hand it gives additional leverage for Oracle to maneuver if another player tries to take over Mellanox. On the other hand, this gives an incentive for Mellanox to be especially accomodating of Oracle’s market needs and perhaps, gives Oracle, themselves, the opportunity to effect a unsolicited take over if the Mellanox gets too friendly with Oracle’s competitors.
Besides, who wouldn’t want to invest in a strong player in InifiniBand which appears to be the next big thing after Ethernet? This may be an investment in its literal meaning.
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