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Is Microsoft about to acquire Mellanox?

Is Microsoft about to acquire Mellanox?

Redmond has reportedly hired Goldman Sachs to handle negotiations

Eyal Waldman (Mellanox Technologies)

Eyal Waldman (Mellanox Technologies)

Credit: Mellanox Technologies

Microsoft is rumoured to be eyeing up an acquisition for networking vendor Mellanox Technologies, according to mounting media speculation.

First reported by TheMarker in Israel, the tech giant has reportedly hired Goldman Sachs to handle negotiations, with J.P. Morgan representing Mellanox.

Microsoft is currently a customer of Mellanox and hopes the transaction will boost cloud computing services, as the vendor goes head-to-head with industry rivals Amazon Web Services and Google Cloud.

“If Microsoft buys Mellanox, it will follow Amazon, which in 2015 acquired Anforna Labs for $350 million,” wrote TheMarker, in a Hebrew language report. “This is in order to tap into the company's technology, which has developed chips that enable fast data communications and low energy consumption for servers.

“The acquisition improved the return on its investment in the cloud computing services infrastructure (AWS).”

Founded in 1999, Mellanox is headquartered in Sunnyvale, California and Yokneam, Israel, housing more than 2700 employees worldwide.

From a technology perspective, the vendor operates as a supplier of end-to-end ethernet and InfiniBand solutions and services for servers, storage, and hyper-converged infrastructure.

But Redmond isn’t the only interested party, with US chipmaker Xilinx also hoping to acquire the business before the end of 2018, according to CNBC reports.

The increased speculation comes two months after Mellanox delivered record quarterly revenue of US$279.2 million, up 24 per cent year-over-year for the period ending 30 September 2018.

“Mellanox continues to execute and gain momentum in the markets we participate in,” said Eyal Waldman, president and CEO of Mellanox Technologies. “Our strong results reflect the differentiated and superior product technologies that Mellanox has to offer for data centre infrastructure.

“The innovations built into our high-speed ethernet adapters, switches and cables are fuelling demand for our ethernet products.

“Leading hyper-scale, cloud, enterprise data centre and artificial intelligence customers continue to choose Mellanox to maximise the efficiency and utilisation of their compute and storage investments.”

Furthermore, Mellanox also shipped more than 2.1 million ethernet adapters during the first nine months of 2018.


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