Mellanox Corporate Pitch · Business HQ in California ... Computing market growth and increasing...

Mellanox Technologies, Ltd. Corporate OverviewJuly 2007

2 Mellanox Technologies

About Mellanox Technologies

Fabless semiconductor supplier founded in 1999 •

Business HQ in California

•

Research & Development and Operations HQ in Israel •

Global sales offices and support

•

200 employees worldwideLeading server and storage interconnect products•

InfiniBand and Ethernet leadership

Shipped over 2M 10 & 20Gb/s ports as of May 2007$106M raised in an IPO Feb 2007 (NASDAQ: MLNX)•

Dual Listed on Tel Aviv Stock Exchange as of Jul 9, 2007 (TASE: MLNX)

•

Profitable since 2005Revenues: FY’06=$48.5M, 1Q’07=$16.9M, 2Q’07 Rev=$19.8MCustomers include Cisco, Dell, HP, IBM, NetApp, Sun


Interconnect: A Competitive Advantage

Enterprise Data CentersEnterprise Data Centers

HighHigh--Performance ComputingPerformance Computing

EmbeddedEmbedded

End-Users

Clustered DatabaseeCommerce and RetailFinancialSupply Chain ManagementWeb Services

Biosciences and GeosciencesComputer Automated EngineeringDigital Content CreationElectronic Design AutomationGovernment and Defense

CommunicationsComputing and Storage AggregationIndustrialMedicalMilitary

InfiniBand and Ethernet

ServersAnd Blades

Embedded

Switches

Storage


Enterprise Data CentersEnterprise Data Centers

EmbeddedEmbedded

Leading Customers / Growing MarketsSoftwareHardware OEMs

Embedded

Servers

Storage

COMPUTERS

Switches

End-Users

HighHigh--Performance ComputingPerformance Computing

http://www.redhat.com/


Providing End-to-End Products

Adapter ICs & CardsSwitch ICs

Reference Designs SoftwareEnd-to-End Validation

Blade/Rack Servers StorageSwitch

SWITCHADAPTER ADAPTER


Mellanox Product Roadmap

2000 2003 2004 2005 2006 20072001 2002

40Gb/s Total

160Gb/s Total

40Gb/s Total

480, 960Gb/s Total

40, 80Gb/s Total

20, 40Gb/s Total

1st Gen.

2nd Generation

3rd Generation

4th Generation

Adapter

Adapter

Adapter

Adapter + Switch

Switch

Switch

*Adapter Card Products Based on Adapter Silicon Not Shown

2.0 Adapter

Two 10/20/40 Gb/s InfiniBand or Two 1/10Gb/s Ethernet


Leading InfiniBand and 10GigE Adapters

Single-chip server and storage adapters•

Optimized cost, power, footprint, reliability

•

Ideal for blades and motherboards•

No additional PHY components required

Highest performing InfiniBand adapters•

20Gb/s (40Gb/s in 2008), 1us application latency

Highest performing 10GigE NICs•

17.6Gb/s throughput, < 7us application latency

•

Supports OpenFabrics RDMA software stacksMulti-core CPU optimizedVirtualization accelerationFirst adapters to support PCI Express 2.0

10 & 20Gb/s InfiniBand10 Gigabit Ethernet

(Copper)

10 Gigabit Ethernet (Fiber)


Powerful Trends Driving Large Markets

Clustering and Blades

ConsolidationMulti-Core CPUs

Virtualization Low-Latency

ConnectivityRequirements

Reliable

Power

Price

Scalable

Efficient

Performance

Industry Standard

Ease


Reliable

Power

Price

Scalable

Efficient

Performance

Industry Standard

Ease

ConnectivityRequirements

Convergence on InfiniBand and Ethernet

InfiniBandEthernetFibre

ChannelProprietaryConnectivityRequirements


Converged InterconnectCurrent Architecture iSCSI Storage

Ethernet Switch

Fibre Channel Switch

Ethernet

InfiniBand

Fibre Channel Storage

InfiniBand Switch

InfiniBand Storage

iSCSI StorageConverged Architecture with ConnectX – I/O Consolidation

InfiniBand Storage

InfiniBand or Ethernet

Low Cost Bridge

InfiniBand orEthernet

Fibre Channel

Fibre Channel Storage


Extending InfiniBand Leadership

Industry-Standard•

Established software ecosystem•

Wide range of system solutionsPrice / Performance / Power

•

20Gb/s node-to-node (40Gb/s in 2008)•

60Gb/s switch-to-switch (120Gb/s in 2008)•

→ 1us application latency•

Lowest power per Gb/s bandwidthReliable

•

HW reliability and congestion managementEfficient

•

RDMA and Transport Offload•

CPU focuses on application processingScalable

•

Tens-of-thousands of nodesService Oriented I/O

•

Security and Quality-of-Service•

Virtualization•

I/O consolidation including storage•

HW protection and isolation

Switch-to

-Switch

Node-to-Node

8Gb/s FC10Gb/s Ethernet

2004 2005 2006 2007 2008

3040

1201101009080706050

1020

Gigabits per secondPerformance Roadmap

60Gb/s

20Gb/s


InfiniBand Leads Price/PerformanceAdapter Card

PriceSwitch

Price/PortTotal Price

Price per Gb/s

20Gb/s InfiniBandDual port Copper

$718 $295 $1,013 $51

10 Gigabit EthernetSingle port CX4

$790 $651 $1,441 $144

4Gb Fibre ChannelSingle port w/ SFP module

$942 $550 $1,663 $416

Gigabit EthernetSingle port

$100 $120 $220 $220

All prices are fixed format, stand-alone productsAll prices median of available distributors or online retailer pricingAdditional information available upon request

*All prices are end-user, single unit prices InfiniBand Dual-port adapters include high availability option at no extra cost !


Addressing Large and Growing Markets

Source: and

17.0M ports

2006

Storage2.6M

Storage4.7M

Servers11.8M

Servers7.7M

10.6M ports

2010

Overall: 13% CAGRServers: 11% CAGRStorage: 16% CAGREmbedded: 14% CAGR

Embedded 0.5M

Embedded 0.3M


InfiniBand Market Forecast

40% total factory revenue CAGR•

$157M in 2006 to $837M in 2011

Growth drivers: Multi-core, virtualization, expansion into enterprise data centers

InfiniBand Adapters and Factory Revenue(29% Revenue CAGR, 50% Shipment CAGR) Source IDC May07

$-

$50

$100

$150

$200

$250

2006 2007 2008 2009 2010 2011

Rev

enue

$M

0

200

400

600

800

1,000

Ada

pter

s 00

0s

Revenue

Adapters

InfiniBand Switch Ports and Factory Revenue(45% Revenue CAGR, 53% Shipment CAGR) Source IDC May07

$-$100$200$300$400$500$600$700

2006 2007 2008 2009 2010 2011

Rev

enue

$M

02004006008001,0001,2001,4001,600

Switc

h Po

rts

000s

Revenue

Sw itch Ports

InfiniBand to Transcend HPC

InfiniBand Technology Set for IT Explosion, IDC says

InfiniBand Boosted by Upbeat Report

InfiniBand Rides HPC Wave Into the Enterprise


InfiniBand Data Center Value Proposition

15%-70% increased infrastructure utilizationReduced TCO by $10M/year

Reduces latency by up to 46%Throughput nearly doublesAutomated trading applications

Eliminates 2/3rd of mean latencyEnhance predictability of data deliveryAlgorithmic trading, market making, arbitrage

Improves predictability and performance up to 4XData distribution, web services, order management systems, Java, C, C++ and other interfaces

Multi Fabric Server I/O VirtualizationReduce I/O cost 60%Reduce I/O power ~30%

World record transaction benchmarks2.5X Price/ Performance Advantage

VirtualizationDatabase Service Oriented Architecture

Market Trading and Data FeedsFinancial Services

* Partial List


InfiniBand HPC Value Proposition

Automotive Oil and Gas Fluid Dynamics

* Partial List

3X simulation efficiency increaseCar crash simulations eliminates the need for physical testing

Reduce reservoir modeling simulation runtime up to 55%Improves interpretation and modeling accuracy

3X performance improvement and near linear scalingIntensive simulation for computer-aided engineering

5X the bandwidth for real-time color gradingHigh-resolution commercials and feature films

3X improvement for post Optical Proximity Correction tools processing6X storage performance advantage

Monte Carlo simulation, astronomy, bioinformatics, chemistry and drug researchAccelerate parallel execution of matrix operations

Oil and GasAutomotive Fluid Dynamics

Electronic Design AutomationDigital Media Computational Science


88 135 293529

1,130

2,305

3,528

4,946

2000 2001 2002 2003 2004 2005 2006 2007

140 162220 267

409

732

1,021

1,221

2000 2001 2002 2003 2004 2005 2006 2007

Escalating Computing Needs

Computing market growth and increasing number of portsDiverse set of applications•

High end HPC, commercial HPC and enterprise data center•

Government, universities, research •

EDA, automotive, technical computing, oil and gas, manufacturing, weather•

Transportation services, IT services, utility computing, food industry, financial First Petaflop cluster expected in 2008

Total # of CPUs in the Top500 (000s)

Total Performance of the Top500(TFlops)

2000-2007 CAGR = 35%

2000-2007 CAGR = 80%

Source: Jun07


18

102

30

89

4080 82

207

47

132142

212 249 256

215

GigE Myrinet InfiniBand

(19%)

InfiniBand Momentum / Ethernet Ubiquity

Trends from Top500 propagate to enterprise marketsInfiniBand is the only growing high speed interconnectMajority of the largest supercomputers utilize InfiniBandInfiniBand is the leading interconnect in the Top 100 supercomputers

Source:

Number of Clusters in Top5001 year growth (decline)

(47%) 230%

6/05 11/05 6/06 11/06 6/076/05 11/05 6/06 11/06 6/07 6/05 11/05 6/06 11/06 6/07

Jun07


The Management Team

Name Title Experience

Eyal Waldman CEO, President & Chairman of the Board

Michael Gray CFO

Roni Ashuri VP Engineering

Shai Cohen VP Operations & Engineering

Michael Kagan VP Architecture

Thad Omura VP Product Marketing

Marc Sultzbaugh VP Worldwide Sales

ASK Computer Systems

Brooktree Semiconductor


Strong Revenue Growth (Annual)

Annual Revenues ($M)

2001 2002 2003 2004 2005 2006 2007

$1.7 $4.0

$10.2

$20.3

$42.1

$48.5

$58.2-$58.7

3Q’07Guided$21.5 –$22.0

1Q-3Q


Strong Revenue Growth (Quarterly)

Quarterly Revenues ($M)

$21.5-$22.0

$19.8

$10.0

$7.7$7.6

$6.0

$3.6$3.0

$12.2 $12.2

$8.5

$10.8

$15.8$16.9

$13.4

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2004 2005 2006 2007

Guided


Strong Revenue Growth (Annual)Historical Annual Revenues ($M)

2001 2002 2003 2004 2005 2006 2007

$1.7 $4.0

$10.2

$20.3

$42.1

$48.5

$58.1-$58.6

1Q-3Q


Strong Revenue Growth (Quarterly)Historical Quarterly Revenues ($M)

$21.5-$22.0

$19.8

$10.0

$7.7$7.6

$6.0

$3.6$3.0

$12.2 $12.2

$8.5

$10.8

$15.8$16.9

$13.4

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2004 2005 2006 2007

Guided


Margin Structure & Profitability

75%72%

64%

57%

2004 2005 2006 1H 2007

(43%)

8%

16%

2004 2005 2006 1H 2007

Gross Margin EBIT Margin27%


Accelerating Cash Flow from OperationsQuarterly Cash Flow from Ops ($M)

$394$784

$3,131

$4,772

$6,694

$5,000

Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07

2006 2007


Percentage-Based Income Statement

2005 2006 1H 2007Revenue 100% 100% 100%Gross margin 64% 72% 75%R&D 31% 31% 31%SG&A 25% 26% 24%Operating expenses 56% 57% 55%Operating income 8% 15% 20%Net income 8% 15% 24%


Financial Highlights

Significant Revenue CAGR

Strong Gross Margins

Profitable Since 2005

Accelerating Cash Flow Generation


Mellanox Differentiators

Industry-Leading Architecture & Mixed-Signal DesignExecution and Product Quality•

Silicon, Software, and Systems

•

Proven high-volume manufacturingWell Established Relationships•

Leading Server, Storage, Communications Infrastructure Equipment and Embedded System OEM customers

•

Software and hardware partners•

End users

Team•

Technical, Business and Management


Summary

Leader in silicon-based, high-performance connectivity solutionsMarket-wide adoption of InfiniBand •

Servers/blades, storage and switch systems

•

Data Centers, High-Performance Computing, Embedded•

Performance, Price, Power, Reliable, Efficient, Scalable

4th Generation adapter extends connectivity to InfiniBand and Ethernet•

Market leading performance, capabilities and flexibility

Driving key trends in the market•

Clustering/blades, low-latency, I/O consolidation, multi-core CPUs and virtualization


Thank You

30

Mellanox Corporate Pitch · Business HQ in California ... Computing market growth and increasing...

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