SETAC Drives Revenues at Silicom

Zacks Small Cap Research

By Ken Nagy, CFA

On May 28, 2013, Silicom Ltd, (SILC)  the Israel based provider of high-performance server and appliances networking solutions, reported it achieved a major SETAC design win from a dominant provider of appliance solutions for the Network Security, Application Delivery and Storage markets.

SETAC, the firms newly patented Server to Appliance Converter, which combines the best of standard servers with hardware appliances has been gaining acceptance in the past three years and is driving revenues and the stock price.

The new customer selected Silicom’s SETAC Server To Appliance Converter kits and modules to use in two appliances within one of its product lines and Silicom’s management believes the design win will ramp to approximately $1 million per year in revenue.

In this case, the customer will be integrating a wide range of SETAC products, including SETAC kits, 1Gbps modules and 10Gbps modules in copper and fiber, in both 1U and 2U appliances.

Furthermore, it should be noted that the customer is considering the use of SETAC in other appliances and product lines, which could possibly generate several million dollars per year in additional revenues for the Company.

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SETAC Explained, The best of both worlds


SETAC, which is Silicon’s newly patented, product family converts standard servers to network appliances and is designed for systems that require front I/O ports, I/O ports replaceable without opening the system chassis, high quantity of I/O ports and flexibility to provide high quantity of different configurations.

When n
etwork appliance providers design their network appliances, they can either use a general server or a specific appliance oriented hardware solution. The server with standard add-on adapters assures server-grade reliability and a stable state of the art technological environment but sacrifices flexibility. On the other hand using specific appliance- oriented hardware solutions allows for superior flexibility and field-re-configurability but lacks in server grade reliability and technological stability.

S
ETAC offers the benefits of these two options, enabling branded high technology servers to be configured as hardware appliances, and creating an ideal network appliance that combines server grade reliability, front- end access, field- replaceable architecture and a stable state-of-the-art technology environment.

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