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Emulex CEO Eyes Network Dollars

Stocks in this article: ELX NTCT

NEW YORK ( TheStreet) -- Jeff Benck, the new CEO of server component specialist Emulex (ELX - Get Report), sees a massive opportunity in network monitoring following the company's acquisition of Endace earlier this year.

Emulex, known for server and storage interconnect technology, completed its $127 million purchase of NetScout (NTCT - Get Report) rival Endace in April, and sees its network monitoring devices as a path to new revenue.

"We have insight into the servers, and now we can monitor what's on the wire," said Benck, in an interview. "It's a key growth opportunity for us - we're playing in a market that's $600 million and it's growing at 25% compound, annually."

The CEO described Endace's technology as a "DVR for your network," recording traffic which can then be analyzed for security threats and performance problems.

"With all the aggressive threats out there, for the enterprise being able to understand what's going on and get to the root cause of problems on your network is more and more important," said Benck, who took over from Jim McCluney this week.

Emulex reported preliminary fourth-quarter results this week, but did not break out any specific numbers for Endace.

"We will give more color on the forthcoming earnings call," said Benck, but noted Endace is gaining traction. "We have got a lot of exciting new customers in the cloud space, some of the Web giants are starting to buy Endace - we're not quite ready to share names, but we're really excited about some of the customers that we have added."

Emulex has not yet released the date for its earnings conference call, although its fourth-quarter results are typically announced in the second week of August.

Shares of Emulex have climbed more 14% this year, most recently buoyed by sale chatter swirling around the company.

Benck, however, declined to comment on the recent Bloomberg report that Emulex has hired Goldman Sachs (GS) to seek potential buyers.

Emulex shares dipped 0.12% to $8.31 in Friday trading.

--Written by James Rogers in New York.

>To submit a news tip, send an email to: tips@thestreet.com.

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