Imation Corp's recent restructuring left Nexsan storage as the company's main asset with a new leadership team...
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and shrunken product portfolio.
Imation acquired storage system vendor Nexsan for $120 million in 2013. Imation is now the holding company, and Nexsan is the operating company, wholly owned by Imation. The Nexsan storage product line-up consists of:
- NST unified NAS/SAN hybrid storage, using solid-state drives (SSDs) and hard disk drives (HDDs), for block and file data
- E-Series and Beast (formerly known as SATABoy and SATABeast) high-density disk-based block storage systems
- Assureon object and archival storage
- Transporter enterprise private cloud sync-and-share appliances, which came through Imation's October 2015 acquisition of Connected Data
Before the restructuring, Imation also sold security and tape products for businesses as well as flash storage devices, thumb drives, DVDs, Blu-Ray discs, CD ROMs, headphones and speakers for consumers.
"When a group of us got involved with the business about a year ago, we saw that they were struggling to make money in some of these lines of businesses and consuming a lot of cash," said Bob Fernander, interim CEO of Imation and Nexsan. "We looked at what assets we thought should continue and which we needed to wind down."
Imation sold its RDX removable hard drive business last August to Sphere 3D Corp.'s Overland Storage subsidiary for approximately $6 million. In January, Imation sold its corporate headquarters in Oakdale, Minn. for $11.5 million and its Memorex trademark and two associated trademark licenses for $9.4 million. In February, Imation unloaded its IronKey security to DataLocker and USB technologies to Kingston Digital.
"Going forward in our eyes, it's all about Nexsan," Fernander said.
We spoke in depth with Fernander about Imation's new direction and the Nexsan storage portfolio.
What is Nexsan's storage strategy?
Fernander: The historical center of gravity for Nexsan sales has been block storage. The old SATABoy and SATABeast were block storage solutions that were bullet-proof from the point of view of availability but low cost as well. Today, a large majority of our revenues are derived from sales to customers that are using that for secondary storage use cases -- backup, archive, things of that nature.
We just recently re-launched a product called Beast, which is a refreshed, cost-optimized version of our block storage product. Then we have E-Series, which is the higher performance version of the solution, a little bit more expensive. And you'll see us later in the year bring out a new controller that's even higher performance than that.
What you'll see change is we have an archive called Assureon, which is used for regulatory compliance, kind of like an EMC Centera product. Think of it as just a mid-market version of that.
And then we have NST, which is a primary storage product that provides NAS services as well as SAN services. We sell it primarily to middle-market customers. What you'll see in the future is a value proposition to customers that begins to enhance our offerings in primary storage through the integration of services on the NST platform, meaning sync-and-share services as a component of the head as well as integration into the Assureon regulatory archive product.
So, we'll have three tiers of product for customers at different price performance points on the block storage side. There'll be an expansion of products there as well as an expansion of capabilities in the primary storage product offerings.
Who do you see as the chief competition for Nexsan storage products?
Fernander: Today, when we sell block storage, we compete primarily with Nimble and some of the more established players there. On the NAS side, we almost always compete with NetApp.
How does Connected Data fit into the Nexsan storage business?
Fernander: We merged the companies, and most of the executives at Nexsan actually came from Connected Data. Nexsan is the business. Connected Data's brand goes away. But the product that Connected Data brought to the portfolio, called Transporter, remains.
Transporter is a piece of software that provides private cloud sync-and-share services. And it's our intent to integrate that into our primary storage product, NST, and to also do further innovation with our archive product, called Assureon, such that we have a seamless solution that allows people to push and synchronize data that's on primary storage as a feature of our NAS hybrid offering.
One of the reasons we were excited about the acquisition of Connected Data is it holds two already granted patents that are quite simple and high level but we think are of extraordinary value. Today when people share data in a cloud-like scenario -- say Dropbox or other services like Dropbox -- they have to push their data to the cloud and then people synchronize their independent devices to that instance of the data in the cloud. That provides for a handful of challenges, not the least of which is security. We have a lot of users that are very sensitive to what their users put in the cloud.
Take financial services as an example [which] is precluded from using cloud-based servers through their compliance officers and regulatory requirements. Even in healthcare and other areas where we're active right now, we're finding people appreciate the ability to keep that data private but simultaneously provide the same services to their clients via mobile device access to the data.
Who are your main competitors in that space?
Fernander: Box and Dropbox … Everybody has realized, including Box and Dropbox, that there's an extraordinary expense to keeping a replicate in the cloud. And it's not only just the cost to store the information in the cloud, because there's a copy of it inside the firewall that's part of the user's primary storage, so you've now got two copies. There's the transmission expense up to the cloud. And then downward, we find in workgroup scenarios, there [are] connections coming downward from the cloud to all the mobile devices. So you've got an expense that's quite high when you use the public cloud. In a private cloud scenario, you're simply doing a peer-to-peer sync that's established via a connection broker that sits in the cloud.
Skype is a good parallel. Today when you make a Skype telephone call -- whether it's Skype to Skype, or Skype to a regular telephone -- the Skype service connects the two peers together and gets out of the way. It's simply a way to make a connection. That's what we do in our private cloud sync and share service. That's the heart of the IP that we have.
Do you have plans to enable your products for public clouds?
Fernander: Some people use us that way, but that's not our stated direction. Our stated direction is to do the thing that comes after cloud, which is supported by the patents we acquired from Connected Data. That's using this notion of a connection broker in the cloud to allow for peer-to-peer services that are cloud-like but avoid the cost and the security risk from using cloud.
Do you have evidence suggesting that enterprise users prefer private clouds to public clouds?
Fernander: There's close to 2,000 users of the Transporter standalone product. And those customers range from very large corporations to small businesses. Almost all of them have said, "Gee, we really wish you could put more primary storage features into Transporter because we'd just like to archive our data or use a single NAS device to write for primary storage and then make it accessible to all of our users based on traditional security protocols."
Is common management available for the Nexsan storage product lines?
Fernander: There's not. Today, they're each independent. As we pull together Assureon and Transporter, you'll see that begin to converge, but right now, they're independent management interfaces.
The block storage products all have a common mechanism for management. It's relatively straightforward for the new Beast product, the E-Series and the next-generation E Series.
When you get to the [NST] primary storage product, there's a single management interface for that. Once we've integrated Transporter into that, it will fall under the management of the NST.
Assureon is unique in that it is a compliance archive. Think of it as an object store that provides for immutable maintenance of data. Customers put data into it so it can't be destroyed or changed. You can certainly add revisions to the data, but you can always wind back to see what happened, who changed it, et cetera. That object store product is really looked at as a separate and independent storage platform. What we're doing now is integrating it in such a way that you can have a policy-based mechanism to migrate data from primary storage to the archive, and that'll all fall under the umbrella of management for the NST.
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