Quantum Corp., has taken a leap into the midrange network-attached storage (NAS) market.
Two months after reversing its decision to make its Snap Appliances business unit a separate company, Quantum has taken a different approach toward broadening its NAS product line by acquiring Western Digital Corp.-subsidiary, Connex Inc.
In an all-cash deal valued at $11 million, Milpitas, Calif.-based Quantum will buy Connex technology, intellectual property and other assets, and integrate them into Quantum?s Snap unit.
In addition, Western Digital will supply hard disk drives to Snap Appliances on a non-exclusive basis.
The acquisition is expected to close by mid-August and does not involve SANavigator Inc., a wholly owned subsidiary of Connex.
Ray Robidoux, president of the Snap Appliances unit said the technology from Connex would be used to complement and expand Snap's existing product line, and move from the workgroup into the midrange NAS market. Snap's products currently play in the entry-level NAS space.
As part of the deal, Quantum acquired about 22-23 employees, mostly engineers and software developers that have played an integral role in the development of the ConnexOS operating system, according to International Data Corp., analyst Brad Nisbet.
"Snap is clearly poised to leverage their brand recognition as they move into the midrange, but this does not necessarily mean success, nor does it mean they will crush the competition in the midrange space," said Nisbet.
While IDC lists Snap as the leader in overall NAS units shipped, a move to the midrange means competing with the likes of IBM, Procom, Compaq, Dell, Network Storage Solutions and Network Appliance.
Key to Quantum's move into the midrange is the Connex operating system, ConnexOS, which is based on Linux. Nisbet believes that Linux provides a better environment for adding the software features and functionality necessary for a midrange solution ? features such as snapshot, mirroring and the ability to manage multiple filers, etc.
"It is essentially these features and functionality that differentiate the midrange from the low-end," he said.
Nisbet said Quantum has to continue to add functionality through software in order to stay competitive. The acquisition of Connex, he said, will help Quantum quicken the process of adding the features and functions necessary for midrange NAS solutions.
IDC said that despite the economic slowdown, there is still strong growth in NAS.
IDC estimates that NAS is currently about 6% of the overall disk storage systems market, and will grow to be about 28% of the market by 2004. The last estimate of the NAS market - published in December of 2000 - puts worldwide NAS revenues at about $1.9 B in 2000 growing to $14.7B in 2004.Let us know what you think about the story, e-mail Kevin Komiega, assistant news editor
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