Exabyte to merge with Ecrix

By Kevin Komiega, assistant news editor 24 Aug 2001 | SearchStorage

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There was a shakeup in the tape market Thursday, when a pair of Boulder, Colo.-based tape companies, Exabyte Corp., and Ecrix Corp., announced that they would merge.

The deal breathes life into the struggling Exabyte, which has been struggling financially, and gives the startup Ecrix access to a worldwide sales and support organization for its entry-level VXA tape technology.

Until now, Exabyte has been unable to effectively penetrate the low-end tape market, according to Robert Amatruda, research manager, tape and removable storage, for Framingham, Mass.-based IDC.

"The challenge will be to position their respective technology roadmaps," said Amatruda. "[The merger] gives them each better footing to compete more effectively with the likes of Quantum, Sony and HP."

The problem, said Amatruda, is that while both companies use 8mm technologies, they are not compatible.

"Their drives are similar in form, but their technology is very different," he said.

When the merger closes later this year, the company will operate as Exabyte Corp., and will offer both Exabyte's MammothTape and Ecrix's VXA tape technologies.

Exabyte's Mammoth tape and drive system uses a helical scanning technique for transfer data and can hold 40G Bytes per cartridge, while Ecrix's VXA technology uses data packets and a complex tracking and error correction system to transfer data. VXA cartridges can store 33G Bytes each.

Exabyte is salivating over a chance at the installed base of DDS tape users that will soon be looking for a new tape format. Ecrix's VXA tape gives Exabyte a foot in the low-end door.

Sony, Seagate and HP discontinued their respective DDS product lines earlier this year.

Exabyte will secure the deal with 10 million shares of stock in exchange for all of the outstanding equity of Ecrix. In return, Ecrix's investors have agreed to pump $9.4 million into the newly formed company.

Exabyte said the new equity investment will let the company capitalize on its strengths in tape automation and broaden its portfolio of tape libraries utilizing MammothTape, VXA, LTO Ultrium, SDLT and AIT drive technologies and media.

Juan Rodriguez, chairman and CEO of Ecrix, co-founded StorageTek, Exabyte and Ecrix, and will return to Exabyte to serve on the board of directors and as the company?s chief technologist.

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