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In a down economy, the rich get richer and the poor go broke

In an economic downturn, not everybody makes it through in one piece. Though the storage market has fared better than many (apparently the list of things in life you can count on has been expanded to three: death, taxes and data growth), it isn’t without its casualties. Ciprico and Agami are the two latest.

The Minneapolis-Star Tribune reports that storage controller startup Ciprico has filed for Chapter 11 bankruptcy. According to an analyst quoted in the Star-Tribune story, “Ciprico spent too much cash last year building a sales force to sell a radical new disk storage product that consisted only of software rather than a computer device…Ciprico had the funds and burned them up too quickly.”

Ciprico reported a loss of $3 million on $2 million in revenue for the first quarter of this year, then  laid off 30 percent of its staff in March.  Ciprico CEO Steven Merrifield told the Star-Tribune he hopes to sell off the company’s technology

Poor judgment in the spending department may have been a factor, but Storagezilla also attributes the downfall of smaller companies to the general economic climate. “During a downturn the bigger players get bigger while the smaller ones collapse or are picked off via acquisition,” he wrote – in the midst of reporting that NAS vendor Agami has folded.

I since received confirmation from an Agami source that it has indeed gone out of business, although its web site and phone system are still functioning. In today’s economic climate,  it wouldn’t be surprising if more “on the bubble” storage companies bite the dust.

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