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Quantum spins up disk sales as tape withers

Quantum might have turned the corner with its disk backup and storage software products last quarter, just as its tape sales took a big dip.

Quantum reported $42.4 million in revenue from disk and software last quarter, topping the $40 million it needs to break even on those products for the first time. Disk and software revenue grew 18% year-over-year, and CEO Jon Gacek said it could hit $50 million this quarter.

However, a steep decline in tape sales caused Quantum to lose $4.9 million on its $147.3 million in overall revenue. Gacek blamed the tape sales drop on customers waiting for the transition from the LTO-5 to LTO-6 format. Quantum’s overall revenue fell 3% from last year, mainly because of a $13.6 million drop in OEM tape automation sales.

Quantum’s disk and software category consists of its DXi disk deduplication target appliances, vmPro virtual machine backup and StorNext archiving for large files. Revenue from those products increased 18% year-over-year and 38% from the previous quarter. Gacek said the DXi8500 enterprise platform increased 30% year-over-year and 129% sequentially, the midrange DXi6700 slipped 6% and the entery-level DXi4000 was up slightly.

Gacek also said the DXi win rate was 55% against the competition, which in almost every case is EMC Data Domain. He said the win rate was even higher for the DXi8500 despite EMC’s attempts to throw its weight around.

“EMC is not trying to compete based on products,” Gacek said. “They’re trying to play the big-company gain of saying ‘We’re the market share leader, we’re so much bigger than [Quantum], look at [Quantum’s] market share, they don’t even make money.’ Sometimes that works, but sometimes it backfires with customers looking to make a technology buy.”

Quantum added 120 new DXi customers and 65 StorNext customers in the quarter. It sold the first of what Gacek called a “wide area storage” product combining OEM object-storage technology from Amplidata with StorNext.

“That’s not even generally available yet, but one customer was super excited and took a pre-GA system,” said Gacek, adding the customer was a government agency.

Quantum forecasted an uptick to $160 million in revenue this quarter. Gacek said besides a possible tape rebound, he’s looking forward to continue increases in disk and software and early sales in Quantum’s fledgling Q-Cloud backup and disaster recovery offerings.

“If we’re going to be a specialist in backup, we have to give the customer different than the competition,” he said. “EMC doesn’t offer anything like [Q-Cloud}, and I don’t think they will. I don’t thik the revenue piece is as important as our ability to engage with the customer in a provocative way. “

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