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StorageTek hammers out OEM deal with Permabit

Users can expect low-cost compliance products from StorageTek through an OEM deal with Permabit, sources say.

StorageTek Corp. plans to take on EMC Corp.'s Centera compliance product through an OEM deal with Cambridge, Mass-based Permabit Inc., has learned.

According to sources familiar with the agreement, who wished to remain anonymous, StorageTek will OEM Permabit's Permeon Compliance Vault product, which turns generic servers and storage into a compliant CAS (content addressable storage) system. The deal, which is likely to be non-exclusive, is expected to be signed within a few weeks.

For users, it will mean a significantly lower cost entry into the compliance market and a standards-based product. A Centera with 10.2 TB raw (roughly 5TB usable) has a list price of $191,000, or $18.7/GB whereas an entry-level 2 TB Permeon bundle lists for $60,000, or $30/GB.

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StorageTek spokesman Bob Wientzen would neither confirm nor deny that a deal is in the works. However, he did say that archival storage is a "significant pain point for users and fixed content is an important part of StorageTek's ILM strategy." He added, "We have a couple of ways we can go right now," but declined to say what these might be. "We'll be announcing something this quarter," he said.

When it does, StorageTek has some major catching up to do. Centera has been shipping for two years, and word has it the company will shortly announce its 1,000th customer. Although that doesn't seem like many in the scheme of things, being first to market has given EMC significant mindshare in this sector. Other products ahead of StorageTek's planned offering include Network Appliance's NearStore, Hewlett Packard Co.'s RISS and IBM's Retention 450.

Sources close to the deal point out that StorageTek should own this piece of the market, given its background in archival data, which has traditionally lived on tape or optical devices. "Supplementing its installed base with a disk-based archiving product is a logical step for them," said an analyst who requested anonymity.

Centera's setbacks

Centera hasn't been without its problems, however, which StorageTek may be able to capitalize on. EMC has never released the performance numbers for the product, which it measures in objects per second. It claims to read and write hundreds of objects per second, which might sound good but objects can be different sizes, so this doesn't mean much.

The real issue concerns the time it takes to recover data that was originally stored on Centera and then moved to tape, for offsite storage. According to users familiar with the process, it is painfully slow. EMC skirts around the issue by saying that very few users are making copies of data stored on Centera in this way.

The second knock for Centera came at the Crypto 2004 conference in August where researchers demonstrated vulnerabilities in the MD-5 algorithm, which Centera uses to compute unique content addresses. It turns out these addresses might not be quite so unique. For the full story, click on the link in the related articles listed above.

Randy Seidl's up to StorageTek

An interesting aside to this story concerns the executive shuffling going on between StorageTek and Permabit, which may or may not be part of the OEM deal. Randy Seidl, Permabit's CEO recently left the startup to become head of east coast sales for StorageTek. Seidl reports to Mark Ward, head of sales at StorageTek, whom he worked with for many years at EMC. "It takes him back into a group that he has worked with before," said an informed source close to both companies. With the startup's former CEO driving and managing a significant portion of StorageTek's revenue, it should be easy for Permabit to make sure the partnership works out. Seidl has various incentives from his days as CEO to make sure that the company does well.

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