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Steptoe storage vendors cash in on junk platters

Why tech that could extend disk life was rejected

Seagate's ISE exit

In the event Seagate decided not to proceed with the ISE project and managed to sell its Advanced Storage Architecture group to Xiotech in July 2008.

One problem; Xiotech didn't have enough money. Step forward Stephen Luczo, then Seagate's chairman, who himself leads a finance round that results, a couple of weeks later, in a $40m equity investment in Xiotech. Luczo becomes a member of Xiotech's board and Sicola's group continues its work at Colorado Springs under Xiotech ownership and management; Sicola becomes Xiotech's CTO and Lary runs ASA inside Xiotech as its Advanced Solutions Group.

"I think it's probably fair then to say then that ISE is already among Seagate’s biggest product failures," says Wendel. "And there’s a common theme here. IBM's fantastic "IceCube" technology (and) Seagate's ISE - huge development costs and five years of high-level strategic focus from the biggest storage company on the planet, yet it never generated any revenue for Seagate and was ultimately sold off (presumably at a big loss).

"Both of these products had the potential for delivering a huge step-function increase in data-center reliability and managability, but even with IBM and Seagate behind them, they failed. End-user customers want product reliability, but let’s face it – fixing stuff that breaks reliably is a profitable, recurring revenue stream."

How have they done since then?

In March 2008 Atrato, now located in Westminster, Colorado, launched its Velocity 1000 array. Xiotech launched its Emprise array product in April that same year. Two companies launching what looked like roughly similar products but with independent IP.

Wendell himself left Atrato before the product was launched and is now working at a stealthy start-up developing technology he invented while at Sherwood Information Systems. Subsequently Atrato has announced sales to about 15 customers, not a lot, and sought more investment funding.

Xiotech has enjoyed much more sales success; almost 1,200 Emprise units have been shipped in the ten months since its launch.

A conclusion to be made is that established vendors will tend to reject new technologies that threaten revenues from existing business models without very good reasons. Sealed canisters of drives could have put a severe dent in disk drive-based break-fix service revenues and there was no compelling reason for them to adopt the technology at all.

Xiotech's 1,200 units and Atrato's 15 are a drop in the ocean of storage array sales and won't change a thing. Perhaps when Xiotech reaches 10,000 units the other vendors will sit up and take notice. ®

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