InPhase succumbs to the darkness

Holographic light at end of tunnel was an oncoming train

Holographic storage company InPhase Technologies has paid off all its employees but is still looking for a venture capital white knight. The dream still flickers, it's just temporarily out of phase.

According to a report in the Longmont Times-Call, the last 60 employees have been paid off after working for a year on minimum wages. Their commitment was pretty high, but now they are not hopeful of any good news, however much the board and CEO Nelson Diaz say new funding is feasible.

The employees had been told they would get their back pay once a funding round completed. It never did and the cash has run out.

InPhase built its Tapestry holo storage device using $180, 300GB optical disks and a drive initially priced at $18,000, targeted at media archiving applications. The write speed was slow, just 20MB/sec, and the company experienced multi-year delays in bringing the product to market. Being reliant on optics, the problem of predictably stabilising and positioning mirrors proved to be one of several huge issues.

The trouble with optical archive storage is that it is too slow, holds too little data, and is vastly more expensive than either deduplicated disk or tape. The technology is venomously difficult to productise and there is no optical enterprise storage market outside the entry-level stuff like DVDs and CDs, where a mass consumer market holds down the costs of media and drives.

All attempts to generate business optical storage products without a consumer base to build on have foundered - witness Plasmon and others.

InPhase picked up a total of around $95m in funding, with a D-round in January 2008 bringing in $20m. It's all gone, flushed down the optical business pan. Any VC wanting to invest to try and resurrect it will need a deep wallet and a willingness to gamble against the odds that the technology is viable. So far, all it's done is prove to be a dead-end. ®