january 2008 / volume 21#1 / issue no. 240 … newsletter 240.pdfall in 2002 and 2003. it was...

(Source: StorageNewsletter)

January 2008 / Volume 21#1 / Issue No. 240

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GEORGE TEIXEIRA, DATACORE’s CEO : “WE WILLPROVIDE A FRAMEWORKTO INTEGRATE SAN AND NAS”

STORAGE START-UPs:INVESTORSTIGHT-FISTED IN 2007

(continued on page 7)

StorageNewsletter: Why did you choose Florida, atourist state with very few storage and IT compa-nies, rather than California, Colorado or Massa-chusetts?Teixeira: It turns out that Florida was actually the hometo a lot of the space program. And the original foundersof Datacore were from the space program and theaerospace industry. We used to work for a companycalled Systems Engineering Labs, which becameEncore. And we were the group that did nuclear powerplant control, we did telemetry for the NASA spaceshuttle, so what we learned was if you're doing nuclearpower control, you learn how to do fail-over. If youknow how to do telemetry, you know how to do high-speed I/O. So what we though, as a bunch of scientistswho wanted to use high-speed I/O and fault tolerance,where do you apply it? Storage was a natural, that'show we got into it. Now it also turned out that we were,our office in Fort Lauderdale is right next to Citrix. Andthe reason Citrix and Datacore are there is becauseIBM, in Boca Raton, was the founding of the PC, somany of our engineers also come from the same worldthere.What was wrong with your company that led you todownsized and undertake an MBO?What was wrong? It's very easy, we were a small com-pany, and after the dot.com crisis, every small compa-ny suffered, everybody in the business world wanted tobuy from IBM, HP, they wanted to go safe. So the

From 2006 to 2007, the total number of financialrounds for storage start-ups fell from 62 to 52, for atotal amount of $477 million.

This figure is down 29%, since just as significantly, theaverage investment per round also dipped from $10.8million to $9.2 million, the lowest figure since 2003, theyear we began undertaking this yearly survey. VCs are still interested in storage technology, but theyare looking more closely before they take out theircheckbooks. On the other hand, there have never beenas many IPOs (6) as there were this year.

NUMBER OF STORAGE START-UPsLAUNCHED EACH YEAR SINCE 1996

13 13

29

58

93

55

47

37

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20

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1996 20042003200220012000199919981997 20062005 2007

StorageNewsletterI

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T H E I N T E R N A T I O N A L M O N T H L Y N E W S R E P O R T O N T H E W O R L D W I D E S T O R A G E I N D U S T R Y

2 StorageNewsletter© January 2008, Vol. 21#1 Issue No. 240

We tallied only five new start-upsfounded in 2007, but the figuremust be taken with a grain of salt,and could easily increase, given thepossibility of companies still instealth mode, which do not wish toappear in our study - fear not, wewill find them eventually, and addthem to our database.So it was this time last year, whenwe had only smoked out two,merely to find another six comecrawling out of the woodwork laterin the year. Nevertheless, the num-ber of storage start-ups foundedeach year has been in steady decli-ne. We will probably never see thelikes of 2000, a banner year with arecord 93.

276 start-ups alive, 75% in U.S.According to our figures, there arecurrently 276 storage start-ups inoperation throughout the world,and their geographic spread givesan indication of the various levels ofR&D underway in the differentregions. 75% are based in the U.S.,hardly a surprise. Next comesFrance (with 18), Canada (12), Israel(11), the U.K. (9) and Australia (4).Europe accounts for 14% of thetotal, but curiously enough, Asia isalmost entirely absent, with only

1%, although it could change withthe emerging economies of coun-tries such as China and India.France's strong performance mayhave something to do with the factthat this newsletter is published inParis, and our start-up detectingskills are particularly attuned to thismarket. Note, however, that apartfrom Atempo (whether it's French isdebatable), Arkeia and to a lesserextent Seanodes, and only recently,these firms have hardly any interna-tional profile.

More Wall Street than VCs2007 was thus a mixed bag forstorage start-ups: there was lessinvestment from VCs, but moreIPOs. Seen in a different light, WallStreet has a better feeling about thestorage industry than private inves-tors, something that is slightly odd,since at the end of the day, much ofthe money comes from the samepockets, only via different struc-tures.

Lower VC investmentsWe counted 52 financial rounds forstorage start-ups over the past year(see table, p. 4-6) for a total of $477million raised and an average of$9.2 million per financial round,

with all these figures at their lowestlevels since 2003. Why? Well forone thing, it strikes us that in recentmonths, there have been fewer“hot” or “hyped” technologies inwhich to invest.As usual, storage software is thewinner with 43% of the rounds forthe storage sector in 2007 (58% in2006), ahead of subsystems with34% (48% in 2006).The largest amount received by asingle start-up was $40 million for agroup headed by Seagate's chair-man Steve Luczo, Xiotech, a former... Seagate (big surprise!) subsidia-ry that acquired certain pieces ofSeagate technology just before thedeal. In 2006, the winner was Pillarwith the same amount. In secondplace, MAID company COPANdrummed up $32.4 million last year.18 start-ups received $15 millionand more, compared to 14 in 2006.The all-time record, not about to bebroken any time soon, is still heldby Cornice, a one-inch HDD manu-facturer that got individuals roundsof $54 million in 2004 and an enor-mous $97 million in 2005, whichsadly did not prevent it from thro-wing in towel early last year. As forthose still operating, and only thosefor which we know total invest-

2007 Start-upsNAME (LOCATION) ACTIVITY AND COMMENTSDrop.io (New York, NY) Web site to store and share files onlineOnPATH (Marlton, NJ) switch technology purchased from Brocade

created by former employees of McDataNirvanix (San Diego, CA) online storage services optimized for media

affiliated with MediaMaxSeval Systems (Palo Alto, CA) IBM's spinoff; new RAID architecture with two or three dimen-

sional array or "cube" for video and streaming; in stealth modeStorspeed (Austin, TX) products that the increase network storage performance

in stealth mode

Adesto Technologies (Sunnyvale,CA) venture-backed fabless semiconductor company working on a new type of computer memory; in stealth mode

Anobit Technologies (Herzelia, Israel) fabless semiconductor company developing novel solutionsfor the flash market; in stealth mode

Blade Network Technologies spun-out of Nortel(Santa Clara, CA) 10Gb Ethernet switchesin blade form factorCofio Software (San Diego, CA) VTL software

for an iSCSI serverFusion-io (Salt Lake City, UT) SAN on PCI with flash memoryMatrix Appliances (Marseille, France) D2D backup applianceStorMagic (Bristol, UK) backup iSCSI software and solution; also in Bloomington, MNUbiStorage (Boves, France) Ethernet backup appliance


THE FIVE START-UPS FOUNDED IN 2007 (KNOWN THUS FAR)...

... AND THE EIGHT FROM 2006

StorageNewsletter© January 2008, Vol. 21#1 Issue No. 240 3

ment, we get 153 companies in all,for $3.207 billion, or a total avera-ging $21 million received.

Among those start-ups still running,those that received the greatestamount of financing since theirinception continue to include Pillar($250 million) and BlueArc ($204million). If once again, we take intoaccount all the start-ups countedand for which we know total invest-ment since the dawn of time, weget an aggregate total of $7.94 bil-lion for 288 firms, or an average$26.6 million for each.

Six IPOs in 2007Of course, the main event in 2007was the long-awaited return aftermany years' absence of the U.S.stock market's interest in storagestart-ups. There were six IPOs in2007 - compared to four in 2006 -an enormous increase, given that

there have only been 16 since2000, and merely one for each of

2001, 2004 and 2005, with none atall in 2002 and 2003.It was Compellent that raised thelargest sum last year, $144 million,ahead of Netezza ($124 million),then Data Domain ($111 million),Mellanox ($102 million), 3PAR ($95million), and Voltaire (only $47 mil-lion).And of course, this new trendtowards IPOs may not end with thetwo firms currently set to go at thestarting line: Omneon seeking $115million and GlassHouse $100 mil-lion. There are other potential IPOcandidates (or for an acquisitionsuch as EqualLogic's by Dell):BlueArc, which has been mullingover the idea for the past few years(and even filed in September for$103 million, although the transac-tion was ultimately postponed, per-haps until this year?), as well asDataDirect, Diligent, ONstor, Left-hand, SEPATON or Xiotech.Recall too that one year ago, our

2007 Start-ups

Xiotech 40Copan Systems 32.4ONStor 27Fabrik 24.9GlassHouse Technologies 23.5Atempo 22Sepaton 22Expand Networks 213Leaf Systems 20ExaGrid Systems 20Verari Systems 20Woven Systems 20Exanet 18Anobit Technologies 17Mimosa Systems 17Blackwave 16Akorri 25Omneon Video Networks 15


No. of Total invested Average investment perYear startups during the year firm during the year2003 53 593 11.22004 76 820 10.82005 73 738 10.12006 62 671 10.82007 52 477 9.2TOTAL 316 3,299 10.4


Software 43%Subsystems 34%Connectivity 13%SSP 11%Storage and security 6%Fundamental technology 4%Infiniband 2%Note: Total exceeds 100% due tocertain start-ups' classification inmore than one sector


THE GREATEST FINANCIALROUNDS IN 2007:

$15 MILLION AND MORE(in US$ millions)

INVESTMENTS IN STORAGE START-UPsOVER THE LAST FIVE YEARS

(in US$ millions)

SECTOR BREAKDOWN FORTHE 52 STORAGE START-UPS

GETTING FUNDS IN 2007

SUCCESSFUL IPOs

Amount IPOCompany raised* yearStorageNetworks 2000 260BakBone 2000 NAMcData 2000 350FalconStor** 2001 -Xyratex 2004 48Rackable 2005 75CommVault 2006 161Double-Take 2006 50Isilon 2006 108Riverbed 2006 86

3PARdata 2007 95Compellent 2007 144Data Domain 2007 111Mellanox 2007 102Netezza 2007 124Voltaire 2007 47

* in US$ millions** became public via a merger withNetwork Peripherals


START-UPs ACQUIRED IN 2007

Total Price inCompany funding Buyer US$ millionsArchivas 28 HDS 100-120Acopia 85 F5 210Arsenal Digital 101 IBM NABerkeley Data Systems 1.9 EMC 76EqualLogic 52 Dell 1,400Evault 24 Seagate NAFileKeeper NA Yosemite NAIlluminator 5 EMC 10Neopath 29 Cisco NANeoScale 51 nCipher 1.95PolyServe 73 HP NASiafu NA Hifn NASiliconStor 12 LSI 55Silverback 51 Brocade NAZantaz 125 Autonomy 375


(continued on page 6)


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3PAR, Acronis, Compellent, DataDomain, Diligent, EqualLogic andLefthand. Our success rate? Four outof seven, which isn't too shabby.

Acquired start-upsFor the young sprouts, the other meansto profit for founders and investors is tofind a wealthy buyer, preferably a com-puter giant. There was no question forthe past year, it was iSCSI EqualLogic,acquired by Dell for the now well-known sum of $1.4 billion. Thirteenother start-ups fell into the hands ofmore or less large companies. As usual,EMC stuck out as the only company tobuy two of them during the year,Illuminator and Berkeley Data Systems(Mozy).

Analyzing the track records of all thestart-ups in our database, we concludethat a storage start-up has a 3% chan-ce of going public, 18% chance of fol-ding, 21% of being sold and 58%chance of continuing on its currentpath for another year, which isn't allthat bad, even if they don't strike gold.It's a tough job trying to come up withthe next killer idea in the storage indus-try. Many are tempted, quite a few havetried but only a few make it in the end.

J.-J. M.

COMPLETE STORAGE START-UP DATABASE

For any storage professionals interested inour storage start-up database, we offer thecomplete package for US$390.With more than 450 start-ups listed, inclu-ding 276 still active (i.e. currently notacquired, failed or seeking a public offe-ring), with the following data:- company name,- headquarters,- web site,- CEO,- year founded,- business activity,- yearly financial funding since 2003 andtotal received.It is also possible to search into the data-base by activity sector (software, subsys-tems, security, SSP, connectivity, funda-mental technology, Infiniband).To order this unique database (in Excelformat), send your enquiry to:[email protected] for an invoice by return mail.

(continued from page 3)


Teixeirainvestment… Now what's very diffe-rent about us is that almost all of thedot.com companies died. Datacore,instead, because we were founded bya group of people that went for a yearwithout salaries, when the marketwent bad, even though wedownsized, our people deci-ded that we believed andhad enough passion in ourcompany, in our products,that we bought our companyback, so I think that we arean exciting and wonderfulstory.Why did Hitachi Ltd, alongwith HDS (already in virtua-lization) and Intel Com-munications, invest inDatacore?I think for obviously their ownreasons, but I think inHitachi's case, Hitachi reali-zed that virtualization wasvery strategic. And frankly byworking with us, they reco-gnized that we were one ofthe top innovators of all thetechnologies, because wewere doing thin-provisioning,storage domains, hot-swap,storage pools, fault tolerancein software, and frankly byworking together, they learned a lot.And Intel?Intel, I think, was a more obviousthing. Intel recognized that, just likewith VMware, this virtualization wasgoing to sit on top of Intel platforms.So I think they wanted to learn aboutit. I also believe that they saw thatevery time we sold a Datacore, wewere selling another Intel platform, soit was a good thing.Ultimately, were you saved byVMware, which made virtualizationpopular?It's interesting. I hate to say saved. ButVMware has made a huge difference.What actually occurred: prior to theVMware, we had actually found thatthe resellers we were working werestorage resellers. And those storageresellers don't understand software.All they know is how to move a box.What we started working actually wasnot VMware, but with Citrix resellers,so CEMA in Germany was a goodexample, and those resellers unders-tood the software model. WhenVMware came along, what we reco-gnized very quickly, and this is threeyears ago, that if people could do vir-tual terminals, like they did with Citrix,or understood virtual servers, like they

did with VMware, they already unders-tood working in a virtual world. And ifyou think about it, Citrix makes termi-nals that float, they're kind of virtual,and you can apply them where youneed to. What VMware does is it

makes the CPUs, so you can applyCPUs where you need them. Or youcan apply the memory. What Datacoredoes is it takes the chain or the anchorto direct storage, and makes it a virtualstorage, so that our storage now canfloat to where you need. So we arepart of this whole virtualization move-ment to get CPUs, memory, disk andstorage that you can apply where youneed.Okay but when you speak with an ITmanager on virtualization, he willalways say VMware. Don't you thinkthat storage needs another word,since the two technologies are real-ly different?To me no. In fact, I would tell you it isa bit different, but from the standpointof the technology, what we've done isturn storage into an icon, that is hard-ware independent, and which getsbetter utilization of storage. Well, whatdoes VMware do? It turns machinesinto icons that are independent of thehardware. In fact, our tagline to ourpartners is 'Datacore does for storagewhat VMware and Citrix do for serversand desktops.'Yes, but now VMware has storagevirtualization software.They do, and they don't. They have,

any machine that is virtualized hasstorage. That is not the same as takingstorage that is in an entire companyand turning it into a tool that you canthin-provision and apply to differentpeople. So it's a very different idea.

It's like saying that when youemulate a PC on a Mac, yes,you're doing virtual storage,but it's not the same.But given that VMware isan EMC company, there isa risk…Of course. But the truth iswe've been in business 10years, 10 years ago, if I look-ed back, we were so faradvanced, and we are stilladvancing, but the truth is ittook the recognition of prod-ucts like VMware in the mar-ket for people to understandthe benefit of products likeDatacore. And the differencetoday is that at the time wetalked years ago, we werelucky to be doing a few hun-dred a year. Today we'redoing three, four, five hun-dred per quarter of thesesystems. And it's followingthe wave of the VMware-type people.

I have heard on occasion that it'srisky to use your proprietary soft-ware installed on a standard serverwith a large volatile cache.I don't know why, because if you lookat VMware or Citrix…I am talking about your product. Ona standard server…On any server…It's very dangerous to use proprie-tary software on a standard serverbecause you need high availabili-ty…But it is high availability…And you use a lot of volatile RAMcache, which is also dangerous.The simple answer is how do youmake a high-availability server? Wellthe way you do it is you take two com-puters. So how do you make a high-availability Datacore? You take twoIntel servers, you connect them withan Internet, Ethernet or Fibre Channel,and they run independently. And yes,we have cache on both sides, but it isno different of a design than if you goinside an Hitachi or EMC. EMC is anexample, if you look inside CLARiiON,there are two processors, which areolder Intel, there is Windows NTEmbedded, running the operating sys-tem, they call it Flare OS, and then you

George S. Teixeira, 51,president and CEO ofDatacore Software, co-founded the companyafter ten years of seniormanagement experienceat Encore ComputerCorporation, where heplayed a major role as ateam leader of OEM mar-keting and sales to

Amdahl, IBM, and DEC. His work culminated in the$185 million sale of Encore's storage control busi-ness to Sun Microsystems. He also held a number ofsenior management positions at the ComputerSystems Division of Gould Electronics. Teixeira is anative of Madeira, a Portuguese island off the coastof Africa. He earned his MBA at Florida AtlanticUniversity, after joint B.S. degrees in Chemistry andBiology. His hobbies include cycling, eating goodFrench food, and most of all playing racquetball,sometimes with his grown twin sons, both of whomare opera singers. Although proud of his sons'accomplishments, Teixeira does not enjoy opera.

(continued from page 1)


Teixeirahave disks. I mean, what is different,it's pretty much the same model,architecturally there is no difference.Where is the best place to havestorage virtualization? In-band,out-of-band, embedded in a direc-tor or in the disk array, eventuallywith your software?The truth is it has changed. The ans-wer to me is in-band, and the reasonit has to be in-band is because other-wise you can't impact performance.What we do is we accelerate the per-formance of the storage by usingmemory to make the I/Os faster. Butthe truth is with Datacore, we alwaysbelieved that portability is key, so wewere the first to - I can take a blade, Ican take a server or I can take a VM,and I can run Datacore on any ofthose right out of the box. So I cantake SANMelody, SANSymphony, Ican run it on two VMs, on two diffe-rent virtual machines, and I now havea high-availability server that doesnot even have hardware.Yes, but if you embed that in thedirector, you are in the heart andflow of the data. Isn't that better?From a technology stand-point, thereis no reason that it's better. The rea-son depends on what you need torun storage applications today. In theold days of IBM, it took a million linesof code. When EMC came along, youwent to two million lines of codes.Today to do thin provisioning andthese kinds of features, it's many mil-lions of lines of code. What thatmeans is you have to run on top of anoperating system, because you needmemory management, etc. Now whatthat really means is it has become anapplication that is sitting on top of anoperating system, which is sitting ontop of either a VM or hardware. WhatDatacore does, and we're proud of it,is we turn the storage control into aportable application. What VMwaredid was turn machines into a portableapplication. What Citrix does is thesame thing. So if you believe thatVMware can be successful and is theway to go for machines, that is no dif-ference from what we're doing for thestorage.Don't you think, in the end, that ser-ver and storage virtualization willbe included in the OS and thatconsequently, Microsoft, Unix,Linux or Apple OS will be the finalwinners?Absolutely. I do believe that. But it willtake years as it always has. And therewill be people who will evolve the pro-duct. We all though, ten years ago

when we founded the company, thatMicrosoft was going to be able to dothis, I still don't see it. Veritas wasgoing to be there, it's still not there. Sothe reality is that the idea is obvious,and I do believe it will become part ofthe operating system eventually, buthow long is eventually?You've said you're proud of thinprovisioning. How do you explainthat thin-provisioning is so popularnow that the prices of hard diskdrives are going down drastically?Independent issues. Thin provisioningmakes better use of a disk drive. Thefact that the disk drives are now avai-lable at better cost doesn't stop youstill from wanting better use. This islike saying why do you faster proces-sors on a PC when you really don'tneed them. People still want the maxi-mum utilization. The big advantage ofthin provisioning is that four terabytesof storage can look like ten terabytes.So if you look at, I would actuallyargue that it's also very powerful for

the “Go Green” kind of movement,because the big problem is that wehave, with our hospitals for example,because of doing things like PACS,where they're doing the x-rays andturning those digital, they're growingat such phenomenal rates that doingthin provisioning is a huge advantage.Last year, you launched virtualiza-tion software for iSCSI SANs forunder $1,000. What was the mar-ket's response?It's been our most successful productever. Of course. We shipped over 500licenses within the first six months.More importantly, most of those grow,because people realize that the capa-bility… one of the problems, to giveyou an example, is that people wantedto learn about thin provisioning, but toget thin provisioning today, you haveto buy a Hitachi or a 3PAR. How muchare those? Plus the hardware.Datacore, you can go to our website.You can download thin provisioning,that iSCSI software for $1000, you can

Company DataCore Software Corp.HQ Ft. Lauderdale, Florida Founded in 1998Financial rounds 1998: $2 million

1998: $6 million (first round)2000: $35 million (second round)2001: $37 million (third round)2004: $7 million (fourth round)2005: MBO (60% employee owned)

Total funding $87 millionCEO George S. TeixeiraActivity Storage virtualization softwareNo. of patents Half dozenAcquisitions RTware in 1999 (at the origin of SRM

software SANmaestro), Demand Technology Software in 2000 (monitoring software systems)

Sales $20 million to $30 million a yearNet income NA (profitable since two years)No. of employees 100Offices Reading, Berkshire, UK;

Munich, Germany; Sidney and Melbourne, Australia; Tokyo, Japan; Seoul, Korea; Taipei, Taiwan

No. of licenses shipped Approaching 4,000No. of customers Over 2,000Average price $199 (home), $1,000 (virtualized SAN for SMBs), per licence $10,000 (disaster revovery and high-availability)

$20-100,000 (SANmelody)Biggest customers IKEA (100 systems around the world), AxaOEM NEC SoftNo. of reseller partners 130 including 80 in EuropeBiggest ones Alternative Technology, CEMA, Centia,

Kramer & Crew, MagirusMain competitors EqualLogic, IBM (SVC), NetApp


Teixeiradownload and try it for 30 days. Soafter 30 days, what we found waspeople were just buying it. Now thatthey understand thin provisioning, andrealized its advantages, we saw thegrowth of the market.And you have a $199 product.What's that?It's a smaller, it's a version that onlysupports up to 2TB SAN, it's iSCSI, itdoes not include thin provisioning andit has a smaller cache.It's just to virtualize.It's just to virtualize, it supports maybe4 drives, so it's really just for homeuse.On which storage platforms do yousell the most?The most common is probably the HPMSA. Mid-range is the most common.Again it depends, the issue I have ismy revenues are equal betweenSANSymphony and SANMelody. Butmy unit count is four times as manySANMelody's because of the price.So I sell a lot more on top of HPs, buton SANSymphony, it typically is anEMC, Hitachi or IBM that is behindSANSymphony, so it's a differentclass.What is the percentage of yoursales on FC and iSCSI?Still very much more fibre channel. Iwould say 75% fibre channel, but it ischanging. It's very obvious becausewe're selling all of these $1000 SANs,so the percentages are starting tochange.The percentage of your sales asso-ciated with virtual servers?It's probably, new sales, I have to becareful, new sales is over 50%.In Europe, U.S. and Asia?Europe is about 60% of our business,the U.S. is about 30%, and thenobviously 10% is Asia.Why do you think you better inEurope?I like the food better…I think you told me once that inEurope, they don't like to be lockedinto one company as much, do youstill believe that's true?If you want the truth, I think I wouldactually modify that and say that wefound the level of the resellers andintegrators was better for software inEurope. They were more trained, morecertified. I'll give you an example,Germany is our biggest market, and Ithink it's because they do the certifi-cation, there was a group that learnedhow to do Citrix and VMware verywell, and we hooked up with themfairly early, and we've reaped the

benefits.Your percentages for software andservices?It's at least 80% product. We try to doas much of the service through ourpartners, so our business is reallylicensing product.Between OEM and the channel?Very small OEM, and we do no direct.Even though the company startedin 1998, do you still considerDatacore as a start-up, looking atan IPO, trying to be acquired orstaying private?Oh boy. I don't know what we are now,in reality. We have the agility and thepassion of the start-up, but we havethe experience of a ten year-old com-pany. We are profitable, we can runthe business at this point and growfrom our own profits. So I'm notdependent on being bought out.No, but you observed that WallStreet is beginning to pay attentionto storage…I mean obviously from our standpoint,we are in the business of maximizingour shareholder value, so if somethingarises. Our plan of record is to go toan IPO. From that point of view, weare a start-up.You don't know when?No, it depends on the market, andrevenues and everything else.Will you enter tape virtualization asFalconStor did?We can, and in fact we have in our laband all that, but I don't see a realbenefit for us as a separate product.The reason I say that is because wehave a product called Traveller thatdoes CDP. And in the CDP arena, wewill probably do some form of virtualtape, but it's because if I look at sto-ring the data, I may choose to store itwhere the line goes from disk to tape,I make it blurry, and now they can doit. But the truth is there are people outthere with VTL, and at this point, Idon't want to go and compete in anarea that's not our expertise.What's you opinion on FAN?I read the marketing, I don't know thatmuch about it, to be honest. To behonest I don't even know some ofthese words anymore, maybe I'm nottechnologist, NAS is a file system. Afile system by definition is virtualiza-tion. So I don't know, when they sayFAN, I think it's associated with span-ning multiple files…Will you offer a product for storagegrids?There is nothing… it's interesting,because I can run on a VM, because I

can run on a blade, we are alreadybeing run in some research projectsas if are grid computing.You already have CDP. When willyou add de-duplication for primaryand secondary storage?We have some stuff in the works, butit's probably too broad of a question,is my problem. There are products outthere for instance like WindowsStorage Server which does single-ins-tance.But that's not really de-dup.You're talking at the disk or blocklevel? We've been looking at it, buthave no dates yet.Do you intend to enter the archivingmarket?Not directly, there are many productsout there already. We will interface toit, or we will do the CDP…Roadmap? The roadmap is actually to create aframework which will integrate NASand SAN underneath us…Because today you don't manageNAS...That's correct. We will provide a fra-mework, and we will announce someof that in the first quarter that will inte-grate NAS and SAN, and will allow usto cache the NAS as well, so that wegive performance, because otherwiseyou can't scale, but more importantly,the idea is that you can add ourTraveller like CDP, so it can also doCDP for the NAS as well as the SAN.So you will go from block virtualiza-tion to file virtualization…We'll do both. We'll make an announ-cement in the beginning of the year…Did I miss an important question?You covered a lot… no, I think the big-gest thing is the impact of the virtualserver stuff. What I've seen is thatsomething like 85 of the virtual serversneed a SAN. The problem is if you geta SAN, it's expensive, so most of thesmall businesses can't afford it. Whatwe've found is this whole idea that wecan run on the hardware, we can runon the VMs, and then the $1000-typeSAN or 10,000 fail-over SAN bringsthe price, and that what's really drivingour growth right now. It's really to yourfirst point, which is that once peoplerecognize VMware and start recogni-zing that what you need to do thingslike VMotion is really have productswith a SAN, it drives the need to lookat our kind of solution.How many days of vacation did youhave this year?Two few… did I actually make ten? Imay have… it's not a good sign.


Hard disk drivesNew 1.3 hard disk drive

The most surprising HDD announcement for the new year is this new 1.3-inch hard disk drive. Only two lines ofdevices in this form-factor have been ever launched:- The KittyHawk by Hewlett-Packard with Citizen in 1992 (14.4MB and 21.4MB) and in 1993 (42.8MB)- Two models (175MB and 350MB) in 1996 from PicoDisk, a start-up that has since vanished.All these products, however, failed to find a market. Aura Associates, Maxtor and MiniStor were also working on thisform factor around 1992.As for the new Samsung product, its capacity (30GB or 40GB) and price ($199) can compete for now with flash drives,much more than one-inch units. LaCie has already chosen the model in its design for a tiny external drive, replacingprevious units that integrated one-inch HDDs, and for good prices compared to Samsung: USB Key Max at ee94.90for 30GB and ee124.90 euros for 40GB.

Manufacturer ModelMax. per

platterTotal

capacityHeight # of

disks/headsAccess

timeRotational

speedInterface Production

Retailprice

SAMSUNG A130GB40GB

30GB40GB 5mm 1/2 NA 3,600rpm

PATA,CE ATA,

USB1Q08 $199

New 1.8 hard disk drive

Only Hitachi GST, Samsung and Toshiba continue to manufacture 1.8-inch hard disk drives. For this form factor, thebiggest buyer is Apple for its high-end iPod. Toshiba has already announced a 160GB 1.8-inch drive but at 3,600rpmonly (SN 10/07), one of the first HDD using a 4K byte per sector. The new 120GB MK1214GAH, 60GB MK6028GAL and80GB MK8025GAL are aimed at tablet, mobile PC, ultra-portable, ultra-mobile PC, the last one weighing only 45grams. For CE products, the two 60GB MK6014GAL and MK6015GAA use 1KB-per-sector format optimized for CEapplications.


platterTotal

capacityHeight # of

disks/headsAccess

timeRotational


Retailprice

TOSHIBA

MK1214GAMK6028GALMK8025GALMK6014GALMK6015GAA

60GB60GB80GB60GB60GB

120GB60GB80GB60GB60GB

8mm5mm5mm5mm5mm

2/41/21/21/21/2

15ms

4,200rpm4,200rpm4,200rpm4,200rpm3,600rpm

ATA-7,LIF

connector12/07 -

New 2.5-inch hard disk drives

The company may have launched the first half-terabyte notebook drive in history, but its supremacy lasted only a fewdays (see below). Until now, the record for capacity in the 2.5-inch form factor was 320GB (already announced byFujisu, Toshiba and Western Digital).But note that in one important specification, the Travelstar 5K500 differs from the majority of the notebook drives: itsheight, at 12.3mm rather than 9.5mm. Why? The 5K500 contains three magnetic disk platters, the others ones onlytwo.In term of areal density, it's ultimately about the same: 167GB per disk for this model, 160GB per disk for 320GB9.5mm high units. PC maker ASUS has already decided to integrate these 500GB drives into its M50 and M70 notebooks, the last oneeven containing two drives for a 1TB capacity. Not bad for a laptop!The Travelstar 5K500 drives also feature optional data encryption but with 1.5Gbs SATA interface.There is also another version, the Travelstar E5K500 for 24x7 operation aimed at blade servers, network routers, POSterminals and video surveillance systems.


platterTotal

capacityHeight # of

disks/headsAccess

timeRotational


Retailprice

SAMSUNGSpinpoint

M6167GB 500GB 9.5mm 3/6 NA 5,400rpm SATA

3Gb/s 03/08 -


platterTotal

capacityHeight # of

disks/headsAccess

timeRotational


Retailprice

HITACHI GSTTravelstar

5K500134GB167GB

400GB500GB 12.5mm 3/6 12ms 5,400rpm SATA

3Gb/s 2Q08 -

Samsung has traditionally been a follower in hard disk drive technology. Yet for the past two years, the contrary hasbeen true in all categories of HDDs except enterprise units. At CES, the company has been in the habit of launchingincredible HDDs that prove it. Here the Korean company announced a new 2.5-inch unit with a record capacity of500GB in a smaller volume that the formerly announced Hitachi GST Travelstar 5K500. Up to now, all the 9.5mm note-book units could contain a maximum of only two platters and four heads. Samsung has really done a great job to putthree disks and six heads in that box.


Hard disk drivesIMATION: ULYSSES’ LAST VOYAGEThe idea behind Ulysses (SN 9/05)was to put a 2.5-inch hard diskdrive into an LTO cartridge andstack several such units in an auto-loader or a tape library, with thedisk cartridges read by a specialtape emulator developed by part-

ner Mountain Engineering or MPTapes. According to MaryRawlings-Taylor, Imation's directorof communications: “We are notcontinuing additional Ulysses deve-lopment.”In the sector of removable disks,Imation is nevertheless pursuingtwo parallel lines, which is some-

what unusual, since they competewith each other. Odyssey, anImation development that appa-rently integrates some Ulysses IP, isa dock that can hold a removable2.5-inch HDD, different from theRDX which it resells and is ofProStor Systems provenance,although the result is highly similar.

Flash drives were already offered asan option to replace magnetic harddisk drives for notebooks, forexample by Dell with Samsung'sunits. But nobody thought that theycould replace or even complemententerprise drives so rapidly. Withthe recent announcements fromEMC and STEC, the time hascome.EMC will offer the possibility tohave three tiers on its SymmetrixDMX-4 enterprise storage array:very fast (but expensive) flashdisks, enterprise HDDs rotating at15,000rpm, and low-cost, slowerbut high-capacity SATA drives.Of course, HDDs will continue toco-exist with flash, which cannotcompete in terms of per gigabytecost at higher capacities, but youcan now expect that flash disks willprogressively enter disk arrays andreplace hard disk drives as theprice of flash chips goes down fas-ter than HDDs. And for a good rea-son: with all their mechanical parts,magnetic disk drives cannot com-pete with flash for speed, especial-ly with access time of HDDs limitedto 7 to 10 milliseconds while flashare more in the hundreds of micro-seconds range. The rotation speedof Winchesters, the key for thetransfer rate of data, has stalled at15,000 rpm for many years now,and even increasing this speed willnot be that big a factor in enhan-cing the flow of data.A number of big users of main-frames are ready to pay a premiumto get a faster way to access theirdata for online transactions andthey will jump on flash memories,even if EMC said that the price for

these new flash disks will addaround 10% to the Symmetrix.There are two kinds of flash memo-ries: SLC (Single-Layer Cell) andMLC (Multi-Layer Cell). EMC chosefaster and more robust SLCs butthey are more expensive thanMLCs, which we will now find moreand more present in consumer pro-ducts (MP3 players, USB keys,etc).The choice of STEC by EMC is notsurprising. There are only threecompanies in the world capable ofdesigning FC controllers for flashdisks: BiTMICRO Networks (4GbFC up to 16TB), Texas Memory withits RAMSan-500, a 4U rack contai-ning one to two terabytes of flashmemory with a 4Gb FC hostcontroller with incredible speed(and pricing!), and lastly STEC.None of these firms are manufactu-ring flash chips (STEC usesSamsung's chips), but instead thecontrollers that manage them, ashard disk drives are also managedby controllers containing ASICs,processor and RAM.Who or what is STEC?Founded in 1990 as SimpleTechnology and based in SantaAna, CA, STEC entered flashcontrollers following the acquisitionof Cirrus Logic (then named Lexar)in 1994 and then SiliconTech in1998. After an IPO in 2000, thecompany changed its name toSimpleTech a year later. Othersacquisitions: SSD company Mem-tech in 2005 and Gnutek in 2006.Last year, Simpletech becameSTEC and sold its external diskdrive business to start-up Fabrik.One of the pioneer in flash disk

controllers with BitMICRO, M-Systems (acquired by SanDisk),SST and Targa Systems Division,STEC has designed flash disks withdifferent interfaces (IDE, SCSI andthen SATA, SAS and FC).For its last financial quarter endingin December, STEC expects reve-nues between $48 million and $51million, to be compared to $44.7million in 3Q07 and $43.7 million in2Q07. The firm is currently openinga brand new manufacturing plant inMalaysia.Reaction from EMC's competitorsWe are now waiting for a reactionfrom HP, HDS, IBM, NetApp andothers. They will have to follow, theonly question is when and withwhich flash subcontractors.Another company that will notappreciate EMC's latest choice isSeagate Technology, its largesthard disk drive supplier. Seagatehas already entered flash technolo-gy for notebooks with hybrid disksthat integrate both an HDD and aflash buffer simultaneously, butthese products have yet to showmuch sign of life. But this time, it'sa drive offered by its best customerwith flash memory only...If this doesn't spell the end of theHDD industry outright, flash hasalready eliminated the smallestform factor HDDs, it is entering por-table PCs and now even enterprisearrays. Today, HDD has only oneargument left up its sleeve: its priceper gigabyte for a minimum capaci-ty, around 20GB today, but moreand more tomorrow.Nevertheless, we will have to wait adecade to see a 1TB flash drive at

FlashEMC FIRST TO ENTER ENTERPRISE FLASH DRIVES WITH STECThis announcement could drastically change storage industry.

1 2

Flash

TANDBERG's HH LTO-4 FOR1Q08, QUANTUM NOWTandberg Storage has confirmedthat its half-height LTO-4 cartridgetape drive will be on the market in1Q2008 and its development isbased on the LTO-3.Furthermore, the company finallyhas some hope with respect to itsO-Mass activity. “A special part ofthe O-Mass technology has shownsome interesting potential in othermarkets than it originally wasdesigned for. The company be-lieves that there is a possibility thatone or more of these products canbe developed and brought to the

market during 2008.”For its 3Q07, the manufacturer ofHH LTO devices increased LTO-2shipments significantly but LTO3 isshipping at lower volumes thanexpected, even if the volumes havesteadily increased during the quar-ter. For this period, its operatingrevenue reached NOK 72.3 millioncompared to NOK 52.2 million in3Q06. Its gross margin, however, isstill unacceptable. This reducedmargin is a consequence of earlierlow production volumes in 1H07and increased demand in 3Q07above expected levels. “This requi-red additional short term compo-

nent purchases as well as produc-tion of modules with higher compo-nent cost to secure the volumes inthe channel,” comments TandbergStorage.Net loss before taxes was NOK 6.8million in 3Q07.

• Meanwhile, Quantum announcedthe availability of its own HH LTO-4device (800GB, 120MB/s) with AES256-bit native encryption andWORM cartridge support, at MSRPbeginning at $3,849. These techni-cal specs are the same as theStorageWorks Ultrium 1840 TapeDrive from Hewlett-Packard.

the price of a 1TB magnetic diskunit, currently at less than $300, notfar from what a flash unit with only16GB costs. It's worth noting thatEMC, STEC or any other flashmanufacturer for that matter alwaysseems reluctant to give the exactprice of their high-capacity units.Return to the sourceTo conclude, it's odd to see EMCcoming back to solid-state drives.It was founded by Richard Eganand Roger Marino in Newton, MA inAugust 1979.

Egan, a former Intel general mana-ger, was attracted by the opportu-nity to sell add-on memory to therapidly growing minicomputer mar-ketplace. EMC's first product was a64KB solid-state memory board, itsmost recent a 73/146GB solid-statedisk.Recall too that the company killedIBM mainframe disk arrays in theold days, with the emergence of itsfirst Symmetrix, not only becausethey used the smaller and cheaper5.25-inch form factor but also a

massive solid-state cache forexcellent performances. One stora-ge veteran told us that at the timeEMC was not primarily sellingdisks, but cache. The successfulperiod in the history of EMC hard-ware was based on one word: SSD.For its CLARiiON line the story isslightly different, however, since itdoesn't use more RAM than thecompetition - of course, this pro-duct was originally designed byData General (acquired in 1999),not EMC.

BiTMICRO Networks plans to laun-ch an 832GB version of its E-DiskAltima E2A3GM SATA flash drive,with MLC chips, in 2.5-inch formfactor, with sustained transfer rateof up to 100MB/s and up to 20,000I/Os. Sampling is expected to beginin 2Q08 and shipping in volume by3Q08 in capacities ranging from32GB to 832GB.BiTMICRO is really a technologyleader in flash disk and a pioneer inthis field with already around 37models announced since 1999.The firm claims to be the first tomarket the following flash drives:- 2.5-inch EIDE (up to 4GB) in 2000,- 3.5-inch Ultra Wide SCSI LVD(48GB) in 2000- 2.5-inch Ultra SCSI (up to 4GB) in2000- 3.5-inch Differential SCSI (19GB)- 2.5-inch ATA/UDMA-66 IDE (up to17GB) in 2002- Ultra320 SCSI (up to 155GB) in

2004 Its flagship product, the E-DiskSSD, is offered with SATA, SCSINarrow and Wide, IDE/ATA and FCinterfaces in 2.5-inch and 3.5-inchhard disk drive footprints, and 19-inch rack mount configurationsscalable up to several terabytes ofpure solid state storage.BiTMICRO launched last year ahigh-end 1.6GB SSD device, twicethe capacity compared with thenew Altima E2A3GM flash SSD, butin a 3.5-inch form factor and with4Gb FC interface and an impressi-ve 55,000 I/Os per second.The others capacity leaders in thismarket are STEC (512MB in 1.8-,2.5- and 3.5-inch), Fusion-io(640GB of flash memory in a PCIcard). Texas Memory reaches 2GB,but in a big 4U rack.Biggest companies like SanDisk orSamsung (up to 64GB), andToshiba (up to 128GB) are far

behind. But today, only the flashdisks of a maximum capacity of128GB are effectively competing interm of price with 2.5-inch harddisk drives for the current biggestmarket for flash disks: notebookPCs. BiTMICRO didn't give anyprice for its new 832GB unit, proba-bly to avoid the comparison with ahard disk drive of a comparablecapacity.

• Flash is invading everywhere,even blades now. SiliconSystemshas launched one of the first SSDdrive for embedded storage appli-cations, the USB Blade, at capaci-ties of 512MB, 1GB and 2GB.For its BladeCenter, IBM has alsointroduced a solid state drive, anew option available as a single2.5-inch 2-watt 31.4 GB drive. SATA compliance enables the driveto connect directly into Blade-Center.

A RECORD 832GB 2.5-INCH FLASH DRIVE FROM BITMICRO FOR 3Q08

Tapes


People• Pat Clarke, 42, has been promo-ted CEO of Tandberg Data in orderto attempt to get the companyback on the rails, financially speak-ing. “A broad but effective SteeringGroup will be set up to identify andmonitor plans and actions. I'meager to start getting the companyback to black," said Clarke whowas formerly executive VP andreplaces Kristian Jacobsen. The new CEO has seen a widerange of companies during his 15-year career in the storage industry:Pillar Data, BakBone, Overland,IBM and Quantum, after servingsome years in the British Armedforces.

• Takayuki Nishioka is taking theposition of CEO at Buffalo Tech-nology USA, remaining on theboard of Buffalo Japan, which he'sheld since 2001. Prior to beingnamed CEO, Nishioka led the enti-re Buffalo Japan sales team, afterjoining the company twelve yearsearlier as sales manager.

• RELDATA promoted DaveHubbard as the new president andCEO, following on his role as COOsince February 2007. He replacesBoris Anderer. Hubbard's 25-yearcareer includes senior executiveroles at QLogic, Inrange/Com-puterm, Computer Network Tech-nology, and DEC.Additionally, the company appoin-ted storage veteran Jeff Helthall asVP of sales, and added BruceRudin as VP finance/controller.

• Symantec has a new COO,Enrique Salem, reporting to chair-man and CEO John Thompson,while Gregory Hughes has beennamed chief strategic officer. Salemmost recently served as group pre-sident for WW sales and marketingand Hughes as group president ofglobal services.Tom Kendra will remain group pre-sident of the security and com-pliance group (previously referredto as the security and data mana-gement group). Greg Butterfieldwill also continue in his interim roleas group president for the storageand server management group(previously data center manage-

ment group) and as group presi-dent of the Altiris business unit.Janice Chaffin remains grouppresident of the consumer businessunit.

• From several U.S. sources, itappears that Tony Asaro has beenrecruited by Dell as director of pro-duct marketing and iSCSI evange-list. He is a well-known senior analystfrom Steve Duplessie's EnterpriseStrategy Group, where not surpri-singly, he is no longer listed as ananalyst. Asaro is an ardent suppor-ter of iSCSI, and was running theESG lab. “All of the major storagevendors will step up their invest-ments in iSCSI,” he wrote in hisblog. And, as most already know,Dell has just acquired iSCSI specia-list EqualLogic. Asaro was a co-founder of I/OIntegrity developing a high-perfor-mance storage controller as a sys-tem on a chip.

• nCipher appointed Ira Zalesin,52, as executive director, chief mar-keting officer and COO NorthAmerica, along with Aidan Hegartyas VP of operations of the newlyacquired Neoscale storage securityproduct lines. Richard Moulds waspromoted from VP marketing toexecutive VP product strategy.

• Formerly VP for channel sales atSeagate's Evault, Dave Ferrettihas been recruited as senior VP ofWW sales at StoredIQ. Many yearsago he worked for ArrayTechnology, acquired by EMC in1994.

• Coming From Evault, DaveLoewith is the new VP engineeringfor PowerFile. He formerly servedas VP of information protection atLegato Systems and was a key fac-tor in the latter's acquisition byEMC, after a stint as director of sto-rage solutions at Amdahl. Meanwhile, Keith Son has beennamed senior director of hardwareengineering. He comes toPowerFile from Marvell where hewas director of the storage control-ler business unit after being systemarchitect for NetApp.

• Formerly at Dot Hill, industryveteran Jim Wayda has beenappointed as VP software enginee-ring for iStor. He currently has twel-ve patents pending in the areas ofsnapshot and data replication.

• Secured Digital Storage hiredJeff Pfeiffer as director of productmanagement. He most recentlymanaged the Verizon channel part-nership for storage services provi-der Arsenal Digital Solutions.

• We just learned that DennisConner, who was previously areporter for IDG's Network World,last year launched SSG-NOW, anAustin, TX-based company thatprovides a selection of briefs andwhite papers on storage compa-nies and their technologies.

• EMC has named KristianThyregod as distribution directorfor EMEA. Before coming to thecompany, he was executive VP forsales and marketing at FoursLeaf/LOGIX.Arnaud Allouche, 36, was promo-ted director of global services atEMC France. He joined the compa-ny in June 2004, and previouslyheld the position of regional mana-ger of customer service for theSouthern Europe region.

• Hitachi GST has promotedKarthik Laxman as country mana-ger of India and the SAARC region.

• Patrick Cowden is the new GMof HDS Germany, reporting toEMEA senior VP and GM MichaelVäth. He succeeds Richard Evans,who will take a management posi-tion at the international level.Cowden hails from Dell Germany,where he worked from 2003 to2007 after experience with EMC asarea sales manager.

• After stints at Addit and Storage-Tek, Andreas Fink has switchedfrom channel account manager forNorthern Europe at HDS to channeladvisor at Overland Storage inGermany.

• Iron Mountain has named FredPirat, 43, regional channel mana-


ger for Southern Europe. In 2001,Pirat joined Connected, which wasacquired by Iron Mountain in 2004.

• Siegfried Betke is the newDirector Central Europe ofDatacore Software, where he'sworked since 2000, along side IrisHatzenbichler, now promotedmarketing and operations managerfor EMEA.

• ONStor has recruited Kin Lai asGM of Greater China and Singa-pore, reporting to Tom Gallivan,senior VP of global sales. The firmwill open an office in Beijing toexpand on their current operationsin Japan.

• German VAD Digital NetworkServices has asked Ronald Kufferto take charge of resale ofNetApp's VTLs.

• Who can forget Tom Mitchell, thecontroversial companion of AlShugart and Finis Conner atSeagate Technology? He co-foun-ded Seagate in 1979 and served asits president from 1983 to 1991,

where he established manufactu-ring operations in Singapore,Thailand, Malaysia, the PRC andIndia. For the past seven years, heis the president, chairman and CEOof Fabrinet. In the company wealso find executives from HitachiGST, IBM, Magnecomp, Maxtor,Read-Rite and Seagate. Fabrinetbegan operations by acquiring a21,550 square-meter facility fromSeagate Technology in Bangkok,Thailand and is now mainly amanufacturer of optical communi-cations components and modules.The company just filed a registra-tion statement with the SEC for a$250 million IPO.

• David Cuyler has been named tothe new position of director ofmembership development forContent Delivery and StorageAssociation.

• Formerly CEO of RAIDCore, TomMarmen has been elected to theboard of Ciprico. Most recently, hewas president and CEO ofTimeLab, maker of a performance-enhancing technology for PC chips.

From 2001 to of 2004, Marmen wasCEO of RAIDCore, sold toBroadcom and served through Aprilof 2006 as VP and GM ofBroadcom's storage line of busi-ness purchased by Ciprico in June2006. Prior to joining RAIDCore, heserved as senior VP and GM of thehigh-end storage division ofQuantum and VP of the enterprisesolutions group at Adaptec, wherehe was responsible for that compa-ny's RAID business.

• EMC has added Akamai's presi-dent and CEO Paul Sagan, 48, toits board. He will also serve as amember of the firm's mergers andacquisitions committee.

• Mike Ruettgers, 64, previouslyCEO and then executive chairmanof EMC, has been appointed chair-man of British chip-maker WolfsonMicroelectronics.

• Brocade former CEO Greg Re-yes has been sentenced to 21months in jail and a $15 million finefor backdating stock options, butremains free pending appeal.

People

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Although hardly news (it dates backto July 2007), the story went largelyunnoticed when it should have stir-red great interest. IBM is venturinginto grid storage by OEMing a stor-age grid software published by asmall Canadian company, ByCast,whose product StorageGRID isnamed IBM Storage Grid AccessManager Software to provide thebasis of its DR550, a competitor ofHP's Integrated Archive Platform(formerly RISS) and EMC's Centera.Since 2005, the two companieshave been jointly delivering the IBM

Grid Archive Solution although theOEM agreement will enable mul-tiple vertical applications.StorageGRID delivers a virtualiza-tion and data protection layer thatcreates unified fixed-content stora-ge across hundred of sites andheterogeneous storage hardwarethat can scale to petabytes. A node can be added at any timeand the grid automatically reconfi-gures itself to incorporate the newnode. It also enables the storing ofobjects on tape and optical media.

• Established in 2001 in Marseilles,France, Dmailer, a provider of por-table back up and synchronizationsoftware for a range of mobiledevices, has received Ûe2.5 millionin new funding from VC firms BNP

Paribas Private Equity and AltoInvest. Since its launch in May2004, its flagship Dmailer V7 pro-duct has sold over 20 millionlicenses in 120 countries worldwi-de, according to the start-up.

• New York City-based Drop.io, aWeb site that allows people to pri-vately store and share online pic-tures, video, audio, docs, etc hasannounced a $1.2 million Series Afinancial round.

OEM/Distribution MiscellaneousIBM VENTURING INTO STORAGE GRID FOR CAS WITH BYCAST

Start-ups

IBM has shipped its 10,000th stor-age virtualization engine, the SANVolume Controller or SVC, in morethan 3,400 installations. The milestone sale went to AbleBody Labor, a mid-sized businessin Florida. SVC is now in version4.2.1, with enhanced FlashCopyand improved supported storagecapacity going from 2PB to 8PB. It also now supports new operatingenvironments with VMware ESXServer, Red Hat and SUSE Linux,and Novell Netware.

IBM SHIPPED ITS10,000th SVC CONTROLLER


Boardroom notes

The truth is that HDD manufacturerHitachi GST was approached bybuyers such as Silver Lake Partnersand others, given that it has beenlosing money since its acquisitionof IBM's disk business for morethan $2 billion in 2002.Hitachi GST, Fujitsu and Toshibatogether would represent an enor-mous shift in the hard disk drivelandscape, with only five HDDmanufacturers remaining on themarket if we add tiny Iomega/Excelstor, Samsung, Seagate andWestern Digital. We have counted 192 HDD makersthat dabbled in the sector since theorigin of the industry in 1956 byIBM. Now only 5 remain! And onlytwo of these are actively engagedin manufacturing enterprise units -Seagate and the new Japaneseconglomerate.Based on the best figures in theindustry, provided by TrendFOCUSfor 3Q07, the new venture will benot far off from Seagate in terms ofunits shipped:- Seagate 35.3%- Hitachi GST + Fujitsu + Toshiba

33.4%

- WD 22.0%- Samsung 8.9%- Iomega/Excelstor 0.5%Any deal will be complicated.Combining two companies is notan easy job, but three? And whichcompany will head the merger? Thebiggest one, HGST, even if it'sunprofitable? Will there be paritybetween Fujitsu and Toshiba, whichproduce roughly the same numberof drives? And what about therestructuring? Which manufactu-ring plants stay and which go? Howwill they combine R&D teams inJapan and in California, not to men-tion sales and marketing forcesspread throughout the world? It willnot be easy to find a new name forthe entity: HGST-Fujisu-ToshibaHard Disk Drive Co.? It doesn'texactly trip off the tongue. Why notsimply JapanDisk, since it willencompass all three remainingJapanese HDD makers in the mar-ket.Historically, large Japanese compa-nies don't like to shake hands. Andthese three compete in a slew ofother product arenas, not just in IT.And there's no shortage of

examples in (optical) storage also:NEC and Sony with Optiarc, Hitachiand LG with Hitachi-LG DataStorage, and also Toshiba andSamsung with Toshiba-SamsungStorage Technology Corp..How will this affect the historicaland continuing war on prices?Probably not very much. In such acompetitive industry, even if therewere only two HDD makers leftstanding, the boxing scheme wouldstill not change much.It's hard to believe that leaderSeagate and successful WD will nottry to do their best to avoid thisincredible consolidation, which willchange the face of the worldwidedisk drive manufacturing industryentirely. And don't wait for anystart-up to add players in this field.Cornice and GS Magicstor, the lasttwo to try entering the HDD sectorhave both collapsed. For two rea-sons: 1) this activity needs a hugeinvestment; 2) all the patents youneed to design your first unit arealready owned by the current fieldof manufacturers, and the price tolicense them would be as high asthe Eiffel Tower.

HITACHI, FUJITSU AND TOSHIBA TOGETHER FOR A NEW JAPANESE CONGLOMERATE IN HARD DISK DRIVES?This rumor is circulating across the Web, but awaits confirmation. We'll wait and see. We've outlined thepotential consequences of such a deal.

• When Seagate Technologyacquired Maxtor, its CEO SteveLuczo confirmed that “We aren'tgoing to lay off any Seagateemployees.” However, with the closing of one ofits two Northern Ireland manufactu-ring facilities, the HDD maker willnow cut back around 900 of its ownworkers and temporary employees.The 10-year old plant in Limavady,County Londonderry, was manu-facturing aluminum disk substrates,a component of hard disk drives.The activity is no longer profitablefor the company, and it plans to

open a new substrate facility inMalaysia this year. A second Seagate plant operatingat nearby Springton will be unaffec-ted. The latter facility produces thin filmwafers for disk heads and employs1,400. It is also, to our knowledge,the last manufacturing plant inEurope to underake the assemblyof HDD components.Seagate was considered the largestprivate-sector employer in NorthernIreland.

• Ciprico has applied to transfer its

NASDAQ listing from The GlobalMarket to The Capital Marketbecause the company fails to com-ply with the minimum $10 millionstockholders' equity requirementfor continued listing on the GlobalMarket.

• Mountains West Exploration,Inc. d/b/a Secured Digital Storagehas filed an amendment to itsarticles to change the company'sname to Secured Digital StorageCorporation, following the acquisi-tion of the latter company lastNovember, 2007.

STORAGENEWSLETTER© is published monthly by Micro-Journal SARL de presse, 11 rue de Provence, 75009 Paris, France. Phone: +33 (0)1 42 46 30 56. Fax: +33 (0)1 48 24 22 76.

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All rights reserved. Reproduction of any or all information contained herein without prior permission is forbidden. Printed in Paris by Promoprint, Paris, France. Dépôt légal: 1Q2008. CP No. 1111 I 88595. ISSN 0988-3452.

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Demand for storage capacity conti-nues to grow at a rate of nearly60% per year and IDC believes thatduring 2008 the industry will seesignificant shifts in the way data isstored, managed, and protectedaccording to its report WorldwideStorage 2008 Top 10 Predictions:New Paradigms. The overarchingtheme of storage efficiency willintensify throughout 2008 andincrease the industry's focus on vir-tualization strategies and green ini-tiatives as well as informationconsolidation techniques like de-duplication. “In the past severalyears, storage trends have tendedto be tactical and focused on deve-lopments in specific technologies,”said Benjamin S. Woo, VP of enter-prise storage systems at IDC.“2008 is likely to represent aninflection point in the way applica-tions and storage will be interfa-

ced.” Among IDC's key predictionsfor 2008 are the following:1) Online storage services (storage-as-a-service) such as online bac-kup, archiving, and replication willbe accepted as a viable option.2) New role-based storage systemswill enable vendors to target speci-fic storage and data managementissues, but will require tighter inte-gration between the content-gene-rating application and storage layer.3) SSDs will become more viablefor mainstream storage solutions asa result of declining price points.4) Virtual servers (e.g., VMware) willemerge as the killer application foriSCSI.5) Vendors will create more attracti-ve ‘all in one’ solutions using anintegrated server and storageapproach to address the lucrativeSMB market.6) Value-added storage services

will begin to be divorced from stor-age subsystems, resulting in furthercommoditization of storage sub-systems.7) A growing number of enterpriseswill adopt full-disk encryptionwithin the datacenter to adhere tosafe harbor provisions of manycompliance regulations.8) Vendors will create more attracti-ve ‘all in one’ solutions using anintegrated server and storageapproach to address the lucrativeSMB market.9) Partial hardware refreshes thatrequire nondisruptive expan-sions/replacements will be deman-ded by customers to up the ante on‘green’ initiatives10) De-duplication, single instan-cing, VTL, and thin provision willbecome standard options on stor-age systems to enable customersto become more ‘green.’

TOP TEN STORAGE PREDICTIONS OF IDC FOR 2008

Market reports

The buoyant Czech disk storagemarket is expected to reach10,000TB of installed capacity in2007. According to a study fromIDC, Czech Republic Storage 2007-2011 Forecast and 2006 VendorShares, the growing importance of

data management as a source ofbusiness value, digitization of allforms of media, and EU regulationson data retention are fuelingdemand for enterprise storage sys-tems. In 2006, the Czech disk sto-rage market grew more than 17%

year on year to exceed $114 mil-lion, with capacity increasing byalmost 29% to nearly 8,000TB,while shipments rose 1.8% to morethan 14,300 units. In 2007, thecountry’s market will pass $139million in value.

HOT CZECH DISK STORAGE MARKET TO HIT 10PB IN 2007

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