Xiotech Opens Up
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Xiotech, the largest privately-held storage company, has abandoned its proprietary platforms in favor of industry-standard and open source technologies.
The company, a 9-year-old Seagate spin-off that generates about $100 million in annual revenues and boasts nearly 1,400 customers, announced its first product this week in a new direction: the Magnitude 3D 3000, which uses Intel Xeon chips and Linux.
The goal, said Xiotech marketing vice president Mike Stolz, is to refocus the company's resources on developing complete solutions in areas such as compliance and information lifecycle management (ILM) for its target small and medium-sized enterprise market.
"The reason we did this was to position ourselves to expand what we're doing," Stolz told Enterprise Storage Forum. "This provides us with the flexibility to go off and add applications without affecting the platform."
The company's change in direction came from new CEO Casey Powell, a co-founder of Sequent Computer Systems — acquired by IBM for $810 million — who most recently was CEO of Stonefly Networks. "He came on board to take us to the next stage in our evolution," Stolz said. "We want to take the company to the next level to provide more content into the SME space to solve some of the pressing management issues there."
The company apparently laid off a significant number of workers as part of the change in direction, reportedly as high as 25% of its workforce. Stolz declined to discuss the extent of the layoffs, and added that the company is "still hiring and expanding" to fill its new needs.
Tony Asaro, a senior analyst at the Enterprise Strategy Group's ESG Lab, said, "These are all smart moves. Fundamentally, the storage system works the same, and cache makes the performance better. As far as I know, the business is doing fine. I just think that this was a move to streamline and focus on the bottom line."
Given its size, an IPO is certainly within the company's research, and Stolz said that one of Powell's goals is to get it within reach of an IPO if the company decides to go in that direction.
"Xiotech's success is built on a tradition of technical innovation coupled with ease-of-use that's hard to beat," Powell said in a statement. "Our customers know that when we say we make storage management as easy as possible, we mean it. We will now build on that advantage by bringing an application layer to market that will also bear the Xiotech hallmark ease of use. Too many vendors now make the claim that storage is simple — by contrast we acknowledge that it is complex — but we mask the complexity from our users, leaving them free to do what they have to do to run their businesses."
The Magnitude 3D 3000 leverages commodity hardware and open standards to boost performance and scalability and provide the ability to adjust performance by individual application. The system eliminates planned downtime and allows IT generalists to update and adapt storage configurations in real time without specialized expertise. The system is also backwards-compatible with its predecessors.
The platform is based on Fibre Channel technology and SATA drives, and the company has also developed a lower-cost enterprise-class drive with Seagate, Stolz says. Xiotech also plans an iSCSI offering later this year.