StoneFly Joins Dynamic Network Factory

IP storage pioneer StoneFly Networks is being acquired by network attached storage (NAS) firm Dynamic Network Factory.

Six-year-old StoneFly was a pioneer in iSCSI technology, and even boasted the domain name But as the market for IP SANs heated up, StoneFly lost ground to competitors such as EqualLogic, LeftHand Networks and Intransa.

StoneFly will continue to maintain its San Diego headquarters, operating as a wholly owned subsidiary of DNF to expand its line of iSCSI storage solutions into integrated and modular configurations, DNF said. IDC expects the iSCSI storage systems market to grow from $119 million in 2004 to $4.7 billion by 2009.

DNF CEO Mo Tahmasebi said the acquisition was finalized following an expansion of DNF’s initial investment in StoneFly last year.

“StoneFly has earned a competitive advantage by reaping the benefits of $34 million in funding to fuel more than five years of ongoing product development, resulting in the most reliable, field-tested IP SAN solutions available in the world market,” Tahmasebi said in a statement. “Our goal with this acquisition is to make the company stronger than ever by building upon its proven IP SAN expertise, while expanding its OEM and reseller channels in the U.S. and abroad where demand is high for reliable, scalable and affordable iSCSI storage.”

Tahmasebi will serve as CEO of both StoneFly and DNF, while Dennis Hergert, a four-year StoneFly executive, has been named director of operations, responsible for overseeing all product development, systems testing, integration and support at StoneFly’s San Diego headquarters.

“Not only is StoneFly organizing for expansion outside of North America for the first time, but we’re also bolstering our operations to ensure a superior commitment to both new and existing customers,” said Hergert.

The company will expand its turnkey iSCSI product line beyond entry-level and mid-range solutions to include larger scale SANs of up to 100 TB, the companies said.

Hayward, Calif.-based Dynamic Network Factory started in 1989 as a U.S. subsidiary of the Japanese IT conglomerate CSK Electronics, and became an independent, privately-held spin-off a decade later. The company boasts more than 20,000 customers.

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