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Quantum Snaps Off Its NAS Group

Written By: R. Krause
Published On: November 8 2000

Quantum Snaps Off Its NAS Group
R. Krause - November 8, 2000

Event Summary

Milpitas, Calif., October 24, 2000 [Source: Quantum] - Quantum Corporation's DLT and Storage Systems Group (DSS) announced plans to form two distinct companies from its current DSS businesses by making its server appliances subsidiary an independent, publicly-traded company called Snap Appliances, Inc. In a separate news release, Snap Appliances announced that it intends to file a registration statement with the Securities and Exchange Commission (SEC) for the initial public offering (IPO) of its common stock.

Quantum will conduct an initial public offering for less than 20 percent of Snap Appliance shares. Approximately six months following the IPO, Quantum intends to distribute the balance of the shares to Quantum DSS stockholders subject to receiving a favorable IRS ruling and board approval.

Quantum DSS will consist of two business groups: Enterprise Solutions and DLTtape. The Enterprise Solutions Group, building on the Quantum|ATL brand, will grow the company's current position in tape automation systems, into storage solutions supported by direct sales and service capability. The DLTtape Group will continue to expand its position in storage devices and media.

Market Impact

This is merely a split-off of the former Meridian, a company Quantum bought not too long ago. This splitting off is likely the result of Maxtor's acquisition of Quantum. Maxtor already has a Network-Attached Storage (NAS) group, which means someone's got to move. Outside of the effect on the company's employees, the short-term market impact will be minimal. (Yes, we know all too well that employee impact is often large.)

The smaller models of the Snap Server (the 1000 and 2000) are nice little units for small office/home office (SOHO) usage. However, we're not sure their big model, the four drive 4100, will be able to compete with the bigger NAS players such as Network Appliance, HP, and Dell.

For the longer term, we see this as a move which potentially benefits Quantum/Maxtor more than Snap Appliance, Inc. Without Quantum/Maxtor's deep pockets to support them, Snap Appliance may have a tougher time keeping pace with the rest of the NAS market. We would not be surprised to see Snap absorbed by someone else down the road, especially considering the projected market for NAS.

User Recommendations

In general, the users should see only modest impact. As mentioned earlier, we see the Snap Server 1000 and 2000 as good products for use in smaller situations such as the SOHO market. One of their key selling features is their ability to be up-and-running in five minutes or less.

We are not yet convinced by the 4100. The idea of four drives in a 1U-high (1.75") enclosure is enticing, and the addition of hot-swappability improves the 4100 over its predecessor (which had serviceability issues), but the lack of power supply redundancy means the unit is still not enterprise-ready. Performance is sufficient for smaller environments.

Smaller operations looking for quick, relatively inexpensive network-attached storage should include the 4100 on the list of products to investigate.

 
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