Quantum snaps off NAS division

Quantum snaps off NAS division

Quantum is spinning off its network-attached storage (NAS) unit as part of a restructuring plan that will see the company focus on its core tape-backup equipment business and pulling out of the Australian NAS market.

A new company, Snap Appliance, will purchase Quantum's NAS assets for $US11.3 million, and take on about 40 Quantum NAS personnel, Marije Stijnen, a Quantum spokeswoman, said yesterday. Snap Appliance will be based in San Jose, California, and employ about 100 people, she said.

The spin-off will mean a retrenchment into the US market. Quantum offered NAS products around the world, but Snap Appliance will only sell in North America. NAS products are systems that store data over IP networks.

"Effective today, we no longer deliver NAS products to European and Asia-Pacific distributors," said Stijnen, who is based in England. "Snap at this time has no plans to offer its products outside North America."

Snap Appliance and Quantum will work together to support current international customers, said Stijnen. Some international distributors may sell Snap Appliance products outside North America, but those won't be supported locally, she said.

Investors in Snap Appliance are Moore Capital Management, Mellon Ventures and Broadband Storage, a privately held Californian storage products vendor. Quantum will also hold a minority stake in Snap Appliance, Stijnen said.

The CEO of Snap Appliance will be Eric Kelly, who previously held positions at Maxtor, Dell and IBM.

Quantum created Snap Appliance about two years ago with the intention of taking the company public. That plan was abandoned when dark clouds appeared over the stock market. The current spin-off plan should be completed by the end of October, Quantum said.

Quantum's decision to spin off the NAS business instead of shutting it -- which is what Maxtor recently did -- surprised Charlotte Rancourt, director of research for storage systems at IDC.

"It is intriguing that they chose to move forward and continue in this market. It suggests that they have had some success and that they think that they can make this a viable business in the US, otherwise they would have taken the Maxtor route," she said.

Claus Egge, program director of European storage at IDC in London, said he does not understand why Snap Appliance pulled out of Europe.

"I am surprised that they decided to withdraw from the European market. I do believe that they had a profitable business here," he said, adding that the pullout will probably upset users.

Maxtor in August discontinued its MaxAttach NAS product range. The hard disk drive vendor could no longer compete in a market that also attracted large vendors such as HP and Dell.

The spin-off is part of Quantum's plan to focus on its tape-based data backup business, cut costs and drive profitability. The company in August appointed former Microsoft executive Rick Belluzzo as its CEO to help turn the company around, and in September announced it would lay off 1,100 workers, nearly a third of its workforce.

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