Maxtor exits networked storage business

Maxtor is leaving the networked storage business as increased competition from larger vendors hurt sales, the company announced Thursday.

Best known for its hard disk drives, Maxtor will no longer sell its MaxAttach network-attached storage (NAS) systems, according to a statement. Maxtor will wind down its business with current customers, supporting them through the end of their contracts.

Since it entered the NAS market in 1999, Milpitas, California-based Maxtor has seen larger hardware makers such as Dell Computer Corp. and Hewlett-Packard Co. come out with NAS products of their own. The heightened competition has caused a "commoditization" of NAS systems, which diminished the value of that market for Maxtor's systems, the company said.

Products such as the MaxAttach systems help manage the flow of files across Ethernet networks. The NAS systems are often used to store e-mail and files for Web sites.

Maxtor expects to take a charge in its third quarter of between US$75 million and $85 million for costs associated with its exit from the NAS business, it said in the statement.

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