Quantum is spinning off its network attached storage (NAS) unit as part of a restructuring plan that sees the company focusing on its core tape-backup equipment business, it announced Tuesday.
A new company, Snap Appliance Inc., will purchase Quantum's NAS assets for US$11.3 million, and take on about 40 Quantum NAS personnel, Marije Stijnen, a Quantum spokeswoman, said on Wednesday. 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 U.S. market. Quantum offered NAS products around the world, but Snap Appliance will only sell in North America.
"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. NAS products are systems that store data over IP networks.
Investors in Snap Appliance are Moore Capital Management, Mellon Ventures Inc. and Broadband Storage Inc., a privately-held Irvine, California, storage products vendor. Quantum will also hold a minority stake in Snap Appliance, Stijnen said.
Chief Executive Officer of Snap Appliance will be Eric Kelly, who previously held positions at Maxtor Corp., Dell Computer Corp. and IBM Corp.
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 in Framingham, Massachusetts.
"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 U.S., otherwise they would have taken the Maxtor route," she said.
Claus Egge, program director 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 Milpitas, California, hard disk drive vendor could no longer compete in a market that also attracted large vendors including Hewlett-Packard Co. 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 Milpitas, California, company in August appointed former Microsoft Corp. executive Rick Belluzzo as its chief executive officer to help turn the company around, and in September announced it would lay off 1,100 workers, nearly a third of its workforce.