Quantum Buys NAS Startup

Quantum Corp. (NYSE:
DSS) stepped up its efforts in the NAS market today, announcing its
intention to acquire Connex
Inc., a subsidiary of Western Digital Corp,
(Nasdaq: WDC), for $11 million in cash (see Quantum Acquires Connex).

Under the terms of the agreement, Quantum gets Connexs NAS product line,
23 employees (the majority of whom are engineers), and other intellectual
property assets -- including several patents. The employees will join
Quantum’s Snap Appliances NAS unit, based in San Jose, Calif.

Traditionally, Quantum has been a provider of the nuts and bolts of
storage systems -- most of its revenue comes from selling DLT tape
components and table libraries. But more recently it has been making moves
into the NAS market.

Its ultra-low-end NAS box, the Snap Server, sells for $499; Quantum says
its sold more than 70,000 in less than two years. "We didn't expect this product line
to be such a big growth generator," says Sara Spivey, VP of marketing for
Quantum’s Snap business. This makes Quantum the largest supplier of NAS
devices, according to market data supplied by the company. Still, in terms
of revenue it’s a long way from the likes of EMC Corp. (NYSE: EMC) and Network Appliance Inc. (Nasdaq: NTAP),
which sell fewer units -- but charge upwards of $100,000 apiece.

That's where the Connex acquisition comes in. The startup has been
working on a high-end system aimed at the data center.

”We hope this acquisition will move us a step closer to Network Appliance
and EMC,” Spivey told Byte and Switch.