Storage Computer Turnaround Stalled

Storage Computer Inc. (Nasdaq: SOS) received a $5 million shot in the arm from an old investor this week, providing some temporary relief from nagging financial woes. But it will take more than this modest sum for the decade-old company to complete its much talked about turnaround (see SOS Distress Call Answered).

The Nashua, New Hampshire-based firm has reported an 87 percent drop in second-quarter profits compared to last year's quarter. Its revenues for the quarter ended June 30, 2001, were down 53.8 percent sequentially and 53.7 percent year over year to $950,913 (see SOS in Distress).

The losses are in part due to a backlog of unfilled orders -- worth in excess of $1.6 million. The majority of those orders ($1.35 million-worth) come from a contract with Crimson Media, the company said (see Storage Computer Turns Crimson). Peter Hood, Storage Computers CFO told Byte and Switch this backlog is due to a delay in Storage
Computer shipping new products that were expected in August, but are now unlikely to hit the streets before the end of year.

The new CyberBorg and CyberNAS boxes have been held up because of “complex technical challenges and supplier delays,” says Hood. The company was unable to give specific details but says optical network interface integration into NAS and SAN systems is not a straightforward challenge.

“We can’t talk about a number of these issues, as the features have not been announced yet,” says Todd Viegut, VP of marketing at Storage Computer. The integration of RAID and NAS management into one common interface is one feature the company says is a “market differentiator” as it reduces integration and systems management burdens, but it is also difficult to do.