DATA CENTERS

  • 09/07/2001
    3:30 AM
  • Network Computing
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Qualstar Seeks SAN-Friendly Future

Tape library vendor plans additional networking features as it chases enterprise customers
Hewing to the new reality in the automated tape-library business,Qualstar Corp. (Nasdaq: QBAK) is now seeking to add networking smarts to its product repertoire, to better compete in the large-enterprise, storage-area networking market.

Though the company is profitable, has $27 million in cash on hand, and no debt, it trails some of its competitors in the market-wide scramble to add SAN capabilities to the previously generic tape libraries (see ADIC). Perhaps that's why Wall Street analysts covering the company are cautiously optimistic about Qualstar's potential, and waiting to see product results before heartily recommending the stock.

"I think they're a little bit behind what the other guys are doing," says Brion Tanous, senior research analyst with Wells Fargo Van Kasper, explaining in part his Market Perform rating on Qualstar. Though two other Wall Street firms covering Qualstar still rate the stock a Buy, investors have sent the share price into a recent tumble to below $5 per share, after several months of hovering in the $7 per-share range.

Speaking at a Wells Fargo Van Kasper conference in San Francisco this week, Qualstar CEO William Gervais says his company will take a big step forward in the SAN-ready direction when it introduces its first rack-mountable tape library unit, a product the company plans to demonstrate at the Comdex show in November.

While its current line of tape libraries -- which support a wide mix of tape formats -- have earned the company a profitable niche in the small- to mid-range server market, Qualstar is a chubby-chaser -- looking to build bigger libraries for larger enterprises, where Gervais says the profit margins are better.


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