Storage Computer: Fighting Talk

Storage Computer Corp. (Nasdaq: SOS) hit a low point last year when its revenues sank to $6.5 million, down from a high of close to $40 million in the mid 90s. This year, however, the New Hampshire manufacturer of storage systems appears to be bouncing back.

Storage Computers efforts to extend its product portfolio to include NAS and SAN appliances as well as its original RAID systems are about to bear fruit, according to CEO Ted Goodlander. Goodlander says his company is “two or three weeks away” from signing its first major contract for storage products that came from its acquisition of CyberStorage Systems Corp. last year.

Goodlander believes the deal, with “a large national media corporation,” will prove that these products can catapult Storage Computer past heavyweight competitors like EMC Corp. (NYSE: EMC) and Network Appliance Inc. (Nasdaq: NTAP).

Goodlander takes particular aim at the recently announced partnership between EMC and Nortel Networks Corp. (NYSE/Toronto: NT). This envisions Nortel connecting EMC storage devices over optical links (see Nortel Lights Up Storage Networks).

Goodlander says that his company’s CyberBorg product, one of the products coming from CyberStorage, does the same job as the EMC and Nortel combo for a fraction of the price. That’s because it removes the routing layer currently required to connect a SAN to the wide area network, enabling the device to reside directly on an optical loop. The other product from CyberStorage, called CyberNAS, does the same thing.Storage Computer charges $170,000 for a fully configured CyberBorg, whereas EMC will charge over $2 million for its fully configured system, which includes Sun Microsystems Inc. (Nasdaq: SUNW) servers,

Cisco Systems Inc. (Nasdaq: CSCO) routers, and Nortel switches, according to Goodlander. “EMC has five boxes it has to put together to do this and we do it in one,” he says.

It’s fighting talk, but Goodlander gets positively passionate when discussing what appears to be a big preoccupation -- suing companies for infringing Storage Computer's patents.

"We hold several key patents on RAID technology and some of the first visualization patents,” says Goodlander. The company has been shipping virtualized storage since 1992, way before the buzz that’s being generated around these products today. Goodlander now seems determined to reap retribution on companies that haven't recognized this.

Storage Computer is starting with the big guys. It's targeting Hitachi Ltd. (NYSE: HIT; Paris: PHA) for allegedly infringing two patents issued in the U.K. One of them is called "Fault-tolerant, Error-correcting Storage System and Method for Storing Digital Information in Such a Storage System" and the other is called "High-Speed, High-Capacity, Error-Correcting Storage System for Binary Computers."

Storage Computer also alleges that certain Seagate Technology Inc. and Xiotech (now owned by Seagate) products infringe its U.S. patent entitled: "Apparatus and Method for Storing Data and Selectable Data Protection Using Mirroring and Selectable Parity Inhibition." Storage Computer holds patents for "SCSI disk arrays, parity-protected disk arrays and unique asynchronous storage architecture marketed as 'RAID 7’," according to company press releases.That, however, is just for starters. “From the richness of the claims being announced by startups, it’s hard to believe that any of these companies have created a product in this area and not infringed our patents,” says Goodlander, with relish.

Look out, DataCore Software,

FalconStor Software Inc., Zambeel Inc., and all the other new virtualization players out there: Storage Computer is on a mission. Goodlander says he expects to mount no less than 60 patent infringement suits over the next year or so. And he’s got some serious legal aid on his side, too, having signed up Sidley & Austin, the fifth largest law firm in the world.

— Jo Maitland, Senior Editor, Byte and Switch http://www.byteandswitch.com