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StorageTek Salvages Storability

Storage Technology Corp. (StorageTek) (NYSE: STK) picked up Storability Software Inc., makers of a software resource management (SRM) product, on the cheap and probably saved the startup from having to close its doors (see StorageTek Buys Storability).

The sale was a case of history repeating itself. StorageTek bought the assets of Storabilitys storage service provider (SSP) business in July 2002 when Storability morphed into an SRM vendor (see StorageTek Buys Storability Assets). Now StorageTek has Storability’s SRM assets as well.

StorageTek did not disclose the financial terms, but an industry source says the latest deal probably cost StorageTek less than $20 million. The sale -- announced late Thursday -- came a day after another SRM startup, CreekPath Systems Inc., closed a $22 million funding round (see CreekPath Reels In $22M). Storability picked up a mere $7 million in its last funding round a year ago, and said at the time that would take it to breakeven this year (see Storability Snags $7M).

That apparently never happened. Storability had only 40 customers -- 30 through an OEM deal with StorageTek -- and annual revenue of under $10 million. Its sales lagged behind other private SRM companies such as CreekPath, Softek Storage Solutions Inc., and AppIQ Inc. (see Softek Reports Revenue Growth and AppIQ Makes Record for Revenue). Storability’s headcount was 70, down from 250 when it was an SSP.

StorageTek director of corporate strategy Todd Rief says all Storability employees have been offered positions, and the group will remain at its Southborough, Mass., office. Rief says the Storability team would make a good fit in the StorageTek ILM Solutions group, but it will continue to concentrate specifically on developing and selling its Global Storage Manager (GSM) software. Storability released GSM 4 earlier this month.

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