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StorageTek & Permabit Mingling: Page 2 of 3

The situation isn't surprising. Seidl and StorageTek VP of sales Mark Ward have a history. They were executives at EMC together and went on to found a managed network services company in 2000 called GiantLoop Network, now known as CentrePath Network Inc. (see GiantLoop Closes on $40 Million and Has GiantLoop Done a Loop?). Seidl left GiantLoop for Permabit a year ago (see Permabit Launches, Names CEO).

Now Seidl and Ward will take on EMC with Permabit’s Permeon Reference Vault and Permeon Compliance Vault products. Both are software products that run on standard hardware and use a proprietary object-based file system written in Java that's designed to store huge amounts of fixed content (see Permabit Steps on the CAS and Permabit Takes Another Bite).

The pairing of products makes sense. Permabit pitches its CAS systems as low-priced alternatives to EMC Centera and Network Appliance Inc.’s (Nasdaq: NTAP) LockVault. However, few gave Permabit a chance of competing with EMC or NetApp without an OEM deal. Now it has one.

StorageTek came to see the need for CAS when it began losing tape sales to Centera and other disk archive products (see Services Save StorageTek).

“One could argue that you would still need tape libraries for archiving, even if you use disk libraries for backup,” says analyst Kaushik Roy of Susquehanna Financial Group.

“But our checks are indicating that many customers are actually substituting disk libraries for tape libraries. The tape library vendors are in denial. But numbers don't lie: StorageTek’s revenue guidance for 2004 has been coming down over the last two or three quarters.”