StorageTek Taps Permabit's CAS Act

Storage Technology Corp. (StorageTek) (NYSE: STK) has officially announced it will OEM Permeon Compliance Vault from startup Permabit Inc.

for email archiving (see StorageTek & Permabit Mingling). StorageTek will rebrand Permabits product as Lifecycle Fixed Content Manager 100.

The move is the latest volley in the market for content-addressed storage systems (CAS) -- products for fixed-content documents such as email, receipts, and records that do not change after they are stored. The market for CAS has been gaining momentum as companies look to comply with new archiving regulations.

Permabit has positioned itself as a lower-cost alternative to Centera from EMC Corp. (NYSE: EMC), arguably the CAS market pioneer. EMC claims more than 1,000 customers and 30 Pbytes shipped for Centera systems.

Permabit uses standard CIFS and NFS file systems, claiming to make it easier to connect to other vendors' hardware than Centera (see Permabit Steps on the CAS). The product announced today scales from 2 Tbytes to 18 Tbytes and offers email archiving software from Permabit partners CommVault Systems Inc., iLumin, and IXOS Software AG (Nasdaq: XOSY). (See Permabit Pushes Pairings.)

While the initial target market for the system is email archiving for mid-sized companies or departments within enterprises, there's more to follow, says StorageTek ILM product manager Mark Lewis. “We’ll have a series of products through 2005, expanding into document management and moving into verticals such as health care.”List price begins at $75,000. Lewis says the product is generally available today, but StorageTek sold a few systems last month.

The StorageTek deal could prove a huge sales boost for Permabit, which claims customers in the double digits from direct sales of its CAS product. While StorageTek may be too late to unseat EMC in the enterprise, at least one analyst says SMBs remain a sizeable potential market (see StorageTek Defines Fixed Storage Roadmap).

“The big insurance and financial services companies have already purchased compliance solutions,” says analyst Dianne McAdam of Data Mobility Group. “Now the interest level is much higher for SMBs. They’re worried about litigation as well as regulation. They know they have to retain information.”

Permabit seems to be gearing up for bigger things. Sources say the startup is also closing in on a CEO to replace Randy Seidl, who left late last year to head Eastern regional sales at StorageTek. David Lee, a consultant who previously ran the technology practice at Arthur D. Little, has been serving as interim CEO.

Meanwhile, other players are also getting into the CAS act. Today, IBM Corp. (NYSE: IBM) announced a compliance service codenamed "Blue SOX," a Web-based repository for document and records management to help comply with Sarbanes-Oxley (SOX) regulations (see IBM Dons Blue SOX Compliance ).Last week, Sun Microsystems Inc. (Nasdaq: SUNW) announced a compliance product with the snappy title of Sun Compliance and Content Management Solution (see Sun, AXS-One Offer Compliance Appliance).

— Dave Raffo, Senior Editor, Byte and Switch