Terminator Pumps Sanrad

But company's decision to expand to California not Arnold's doing

May 7, 2004

3 Min Read
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Governor Ah-nold visited tech firms in Israel earlier this week to try and lure them to California, and trumpeted Tel Aviv-based Sanrads plan to add 300 jobs in the Bay Area over the next five years.

Well, those plans were prompted more by iSCSI than Schwarzenegger. Sanrad executives say California's the place to be for a company selling IP SAN appliances in an economy that's looking up -- at least a bit, anyway.

“We had already planned to expand out here in Alameda,” says Zophar Sante, Sanrad’s VP of marketing development. “It wasn’t so much Arnold. It was mainly because the economy’s coming back and the iSCSI market is becoming aggressive. And there’s a lot of Tier 1 OEMs in California, so this is where we want to be.”

Sanrad won't receive financial incentive from the state to expand, so the iSCSI market will have to flourish to support the company's planned growth. Sanrad currently has 60 employees, with three-quarters of them in Tel Aviv, about 10 in Alameda, and five others across the U.S. Sante says the development team will stay in Israel but Sanrad will add sales, marketing, and support in California.

“We hope to be exiting 2005 as a $50 million company and keep climbing,” he says. “You have to have a sizeable infrastructure to support that kind of revenue.”Indeed. Sante says Sanrad has about 100 customers and around 200 units shipping. Sanrad's products are two V-Switch boxes that use iSCSI to link storage devices and servers. He says most of the sales have come since December. The two-port V-Switch 2000 that rolled out in January is running neck and neck with the four-port V-Switch 3000 that started shipping last September (see Sanrad Aims Small and Sanrad Offers iSCSI Switch).

The smaller switch has a list price of about $11,000 compared to $20,000 for the four-port. Sante says the two-port box’s typical customer is an SMB. “We’re not replacing Fibre Channel. We’re winning customers who are creating new SANs,” says Sante, who we hope is better at marketing than he is at counting.

Sante says about 70 percent of Sanrad’s sales have come through a partnership with Nexsan Technologies Inc. Customers use the V-Switch to convert Nexxan’s ATAboy and ATAbay ATA arrays into IP SANs (see Unknown Document 52387 and ATA Is Where It's AT).

While Sanrad's move west is an uplifting vote of confidence in the market and the location, its dream path to $50 million in revenues is cluttered with iSCSI startups and established switch vendors. The company's low-end box competes with the likes of EqualLogic Inc., Intransa Inc., LeftHand Networks Inc., and StoneFly Networks Inc. The higher end bumps heads with Brocade Communications Systems Inc. (Nasdaq: BRCD), Cisco Systems Inc. (Nasdaq: CSCO), and McData Corp. (Nasdaq: MCDTA).

Sanrad, founded in April 2000, has received $7 million in funding from the RAD Group -- an Israel incubator -- and $5 million from the Israeli government (see Sanrad Comes to America).— Dave Raffo, Senior Editor, Byte and Switch

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