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Can a bit player in the high-end storage subsystems market make it to the big time in storage-area networking? That's the role Ciprico Inc. (Nasdaq: CPCI) is eyeing as it expands its product repertoire.

But it may take some time for the company's story to unfold, given both the technological and market hurdles it faces as it moves from the world of providing disk arrays and hardware RAID bundles (for high-end applications like streaming video) to the more complex fields of storage-area networking software and network-attached storage products.

Combined with the current down market for overall IT purchasing, it's no surprise that Ciprico's stock (currently trading at about $7 per share) is still rated as a Hold by analysts covering the firm. The most recent report on Ciprico from Needham & Co. notes some positives, such as advanced products in the development process. But until those products gain traction a time expected not to be sooner than the middle of next year – Needham says it will retain its Hold rating.

Still, since Ciprico's current market cap is almost equal to the cash it has on hand (about $33 million), there's not much potential downside for new investors. Robert Kill, Ciprico's CEO, says the Minneapolis-based company expects to be "cash-negative" for the remainder of its fiscal 2001, as it invests heavily in R&D to beef up its SAN and NAS capabilities.

Ciprico's current revenues are generated by products like the NETarray 1000, a Fibre Channel disk array that the company claims can support up to 15,000 I/Os per second, with sustained data transfer rates up to 200 Mbytes per second. The NETarray 1000, Ciprico says, can support four to 10 drives per enclosure, and up to 100 drives in a standard telecom rack.

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