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Exabyte Excited About LTO-2

Exabyte Corp. (Nasdaq: EXBT) has entered a key tape-backup market late, but at least one analyst thinks its tardiness won't mess with success.

Exabyte yesterday announced the Magnum 1x7 LTO Autoloader, a small, rackmountable automated tape-backup system based on LTO-2 technology (see Exabyte Offers LTO Tape Autoloader). Exabyte claims the new gear is cheaper than competing products, and it touts its previously released automation features, which have reappeared in this box (see Exabyte Expands LTO Automation).

Don't glaze over: LTO-2 is said to be the leading technology for drives and cartridges used in enterprise tape libraries, outstripping competing techniques like Super DLT (SDLT) and the AIT format from Sony Corp. (NYSE: SNE). If Exabyte can stake its claim to a piece of this market, it could make a difference in the company's ailing financials (see Exabyte Loses Money).

"While they're a bit late to the party, they have a very good price point... and the product leverages their own automation technology," says Bob Abraham, principal at market research firm Freeman Reports. "LTO-2 is at its peak right now. While Exabyte missed the front end of the curve, it's still got a long way to go."

Freeman estimates that LTO-2 products will account for more than 40 percent of the $2 billion spent worldwide on so-called compact tape drives this year. In contrast, DLT and SDLT drives will be 27 percent, and AIT drives less than 1 percent. And the firm predicts LTO will be at least 40 percent of the market through 2009.

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