ProStor

Fresh off its first OEM deal, removable disk startup ProStor Systems today picked up $12.2 million in funding. (See ProStor Completes Funding.)

ProStor first popped up last November when it revealed its RDX technology for removable-disk cartridges as a faster and cheaper alternative to tape backups for SMBs. Neither ProStor nor its competitors had any products out yet and details on the company's direction were sketchy back then.

"We were a little coy about our plans for bringing the product to market," CEO Steve Georgis admits.

Georgis is more willing to share info now that he has funding and an OEM deal with Tandberg Data. (See ProStor & Tandberg Agree.) ProStor's strategy is to pursue more OEM deals with its current drives for SMBs and eventually take the technology upstream to the enterprise.

Tandberg will sell ProStor's 2.5-inch RDX drives in 40-Gbyte, 80-Gybte, and 120-Gbyte capacities beginning in the third quarter of this year. ProStor licenses the technology to Tandberg, which manufactures and sells the drives. Georgis says ProStor will not sell any products directly."Our strategy is to bring additional partners onto the RDX bandwagon and have this become a multivendor de facto standard in the industry," Georgis explains.

That will be tough with two new competitors. Since ProStor first showed its face, Quantum rolled out its GoVault removable disk drive unit in March and picked up IBM as an OEM partner last week. (See IBM OEMs Quantum GoVault.) The other competitor is Imation with the Odyssey drive it revealed in May and expects to ship in September. (See Imation Unveils RHDD.)

Initially, ProStor will look to compete largely on price. Tandberg hasn't announced pricing, but Georgis expects an RDX drive to start at around $200. Quantum GoVault drives range from around $300 for 40 Gbytes to $450 for 120 Gbytes.

Georgis sees ProStor expanding from 35 people today to 50 by the end of the year and 75 next year, with additions coming in engineering, business development, and marketing. But the new funding will go mostly toward product development in making RDX more of an enterprise play down the road.

"What's next is migrating technology up market," he says. "We want to make it a more enterprise-capable technology. Our market strategy was to start at the bottom and move up. Over the next several years, we will develop higher-capacity, higher-performance systems."That includes adding encryption, because removable disk drives leave customers vulnerable to the same danger as taking tape cartridges offsite -- they could get lost.

"That's one of the things on our roadmap," Gerogis says of encryption.

He also says RDX drives will increase in capacity every nine months or so, with 160 Gbytes next up followed by 200 Gbytes next year.

ProStor has other engineering challenges ahead. Analyst Greg Schulz of StorageIO says becoming an enterprise play means more than bumping up the capacity.

"If you're going to trust your data to them, you need to consider other things," he says. "The typical drive edge connector is only made for about 100 insertions before the pins start to wear out. What can you do to increase that? How do you protect against electrostatic shock? And sooner or later, you're going to drop a cartridge. How is the data protected if you drop it?"Sutter Hill Ventures led the round, which brings ProStor's total funding to $18.4 million. Previous investors New Enterprise Associates (NEA) and Boulder Ventures also kicked in.

Dave Raffo, News Editor, Byte and Switch

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