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SSPs Switch to Selling Software

Cracks are beginning to appear in the storage service provider (SSP) model, with three players in this sector reinventing themselves as software solutions providers.

Creekpath Systems Inc., the SSP spun out of Exabyte Corp. (Nasdaq: EXBT) a year ago, was the first to announce publicly that it has changed horses midstream. Last week it quietly acquired Datavail Systems, a storage management software company, in a stock-for-stock deal for an undisclosed sum.

Datavails software provides automated storage management software, much like product from InterSAN, SANavigator, and others (see InterSAN Attracts Major InterEST).

”We’re no longer an SSP; we're strictly an ISV [independent software vendor] now,” says Paula Dallabetta, director of marketing at CreekPath. “We discovered how hard it was as an SSP to deploy shared storage resources among multiple customers and decided to focus on the software tools that enable this, rather than provisioning the services."

It’s been tough to change the model from services to software, she says, but CreekPath's segue has been smoothed by a $21 million round of funding from TeleSoft Partners and Sequel Venture Partners in December. “We had all this hardware deployed out there in storage points of presence, and professional services staff, and they had to be exchanged for software developers. This turnaround cost a lot of money."