Feeds

Adaptec to offload costly systems growth engine

Anyone need a kick in the NAS?

Combat fraud and increase customer satisfaction

Adaptec has issued a systems SOS, asking a financial services firm to help it offload a pair of storage lines once meant to be the future of the company.

Adaptec this week recruited Credit Suisse First Boston (CSFB) to find a suitor for its Snap Server network attached storage (NAS) boxes and Eurologic block systems hardware and software. This move comes as troubled Adaptec tries to streamline its business and focus solely on SATA and Serial Attached SCSI products. Adaptec spent $30m to buy Eurologic in early 2003, and another $100m to pick up Snap in mid-2004.

"As mentioned in our last earnings call, our management team has been conducting a very thorough analysis of all of Adaptec's businesses and operations," said Scott Mercer, the interim CEO of Adaptec. "While we have successfully built a solid suite of storage systems products and gained a volume leadership position in NAS, it became clear that we needed to simplify our business model."

Despite $80m in revenue per year, Adaptec's systems business appears to be more of a burden than a blessing at this time. The company has fumbled through a year of poor earnings results. Most recently, Adaptec posted first quarter revenue of $98.4m - down from $115.5m one year earlier. It also reported a net loss of $36m compared with flat net income in the first fiscal quarter of 2005. Adaptec has lowered its fiscal guidance in four straight quarters.

Adaptec had once managed to secure a nice win for the Snap business, serving as a supplier for IBM. That business, however, never swelled as hoped.

In late September, the company announced another long-term savings move by saying it renegotiated a RAID controller deal with IBM.

"In analyzing Adaptec's various businesses, it became clear to us that delivering add-on products for IBM's eServer iSeries and pSeries systems would not be a long term profitable business opportunity for Adaptec," it said at the time.

As a result, Adaptec received a $22m payment from IBM and announced a $26m loss "on the sale of assets and impairment of related goodwill."

All has clearly not been well at the company since CEO and President Robert Stephens retired in May.

The move away from systems caused underwear to bunch up throughout the financial community. Adaptec had positioned the systems products as key to its future growth and downplayed SATA and SAS sales.

Where will Adaptec's gear end up? Surely plenty of players are in the market for a discounted NAS line. ®

Combat fraud and increase customer satisfaction

More from The Register

next story
This time it's 'Personal': new Office 365 sub covers just two devices
Redmond also brings Office into Google's back yard
Kingston DataTraveler MicroDuo: Turn your phone into a 72GB beast
USB-usiness in the front, micro-USB party in the back
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
BOFH: Oh DO tell us what you think. *CLICK*
$%%&amp Oh dear, we've been cut *CLICK* Well hello *CLICK* You're breaking up...
AMD's 'Seattle' 64-bit ARM server chips now sampling, set to launch in late 2014
But they won't appear in SeaMicro Fabric Compute Systems anytime soon
Amazon reveals its Google-killing 'R3' server instances
A mega-memory instance that never forgets
Cisco reps flog Whiptail's Invicta arrays against EMC and Pure
Storage reseller report reveals who's selling what
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.