Dot Hill scores four more years with HP

Trying to avoid Sun stroke

By Austin Modine • Get more from this author

Posted in Storage, 8th January 2008 05:45 GMT

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Hewlett-Packard seems pleased with its OEM arrangement with storage manufacturer Dot Hill.

Pleased enough that HP is extending the gig from one to five years and opening the possibility of reaching further into Dot Hill's hardware portfolio.

The new agreement covers a more expansive treaty for providing RAID storage arrays to HP's various lines, rather than specifically for the StorageWorks 9000 Virtual Library System as before.

Dot Hill seems to be betting on the affection, and has offered HP a five-year warrant to purchase 1,602,489 shares, or roughly 3.5 per cent of outstanding Dot Hill stock, at $2.40 per share. It's now also anticipating more revenue as a result of the agreement. Dot Hill raised its fourth quarter revenue expectations to $50m-$52m from its previous $44m-$48m forecast.

That won't bump the RAID firm into profitability, however. Dot Hill still expects a fourth-quarter loss of 10 cents to 15 cents a share.

Dot Hill making sweet with HP appears to be a necessary step to diversify its OEM channels beyond Sun Microsystems. The company's coffers long depended on Sun as an OEM buyer of low-end Fibre Channel SAN and SATA systems. ®

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