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Copan silence prompts sell-off rumours

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Security for virtualized datacentres

Copan, the high-density persistent storage array vendor, has sunk into virtual silence since parting with its CEO Mark Ward a month ago, prompting rumours that its backers are looking for a sale instead of a new CEO.

Copan produces Revolution storage arrays using MAID - Massive Array of Idle Disks - technology. These arrays can pack disks much more densely in rack shelves because 75 per cent of them are idle at any one time and so are not generating heat.

This technology, with disks spinning or idle, is unique to Copan. It can pack many more terabytes of raw capacity into a rack than any other hard disk drive array supplier as a result, and at a much lower energy cost per square foot of data centre floor space.

The spun-down disks require a little time to spin up when data on them is required. Competitors such as Nexsan offer a graduated form of MAID with intermediate power-saving drive states that respond to data access requests more quickly.

Ex-CEO Mark Ward initiated an expansion of the company's sales infrastructure and its software development capacity, but he was let go in June after revenues didn't rise fast enough to pay for these investments. It appears that the rate of revenue rise, taken together with the recession, indicated that breaking even was looking some way off.

Before Ward left there had been lay-offs, enforced leave and other cost-saving measures as the board pressed him to reduce spend.

There are ten investing firms who have collectively put in $106.9m funding since Copan was founded in 2002. Four of the five board positions are held by representatives from the venture capital community. The president of the board appears to be one of these, Amish Jani, with the fifth board member, the chair of the financial audit committee, being Robert Kocol, ex-chief financial officer of StorageTek.

Copan's website shows that the money men rule the board end-to-end, with no company founder or employee present now that Ward has gone.

The board's concern will be cash burn and getting a return on the VC's investments.

A source familiar with the situation said: "Investors were unhappy they didn't get a return on their investment like Data Domain, and that (CEO Mark) Ward had been shopping the company for a while with no takers, or rather offers they felt were fair."

It is believed that IBM was one of the potential buyers, and that there was: "a big deal cooking with IBM a while ago that was going to bolster the company's fortunes, but it fell through."

The rate of cash burn could be behind the current state of affairs in Copan's sales offices.

Copan's foreign sales infrastructure, set up during Mark Ward's CEO reign, appears to be either defunct or hibernating. Calls to its UK and Germany sales offices are met with messages saying the number is temporarily unavailable (Germany) or requesting you to leave a message (UK). Aimee Welstead, Copan's international marketing director based in the UK, left in January.

Neil Ledger, the director of Copan's UK distribution partner VADition, said: "We haven't dealt with Copan for two months. I think you'll find the UK office has closed down." He didn't want to say anything else about Copan.

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