Original URL: http://www.theregister.co.uk/2009/12/04/copan_dies/

Copan moves to indirect sales channel

The MAID lays many people off

By Chris Mellor

Posted in Storage, 4th December 2009 17:55 GMT

Comment Copan Systems is moving to an indirect sales model, sparking closure rumours as many people were laid off.

Several people contacted The Reg on Tuesday saying that Copan was closing down. David Dew, Copan's VP for engineering and quality and thus in charge of the company's MAID (Massive Array of Idle Disks) technology product development, emailed us on Thursday saying: "Copan has not shut down."

One of our contacts, based in Longmont, responded to that on Thursday, saying: "Well...if you only have eight people from about 60 (seven as far as I know, Dew might stay there for a few more days ... on [a] consulting base), as a hardware company, not a single one is left in manufacture and and test; if they want to say it is not shut-down, then they have to invent something. The seven people remaining are told it won't be long until they are let go. Actually they just let one tech support go today, so it is six now."

Maybe we can call it "severe downsizing" for a few more weeks. Also keep in mind that David Dew was the one who told people last quarter: "We received more than 40 orders this quarter and Copan has passed the worst point."

We contacted Jim Flyzik, president of the Flyzik group, a strategic consultancy, who became a special advisor to Copan in March. Asked about Copan closing down, he said: "No, I don't believe that they have. I think they have some type of relationship with IBM [and] I think they are changing their marketing approach."

Today David Dew said: "While it is not a big secret that we have put a number of employees on furlough as a cost-cutting measure, we have not shut down as some reports have stated.

"We still have adequate service and engineering resources and are fully supporting our customer base. We are in process of going to go an indirect sales and a major sales strategy transition comes with some ups and downs.

"While obviously this week’s action certainly could be seen as a negative development, the intention is to bridge the sales transition while the new channel ramps."

One of our contacts said: "This was such a promising company a few years back and everyone was motivated to work hard and make something happen. But it was completely ruined in the last two years when Mark Ward brought in his team of 'Know nothing, don't bother to know anything, don't care about anything' executives and managers from Sun.

"They believe as long as they pile up enough bodies, no matter who they are, they can get things done. We figured that was how Sun was destroyed. [It's] very sad and depressing, 50+ people lost [their] jobs after $110 millions flushed."

Dew did not answer questions about what was happening to the two remaining founders: chief technology officer Chris Santilli and federal systems president Will Layton.

The lights are dimmer now

Copan, founded in 2002, invented its MAID technology to store massive amounts of data in densely packed storage arrays with three-quarters of the disks powered down at any one time to save on power costs and, by avoiding heat build-up, to enable drive enclosures to hold many more drives than ordinary drive arrays.

The Revolution array product was geared to answer customers' supposed green concerns, including restricted data centre electricity supply, and to take vast amounts of unstructured and little-accessed reference information off primary arrays, thus enabling them to be smaller and cheaper. The idea was that data on the arrays would be much more accessible than tape vault data.

That was true, and there was enough early success for investors to fund the company though several rounds, and for it to take on an aggressive and expansion-minded CEO, Mark Ward. In 2008 he greatly expanded Copan's development resources and built out a worldwide sales-office infrastructure.

But Ward's efforts were wasted. Customers did not buy the kit, which was heavier than normal arrays. Promising bids were lost because data centre floors were not strong enough to bear the load.

Then the recession happened and the green imperative customers were affected by turned out to be a chimera. They needed to save money, and buying a revolutionary array from a startup seemed a risky proposition - especially when mainstream vendors introduced drive spin-down into their arrays, and when Nexsan introduced graduated spin-down with faster access to data held on partially spun-down drives.

Customers with tape libraries continued to buy them, but then deduplication technology enabled a normal array to hold three to six times its rated capacity of data - or more - because redundant data was detected and ejected. As Data Domain's fortunes rose, Copan's sank.

The investors, through the board, fired Mark Ward in July; no new CEO or temporary CEO was named. Instead, leadership appeared to be in the hands of Dew, Santilli, and Layton. The company shut down sales offices everywhere outside the USA and shrank its sales structure there, as well.

In late August there was a surprise $3m funding round followed by rumours of an IBM interest in the company or its technology.

It's a sad event for the laid-off staff in this Christmas month. The investors may still have hopes of getting a return on their $110m total investment, though. Everything now depends upon the efficacy of the so-far-unidentified channel partners. Let's wish the remaining core of Copan good luck and an early recovery from the recession. The MAID may still yet sing. ®