Maxtor Exits NAS Business

Hard disk maker cites the size of the market and changing industry conditions.

Hard disk maker Maxtor Corp. announced Thursday that it is exiting the NAS (network-attached storage) business.

The size of the market and changing industry conditions led to the decision, said Mike Cordano, executive vice president for sales and marketing for the Milpitas, Calif., company. Also, Maxtors product line, called MaxAttach, ended up competing against several of Maxtors hard drive OEM customers, officials said.

Maxtor entered the niche in 1999, with an entry-level product called the NAS 3000. The NAS 4000, a rack-mounted device for workgroups, and the NAS 6000, for departmental uses, followed that. A product called the NAS 5000 was developed but not launched, officials said.

Warranties and service contracts for NAS series customers will still be supported. Officials could not immediately say how many customers bought the hardware, or how many are still under warranty.

In addition to the product line shutdown, the divisions 230 employees were laid off, officials said. Maxtor has about 9,000 employees.

Maxtor will continue to seek other parts of the storage industry to expand into, the spokesman said.

Hewlett-Packard Co. resells the NAS 4000 as the S-1000. HP representatives could not immediately be reached for comment.

"I think what this shows is that theres fierce competition in that market space. Its tough to make a buck there because thats a low-margin business," said Randy Kerns, an analyst with Evaluator Group Inc., in Greenwood Village, Colo.

Other vendors may follow, he said. "There [are] too many. This is not unexpected," he said.