Storage Networks Inc., known as an early leader in the storage service provider niche thats now widely considered to be in jeopardy, gave details Thursday of how it plans to transform into a software company.
Coinciding with fourth-quarter and year-end earnings announcements, of $123.6 million for 2001 compared with $48.2 million for 2000, CEO and founder Peter Bell said the Waltham, Mass., company has signed on Electronic Data Systems Inc., which will essentially buy SNIs platform as a product and manage it internally. Along with a smaller sale last fall to BellSouth, of Atlanta, SNI is easing into an official announcement of the productized version of the service provider platform in the second half of this year, Bell told eWEEK in an interview.
SNI is not the first service provider-turned-software vendor--an earlier example is Corio Inc., an application service provider, which made a similar move last May. But its a lot easier to announce than to do, which is why SNIs not rushing: "Youve got to actually rewrite the software. When we announce it, itll be real," Bell said. SNI is still writing code and will begin quality assurance tests in March, he said. Early experience with customers like Merrill Lynch & Co. Inc. will help SNI avoid being controlled by EDS-like customers, he added.
After the software rollout this fall, SNIs likely next step could be storage management. "I think the next major [step] is the movement from block-level storage management to object-level," Bell said, although hes not yet decided whether to build in-house, to partner or to acquire. But, he acknowledges, the road will daunting: EMC Corp., IBM and Veritas Software Corp. all "scare the heck out of me," he said. A baby step in that direction will come in early April, with the upgrade from Version 4.2 of the current StorOS to Version 5.0, Bell added.
Bill North, a storage industry analyst with International Data Corp. in Framingham, Mass., likes what Bell says. "From the very get-go, they said, Its our software that separates us," he noted. And storage management is growing nearly 20 percent a year--"its a multibillion-dollar market in its own right," North said. But, he said, SNIs motivation is not visionary. "Without doing something like this, they would struggle along."