StorageNetworks Cuts Workforce In Half

CEO, president and co-founder Peter Bell resigns.

StorageNetworks Inc. laid off half of its employees this week, and CEO, president and co-founder Peter Bell has quit, officials said.

The companys workforce is now at "approximately 110," according to a statement released by the Waltham, Mass., company. Paul Flanagan, COO and formerly CFO, takes over Bells role, the statement said.

Company officials did not return repeated messages for comment. The move follows the cutting of 80 jobs in late October last year.

It is unclear how many customers StorageNetworks has.

The once high-flying industry pioneer originally sold storage as a service, then changed into an infrastructure vendor for mainstream service providers, then changed again into a maker of storage resource management software.

StorageNetworks stock traded as high as $138 in July 2000. It closed at $1.15 yesterday.

"Their best chance at success is to sell the technology theyve developed or the company itself. Otherwise, the revenues generated may not sustain them for very long," cautioned industry analyst Randy Kerns, of Evaluator Group Inc., in Greenwood Village, Colo.

StorageNetworks largest customer is Electronic Data Systems Corp. "We use their software, as well as software from other companies, for our internal data storage management needs. We always have contingency plans in place, both for ourselves and for our clients," EDS spokesman John Clendening said, in Plano, Texas.