After 22 years in the hard disk drive manufacturing business, Quantum announced on Friday that its stockholders have approved the sale of its hard-drive division to Maxtor for $US1.1 billion in stock. The sale also marks a new course for Quantum, which confirmed its leap into a pure-play enterprise storage solutions company.
Over the past year, the data-storage systems manufacturer has cut about 1000 employees in its US operations or about one-quarter of its workforce in preparation for the merger with Maxtor and a change in corporate direction, chairman and CEO Michael Brown said.
Brown called the announcement "an interesting milestone for the company", which will now focus on its data protection and storage solutions business to include network-attached storage (NAS) and storage-area networks (SAN).
"Storage systems growth has reached tenfold for us in the last 10 years," Brown said. "This presents an incredible opportunity for us to evolve and grow as a company by harnessing our expertise in data protection to bring to market new scalable, integrated storage solutions and services for complex networked business environments."
William Hurley, an analyst at The Yankee Group, said Quantum's departure from the disk drive manufacturing business follows a trend over the past five years as the cost of storage continues to plummet, making it more difficult to turn a profit.
"There used to be nine or 10 hard drive manufacturers," he said. "Now there are really only four big players: IBM, Seagate, Fujitsu and Hitachi."
Hurley added that Quantum had 17 per cent of the hard disk drive market in the first half of last year, second only to Seagate Technology. Maxtor followed with 14 per cent.
Separately, Quantum/ATL, a unit of Quantum's DL00, is a gigabit Ethernet-based network-attached backup technology that protects the data on multiple Network Appliance filers.
Earlier this month, the company said it was engaging in a tape format war with Hewlett-Packard, IBM and Seagate with the delivery of its SuperDLTtape drives, which are capable of holding 100GB of data, the equivalent of 50 feature-length movies, on a single cartridge. The new format tapes will be sold under the Quantum brand and manufactured by Compaq.