Quantum Spins Off Snap, Creates 100 Percent Channel NAS Vendor

Also on Tuesday, the new company, Snap Appliance, acquired another vendor, Broadband Storage. Broadband Storage, an Irvine, Calif.-based startup developing technology to combine NAS and SAN capabilities, has until now been in stealth mode.

Snap is an experienced vendor and channel partner out of the gate, said Mark Pollard, vice president of marketing and business development, who joined the company from Broadband.

"[Snap saw an opportunity to take the No. 1 volume [NAS product and the No. 1 brand in this space, merge it with next-generation technology from Broadband Storage, and build a real strong player," Pollard said.

Snap has two significant investors, Mellon Ventures and Moore Capital Management, which together have invested about $25 million over two financing rounds, said Pollard. Quantum retains an equity stake of just less than 20 percent in Snap, the maximum allowed before it would have to recognize Snap's results in Quantum's books, said Rob Pickell, vice president for Quantum's Storage Solutions Group.

Snap already has an installed base of more than 110,000 appliances worldwide, all sold via partners, said Eric Kelly, president and CEO of Snap.

"The channel has been successful for us to date," Kelly said. "We expect to continue down that path."

In 2001, Quantum was preparing the Snap division for a spin-off. Then, in April 2002, Quantum put Snap and the company's ATL tape automation division into the Storage Solutions Group, said Pickell.

The move was designed "to let us leverage Snap's NAS strength in the channel," he said. "We've been very successful at this. It was a tactical win."

Snap was not a profitable operation for Quantum, acknowledged Pickell. He said Quantum expects to break even this quarter and to potentially turn a profit next quarter.