ADIC: Tape's No Rerun

Judging by Advanced Digital Information Corp.s (Nasdaq: ADIC) sales, tape still has a place in the world of backups, depending on how it's packaged and sold.

ADIC CEO Peter van Oppen says sales of the company's i2000 tape drive integrated with the company’s SAN management and file system software helped fuel record fourth-quarter and 2003 total sales, and he’s ready to take the next step.

“The strategy is working,” van Oppen said during a conference call with analysts.

Van Oppen says the new tape library took substantial market share and helped boost his company’s software sales. He also credited an overall improvement in the economy and favorable OEM relationships for solid numbers this quarter.

Dell Computer Corp. (Nasdaq: DELL) (24 percent) and IBM Corp. (NYSE: IBM) (23 percent) account for nearly half of ADIC’s sales. Its other OEM and reseller partners are Cray Inc. (Nasdaq: CRAY), Fujitsu Siemens Computers, Hewlett-Packard Co. (NYSE: HPQ), and Sun Microsystems Inc. (Nasdaq: SUNW).ADIC reported fourth-quarter sales of $118 million, up around 40 percent from last year. Its 2003 sales were $424 million, up about 26 percent from 2003. Net income was $5.8 million for the quarter and $12.5 million for 2003.

Van Oppen said fourth-quarter sales reflected improvement across the board. He said software sales benefited from the release of the i2000 and grew from 33 percent of total sales in the third quarter to 35 percent in the fourth. Standalone software sales increased 25 percent sequentially and 9 percent from last year; and both branded and OEM sales rose. Branded sales accounted for 51 percent of sales, the same as a year ago.

Van Oppen forecasts sales next quarter to be similar to the just-completed quarter, and he gave guidance for 2004 sales of $500 million. He said ADIC received significant orders from major corporations in the last 60 days.

Introduced in March, ADIC's i2000 provides an internal library control server and can handle between 100 and 2,200 cartridges, which can be a mix of AIT, LTO, or SDLT. The tape library uses ADIC’s StorNext management software (see ADIC Launches i2000 Library).

Next up is the PathLight VX, which will have disk-to-tape backup capabilities. Van Oppen says he is sticking with his earlier claim that the PathLight VX will be available by the end of 2003: “We expect shipments by the end of the year." (See ADIC Whips Out Big Disk.)— Dave Raffo, Senior Editor, Byte and Switch