Crossroads Heads Down New Road
Launches first product in series aimed at company turnaround
February 11, 2005
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Crossroads Systems Inc. (Nasdaq: CRDS) has taken another step down the path of reinventing itself, launching a backup-acceleration appliance that foreshadows more to come (see Crossroads Adds Backup Appliance).
Crossroads is known for its multiprotocol bridges, but the struggling vendor has staked its future on developments in iSCSI and intelligent software (see Crossroads at the Crossroads). Its latest product, called DataMover 240f, is the first in the company's Network Storage Controller family, which will eventually include appliances handling additional protocols such as iSCSI and SCSI.
The new product addresses a potentially serious issue with storage administration -- backup bottlenecks. It sits in an FC SAN and supports the SCSI protocol's Extended Copy (XCopy) command to perform backup-and-restore functions on behalf of host servers.
Typically, the host retrieves data and sends it to the appropriate target device itself. With XCopy, the host instead relays these commands to an intelligent device such as DataMover, which carries out the commands more quickly and frees the host for other functions.
"The backup server might have multiple HBAs, but it has fairly limited bandwidth," says Tres Hill, product manager at Crossroads. "We've seen backup implementations where servers are getting only 10 megabytes per second."To improve throughput, enterprises might deploy either more backup servers or other XCopy-compatible devices such as multiprotocol bridges. Hill says that DataMover, with its six Fibre Channel ports, offers a cheaper alternative at a list price of just under $10,000. And while disk-based backup devices also aim to speed backup and recovery, Hill maintains that DataMover is complementary in its ability to move data from disk backup to tape archives (see New Enterprise Backup: Proceed With Caution).
Though it has been around for some time, XCopy -- also known as serverless or server-free backup -- has seen limited adoption and failed to live up to its promise. "It's too bad," says Greg Schulz, senior analyst at Evaluator Group. "It's a really good enabling technology that would help address a lot of things, but it has lacked software support."
DataMover works with a handful of backup applications that currently support XCopy, says Hill. Those include Veritas Software Corp. (Nasdaq: VRTS) NetBackup (for Unix operating systems) and Veritas Backup Exec (for Windows), as well as Computer Associates International Inc. (CA) (NYSE: CA) BrightStor, CommVault Systems Inc. Galaxy, and Hewlett-Packard Co. (NYSE: HPQ) Data Protector.
Still, the jury is out on how much the Crossroads appliance can contribute to a turnaround at the company. "Crossroads does have the legacy installed base that they can leverage, mainly with HP and StorageTek," says Schulz. "[DataMover] will help Crossroads near term; however I'm not sure how it will help them longer term."
Indeed, the product sets the stage for coming releases that Crossroads hopes will bolster its flagging sales and separate it from the pack of relatively quiet multiprotocol device vendors. Recent deals are expected to culminate soon in new iSCSI and storage-management products (see iVivity Comes to Crossroads and Crossroads Picks Up Teracruz ).But the new direction will have to rejuvenate Crossroads sooner rather than later, as the company grapples with an ongoing spate of personnel changes and financial hiccups. In January, CFO Richard Sorenson resigned just three months after replacing previous CFO Andrea Wenholz, who left in August (see Crossroads Names New CFO and Crossroads CFO Resigns). Also last month, David Boles was hired as CTO (see Crossroads Names CTO).
Sorenson's departure followed a tepid earnings report the previous month. Revenues for the company's fiscal fourth quarter came in at $6.6 million, a 26 percent bump sequentially from $4.9 million but a 29 percent slide from $9.3 million in the year-ago period. The company blamed the numbers on declines in intellectual-property licensing and Storage Technology Corp. (StorageTek) (NYSE: STK) OEM sales.
Net losses for the quarter rose to $2.5 million ($0.10 per share), up from $2.1 million ($0.08 per share) in the previous quarter and $317,000 ($0.01 per share) a year ago. Fourth-quarter earnings were affected by a $1 million charge the company took in December for settling a shareholder lawsuit.
For the full year, Crossroads tallied revenues of $26 million in 2004, compared with $33 million in 2003. Net losses in both years were roughly equal at $6.4 million ($0.25 per share).
Brett Mendel, Senior Analyst, Byte and Switch Insider0
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