FibreStream Trickles Out

Small and stealthy storage startup FibreStream Inc. will be stepping out into the open next week -- but does the world really need another low-end NAS appliance?

The Minneapolis-based company says its PC-based Virtual Storage Gateway (VSG) appliance provides NAS connectivity as well as iSCSI block-level access over Gigabit Ethernet, baked together with virtualized management capabilities for medium-sized enterprises.

FibreStream isn't revealing how much funding it has received so far, but VP of sales Steven Dahlin claims the company has more than enough money to get by from "individuals with deep pockets."

"We see us being profitable before the end of the year," he says. "We're looking at doing this very sensibly. We're bootstrapping our bottom line."

Three of the company's investors and board members are Michael Huntly, the former VP of sales at Seagate Technology Inc. (NYSE: STX); John Carlson, the former CEO of Cray Inc. (Nasdaq: CRAY); and Clint Jurgens, who cofounded NuSpeed Internet Systems, the iSCSI router startup acquired by Cisco Systems Inc. (Nasdaq: CSCO) (see NuSpeed Duo Departs Cisco).The startup, founded in January 2001, started beta testing the VSG product last August and completed the trials a couple months ago. Today, the company claims it has already signed up more than 10 partners in the U.S., Canada, and Europe (though it couldn't tell us their names), and says it is currently in talks with a potential channel partner in Korea as well. FibreStream also says it has landed one customer: Risdall Advertising Agency, based in New Brighton, Minn. That company did not return our calls by press time.

"Our focus is on building channel relations -- not direct end-user sales," says Dahlin.

FibreStream CEO Donovan Pederson says the startup employs 12 people, half of whom are engineers. In addition to Pederson, the company's management team includes CFO Tom Von Kuster and CTO Frank Artner, who formerly worked at Ancor Communications (acquired by QLogic Corp. [Nasdaq: QLGC]).

So what's FibreStream's differentiation? (Clearly, it's not the size of its staff.) While some might be skeptical that a teeny-tiny fledgling company can succeed in a space already clotted with competition, Pederson insists that the company's new product has the quality -- and especially a price -- that will allow it to grab a chunk of the market. The list price for a VSG with 1 Tbyte of storage is $21,245, while a VSG without disk storage costs $16,450.

"We have been operating in stealth for some time to make sure that our product is competitive... and that it works," he says. "We feel very confident that we've ended up with a product with very universal applicability at a fraction of the price offered by our competitors."Among the companies that FibreStream will find itself in the ring with are such heavyweights as Network Appliance Inc. (Nasdaq: NTAP), Hewlett-Packard Co. (NYSE: HPQ), and IBM Corp. (NYSE: IBM), as well as smaller players like Snap Appliance Inc., MaXXan Systems Inc., Intransa Inc., and EqualLogic Inc.

Pederson, however, insists that, while large enterprise customers with a preference for recognizable brand names may opt to stick with traditional players, FibreStream is offering the performance and low-low prices that medium-sized companies are desperate for.

This could be a successful strategy -- at least in the short term, says IDC analyst Bill North: "Going after lower tiers of the market can be effective."

But whether cheap-n-easy will pay FibreStream's bills remains to be seen.

Eugénie Larson, Reporter, Byte and Switch