Panasas Stays Hermetically Sealed

Panasas Inc. is on track to ship its NAS appliance in June -- but customers using Windows or Unix servers will be disappointed, as it will not support CIFS or NFS protocols out of the gate, Byte and Switch has confirmed (see Panasas Pins Future on Unproven Spec).

CIFS, or Common Internet File System, is Microsoft Corp.'s (Nasdaq: MSFT) protocol for network file sharing, while NFS, or Network File System, was developed by Sun Microsystems Inc. (Nasdaq: SUNW) and is the standard for sharing files between Unix servers.

Without CIFS or NFS, then, Panasas is ignoring virtually the entire NAS market.

The story smacks of a similar problem that another next-gen NAS player, Zambeel Inc., ran up against when it decided not to support CIFS from the get-go. The only news out of Zambeel these days seems to concern its dwindling staff (see SAN Startups on the Block, Zambeel COO Skedaddles, Starbucks Hotspots (Slight Return), and Zambeel Slams Windows Shut).

The first release of Panasas's appliance, code-named SmartDrive, will include a proprietary distributed file system running on Linux, according to sources familiar with the company's plans. That means any host or client that wishes to access the Panasas NAS box will have to be running a Panasas's Linux-based file system. The system will not support snap mirroring, either, they say.The company maintains that "it is a fully functioning product for its target market," says Paul Gottsegen, VP of marketing at Panasas. He says a second product will be released later in 2003 that will have "broader market appeal." [Translation: "will support industry standards."]

Gottsegen declined to comment on the market segment he mentioned, but with a bit of digging we discovered that Los Alamos National Laboratories is a beta customer. The lab confirmed it has a Panasas system, but was unable to say how it's using the box -- much less whether or not the system is any good.

To boil it down, Panasas is releasing a stripped-down, Linux-only version of its product targeting the high-performance computing (HPC) niche to get something to market, say sources close to the company. Panasas is, after all, beholden to its VCs, which have so far stumped up an astonishing $67.4 million in funding for the startup without so much as a whisper from the company in two years. Panasas raised a third round of $32 million in September, 2002 (see Panasas Pipes in $28M and Panasas Hauls in $32M Round).

The firm laid off about six employees in engineering last month and cut 15 sales, marketing, and administration posts last September while raising its third round. Its headcount is still high at approximately 120.

And a word on the members of Panasas's management team and their extraordinary expenses: The company still maintains three offices -- manufacturing in Houston; development in Pittsburgh; and a central headquarters in Fremont, Calif. President and CEO Rodney Schrock lives in San Diego and flies to Fremont once a week. Gottsegen lives in Houston and travels to Fremont, while Garth Gibson, founder and CTO, lives in Pittsburgh and also frequently travels to Fremont. [Ed. note: Expensive commutes to incur for a startup, no?]When it eventually launches its product, Panasas will compete with BlueArc Corp., Spinnaker Networks Inc., and Z-force Inc., as well as EMC Corp. (NYSE: EMC) and Network Appliance Inc. (Nasdaq: NTAP).

Jo Maitland, Senior Editor, Byte and Switch