SANgate Tries Again

Even as startup SANgate Systems Inc. prepares to demonstrate a brand-new appliance at the Veritas Software Corp. (Nasdaq: VRTS) conference in Las Vegas next week, the company is still trying to convince customers to buy its first product, which has been shipping since last July.

Its new SANgate S2100 is an integrated disk backup and recovery system. Based on the company's Fibre Channel adapter technology, the appliance can scale both capacity and performance for configurations starting at 3.5 Tbytes and going up to 200 Tbytes, the company claims. In addition, SANgate says it has developed its own application software, which enables the appliance to emulate a variety of different tape libraries and tape formats, thus accommodating customers existing environments.

"The application actually thinks it’s talking to a tape library," says Paul Feresten, SANgate’s VP of marketing and business development. "When Veritas looks at us, they see cartridges." [Ed. note: A sign of true love in some early North American Indian cultures.]

Since the appliance looks like one -- or multiple -- tape libraries, customers won’t have to reconfigure their infrastructures or retrain their staffs, according to SANgate. Meanwhile, it claims that the appliance can offer five to seven times the performance of a traditional tape library, while simultaneously copying the data to tape for archival purposes.

Feresten says the appliance, which is expected to have a starting price around $60,000, helps customers dramatically reduce their backup windows, as well as their total cost of ownership. It also provides fast file recovery directly from disk, he says.But the SANgate S2100, which will be competing with a long line of products already shipping, has yet to even reach beta. Feresten says the company is currently in the process of recruiting beta customers and that it expects to start testing by midsummer.

He insists that, while companies like Quantum Corp. (NYSE: DSS) are already shipping disk-backup systems that emulate tape, SANgate’s new appliance will be well worth the wait (see Quantum Digs Into Disk Backup). No one else in the industry can emulate a variety of tape libraries simultaneously in a single appliance, he says: "Customers don’t just have one type of tape library."

IDC analyst Rick Villars says he’s not familiar with SANgate’s new product, but that it sounds like the company is at least in tune with industry trends. High-performance disk-based data protection and backup, he says, "is an excellent path to be pursuing right now."

However, given the company's lack of success with its first product, it's hard to tell whether its second will do any better. SANgate has yet to find its first customer for the SANblaster 1000, an out-of-band data-migration appliance it started shipping in July 2002. Feresten says the company is in discussions with five or six potential customers, and he expects to have a signed contract in hand by the end of this quarter. "Things have been moving a bit more slowly than we would have liked," he concedes. "But now things are looking optimistic. All signs are very positive."

Well, not all the signs have been positive: As part of a "realignment" this January, the startup laid off 22 employees at its Israeli R&D facility -- and has subsequently cut the four remaining staffers in Israel. SANgate, based in Southborough, Mass., now employs 21 people, 16 of whom are engineers. "We’re right about the right headcount now to get this done," Feresten says (see SANgate Shuts Israel R&D).Something else that's helping the company launch its second product is the $4 million to $5 million inside round of funding it landed in March this year from Jerusalem Venture Partners, one of its existing investors. The company, founded in January 2000, had previously received a total of $25 million from Jerusalem, which also participated in the March round, and Battery Ventures. SANgate says it has adequate funding to bring the S2100 to market.

One thing SANgate still doesn’t have, however, is a permanent CEO. After losing its third CEO last fall, the startup is still under the leadership of its CFO and interim CEO George McHorney (see SANgate Loses Third CEO). The company says it's currently in the process of interviewing several "experienced" executives. [Ed. note: We respectfully suggest hiring someone who knows how to close a deal.]

— Eugénie Larson, Reporter, Byte and Switch