Panasas Plots New Path

Panasas Inc., which gained much of its initial success selling Linux NAS clustering gear to the U.S. government, is looking overseas for its future. As part of the plan, the four-year-old startup's appointed a new CEO, Victor M. Perez (see Panasas Gets New CEO).

"My goal is to have international sales be 40 percent of total sales," Perez says. Opportunities shaping up in Europe and the Asia/Pacific region will help Panasas to profitability by the second half of 2005, he maintains.

While sales to U.S. Department of Energy labs such as Los Alamos and Sandia helped put Panasas on the map (see Panasas), Perez and VP of marketing Larry Jones say Panasas's ability to outperform other NAS gear, due to an architecture that eliminates extra file processing, makes it suitable for other markets, such as geological testing, genomic testing, and film production.

"Seismic processing is a worldwide opportunity. There's just as much work in Aberdeen, Scotland, as there is in Houston, Texas," Perez says.

Right now, though, Panasas has exactly no international business, though it claims to have "about 20" paid-up customers and 30 or so more evaluating its equipment.Without giving out figures, Perez says he hopes to "quadruple" the business next year, in part by adding more sales and marketing folk to the company roster. For now, the company has about the same number of employees it did last fall -- 130; and of that, at least 100 are engineers.

The transition will determine whether Panasas makes it into the big leagues or sticks in its HPC niche -- where it continues to make inroads (see Panasas Extends Sicorp Partnership). Meanwhile, various competitors are attempting their own migration from the startup trenches, including high-end NAS vendor BlueArc Corp. and Isilon Systems (see BlueArc Titan to Battle Giants and Isilon Ices Cool $15.5M). All this adds to the challenge for Panasas.

Perez should help. As the former CEO of controller maker Chaparral, which was sold to Dot Hill Systems Corp. (Nasdaq: HILL) for $62 million last February (see Dot Hill Picks Up Chaparral), he's familiar with the storage networking market. Prior to Chaparral, he spent 22 years at Storage Technology Corp. (StorageTek) (NYSE: STK), where he was COO for five years before resigning as part of a corporate bloodletting in March of 2000.

Perez is Panasas's third CEO in as many years. The first, Rod Schrock, left for personal reasons last December, and was temporarily replaced by Derek Proudian, an entrepreneur who apparently was happy to fill the space as interim CEO without long-term plans.

One thing: Whether or not Panasas goes profitable next year, it will likely not return to the VC well anytime soon. Having scored over $90 million in funding so far, the company is set for the time being -- at least for the year or so in which it hopes to realize its near-term goal.

Figure 1: Victor M. Perez, CEO, Panasas Inc.

Mary Jander, Site Editor, Byte and Switch