Viathan Dantz's Into the Spotlight

Dantz Development, which has made backup software for Windows and Macintosh platforms for the last 17 years, is about to get exciting.

This week. the little-known Orinda, California-based firm acquired Viathan Corporation, a software company focused on storage virtualization. The financial details of the deal were not disclosed.

Forecast to have massive market potential, storage virtualization is still the hottest thing in the storage networking market today (see Virtual Reality? and Venture Capital Survey). As a result, Dantzs acquisition of Viathan puts the company firmly on the map.

In case you’ve missed the wall of hype over the last six months, virtualized storage is supposed to give users the ability to access data stored on any vendor's device, via any operating system and across any transport protocol. It’s important because it offers significant cost savings and eases management issues for companies coping with ever-expanding volumes of data.

”We’ve gone from the least sexy part of the market to the opposite end of the spectrum,” says Eric Ullman, technical marketing manager at Dantz.The company might have found its way to the sweet spot of the market, but it will have a tough job competing in it. First it has to decide whether to integrate Viathan’s software into its own backup products or continue developing them as standalone solutions. It hopes to have this worked out in time for a beta release early in 2002, with general availability sometime towards the end of the year.

Dantz also faces notoriously aggressive market leaders like Compaq Computer Corp. (NYSE: CPQ), EMC Corp. (NYSE: EMC), Hewlett-Packard Co. (NYSE: HWP), Network Appliance Inc. (Nasdaq: NTAP), and Veritas Software Corp. (Nasdaq: VRTS), which all are shaping up to be big forces in this space.

Dantz also must face the swath of startups out there that have already made a significant impact -- FalconStor Software Inc., StorAge Networking Technologies Ltd., DataCore Software, and KOM Networks Inc., to name a few.

The new company hopes to undercut many of these players on price and has a few other aces up its sleeve, too, including an impressive customer list. Nortel Networks Corp. (NYSE/Toronto: NT), Oracle Corp. (Nasdaq: ORCL), NASA, the Swiss National Bank, and Time Warner are all major Dantz users. Viathan has no customers yet.

For its part, Dantz gets connections to the venture capital community that it hasn’t had before. About a year ago, a group of investors, led by Softbank Venture Capital and including Arch Venture Partners and Madrona Venture Group LLC, invested $17 million in Viathan.Whatever the future holds, each party in this merger certainly appears to bring some intriguing assets to the combined business.

— Jo Maitland, Senior Editor, Byte and Switch http://www.byteandswitch.com