XIOtech Fixes a Failing

XIOtech Corp., the feisty little SAN storage company that's trying to get back on its feet, says it has finally eliminated the single point of failure in its Magnitude system with a new clustering architecture.

It could be the X-factor the company has needed. XIOtech's new Magnitude 3D storage array, which it has already started shipping, is based on a distributed controller architecture the company calls Dimensional Storage Clusters, which provides failover capabilities if one controller becomes disabled. That addresses the key shortcoming of the system's previous architecture, and something that has been a sticking point with customers, says Ken Hendrickson, XIOtech's CEO.

"The single biggest knock against us was that we had a single point of failure," he says. "We now have the industry's first true clustering architecture."

The Magnitude 3D, which XIOtech will officially announce next week, will also be able to scale up capacity well beyond the 9.5-Tbyte maximum of XIOtech's current array. The new system provides up to 32 Tbytes in a two-node configuration. In the first quarter of 2004, the company claims, it will be able to handle up to 16 nodes per cluster, for 256 Tbytes total. Baseline pricing for a two-node Magnitude 3D configuration with 2 Tbytes and full software and virtualization licenses is $130,000.

Another benefit of the distributed-controller architecture, according to XIOtech, is that the controller nodes don't have to be in the same rack -- they can be distributed up to 300 meters apart over multimode fiber. Each 2U-high storage controller includes three Intel Corp. (Nasdaq: INTC) i960 processors and four Fibre Channel adapters, and provides port failover in the box.XIOtech says that the only competitor that has anything remotely similar to the capabilities of the Magnitude 3D in terms of clustered controller nodes is 3PARdata Inc. But Rob Peglar, corporate architect at XIOtech, points out that the 3PAR system is engineered around a backplane, which means the controllers must be collocated in the same rack.

The Magnitude 3D requires customers to use an external PC-based appliance, dubbed ICON (which stands for "Intelligent Control"), to manage the storage arrays and controller-node cluster via a Web browser or command-line interface. XIOtech says ICON is also able to manage existing Magnitude arrays as "edge devices" in the cluster. The system is certified with Brocade Communications Systems Inc. (Nasdaq: BRCD) switches; certification is in process with Cisco Systems Inc. (Nasdaq: CSCO) and McData Corp. (Nasdaq: MCDTA) gear.

The company says it has finished beta testing the Magnitude 3D with 10 customers and has sold two systems each to Warner Bros. and the Washington University School of Medicine in St. Louis.

XIOtech is betting -- or, shall we say praying? -- that the Magnitude 3D will give XIOtech an edge in what has become a highly competitive market for midrange storage. But the system will still be going up against some serious challengers, including EMC Corp.'s (NYSE: EMC) Clariion CX line; IBM Corp.'s (NYSE: IBM) FastT; and Hewlett-Packard Co.'s (NYSE: HPQ) Enterprise Virtual Array (EVA).

With a $100 million run rate, XIOtech is growing faster than the rest of the industry, Hendrickson claims. But he acknowledges that the privately held company is still in the red. "We're not making money yet, but we will be in a few quarters," he promises.XIOtech, based in Eden Prairie, Minn., has 309 employees, a third of which are in sales. That's down from a peak of around 420 last year, when it was owned by disk drive maker Seagate Technology Inc. (NYSE: STX) (see Seagate to Spin Off XIOtech?). Hendrickson says now that the company overexpanded its sales force and has adjusted its headcount accordingly.

The most significant challenge now for the company is expanding beyond its installed base of about 1,000 customers. "We have great traction with our existing customers -- 75 percent of last quarter's sales were to existing customers," says Hendrickson. "The bad news is we're not reaching new customers." To broaden its reach, the company is looking to sign up about 10 resellers and is also looking at OEM possibilities.

The Magnitude 3D launch is the first major product rollout under XIOtech's new ownership. Seagate sold the majority stake in XIOtech to Oak Investment Partners in November 2002. Hendrickson, who was previously CEO of Ancor Communications (acquired in 2000 by QLogic Corp.), joined the company in March 2003 (see XIOtech Snatches Rash of Cash, Seagate Airs XIOtech Finances, and XIOtech Hot-Swaps CEO).

Oak's investment in the company -- the amount of which has not been disclosed -- has been an important factor in dispelling customer concerns about the viability of XIOtech. "I have money in the bank to go 20 quarters," Hendrickson says.

Now that it has a solid financial backer and what it claims is a hot new product, evidently what XIOtech needs to do now is go out and sell the damn thing.Todd Spangler, US Editor, Byte and Switch