Softek flies solo

Posted on May 01, 2004

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By Heidi Biggar

Ending speculation about the company's future ownership, Fujitsu Software Technology Corp. (Fujitsu Softek) last month announced a management-led buyout from parent company Fujitsu Ltd.

The newly formed company, which was incorporated in Delaware as Softek Storage Solutions Inc., will operate as an independent storage management software company. It is funded by financial investors Investcorp, Columbia Capital, and Needham Capital Partners.

Not wishing to bite the hand that has fed it for the past three years, Softek will maintain a strategic relationship with Fujitsu Ltd. for at least the next three years, according to company officials. Fujitsu, in turn, will become a Softek OEM, distributor, and reseller.

For now, Fujitsu will bundle Softek's data availability and enterprise storage resource management (ESRM) software with its disk arrays for sale in central Europe, Japan, and other Asia-Pacific markets; work with Softek on joint-sales opportunities in North America, South America, and Europe; and, as a Softek Synergy Partner, sell Softek products worldwide, according to company officials.

The decision to separate from Fujitsu has been months in the making, says Karen Dutch, former vice president of product management for Fujitsu Softek and now general manager of Softek's open-systems group. As for the timing of the launch, Dutch says it is on the mark with ongoing trends, pointing specifically to signs of a strengthening economy and increased storage spending by IT organizations.

"Fujitsu Softek was at the point where it could stand on its own," says John Webster, senior analyst and partner at the Data Mobility Group consulting firm. "It was in the best interest of both Softek and Fujitsu [to make this move]."

According to Gartner, the storage resource management (SRM) market is expected to grow at a five-year compound annual growth rate of 24%; data replication software is projected to post a 9% CAGR over the same period.

But Softek's road is not without obstacles. Despite a base of about 200 open-systems customers (the company reports a total customer base of more than 725), Softek is expected to continue to face steep competition from vendors such as Computer Associates, EMC, IBM, and Veritas, as well as from a slew of smaller vendors and start-ups.

Nonetheless, Dutch believes Softek's focus on storage and its history with Fujitsu make it a clear contender in the open-systems storage management software market. "We're not a huge company, but we're not a start-up either," she says.

Softek offers a line of ESRM, data availability, and quality of service (QoS) software products. The company has been divided into two lines of business— mainframe and open systems—in an effort to better channel development in these respective areas.

The company is expected to announce new releases of its SANView and Storage Manager products within the next month.


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