Xyratex acquires nStor

Posted on September 01, 2005

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By Dave Simpson

Xyratex Ltd. is nearing completion of its acquisition of nStor Technologies in a cash deal valued at approximately $21.2 million.

Xyratex officials say that the acquisition will round out the company’s product line primarily by adding entry-level RAID controllers and management software to its portfolio. Xyratex defines entry-level as external storage systems with an end-user price of $15,000 or less. Xyratex also has its own RAID controller technology and sells systems with controllers from third parties such as Infortrend and other vendors.

nStor sells RAID management software and SCSI (including Serial Attached SCSI, or SAS), Serial ATA (SATA), and Fibre Channel controllers and subsystems. nStor’s key OEM customers include Gateway, NEC, and Rackable Systems.

Xyratex focuses on the OEM channel with two lines of business: components for disk drive manufacturers and JBOD/RAID disk subsystems for large OEMs. On the components side, Xyratex sells equipment such as servo track writers, production test systems, and disk automation products to drive manufacturers such as Seagate and Western Digital.

On the controller/subsystems side, Xyratex sells to OEMs such as Network Appliance, as well as Acer, BlueArc, Bull, Comverse, Concurrent, Data Direct, and SGI. Most recently, Xyratex signed an OEM deal with Xiotech. Network Appliance accounted for more than 75% of Xyratex’s fiscal 2004 revenues in the array side of its business.

Xyratex is currently an exclusive supplier to Network Appliance, but Dot Hill in July announced that it has signed an OEM agreement with Network Appliance, which would end Xyratex’s single-source status with NetApp (although the Dot Hill relationship with NetApp is not expected to ramp up until the middle of next year).

In addition to Dot Hill, Xyratex competes primarily with disk array/controller vendors such as Adaptec and Engenio on the OEM front.

Most recently, nStor announced the OneStor series of SAS-based disk systems, which can be configured with SAS and/or SATA drives and SAS (model 5000AA) or Fibre Channel (model 5200FA) host interfaces. The subsystems come with nStor’s StorView management software and can scale up to 24TB.

nStor is headquartered in Carlsbad, CA, and Xyratex is headquartered in Havant, UK.


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