Quantum acquires ADIC

Posted on June 01, 2006

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By Kevin Komiega

Quantum is expected to complete its acquisition of rival tape library manufacturer Advanced Digital Information Corp. (ADIC) by summer’s end, broadening Quantum’s hardware-and-software portfolio and solidifying the combined company’s position as the number-three vendor in terms of library revenues (see figure). When the deal was announced in May, it was valued at about $770 million.

Quantum will nearly triple its sales force and expects the acquisition to bolster its financial position and increase opportunities for future growth in the channel. The acquisition will also give Quantum a foot in the data-center door with large enterprises, as well as an expanded roster of OEMs-including EMC, which resells ADIC’s tape libraries-and other partners.

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Bob Abraham, president and analyst with the Freeman Reports tape industry research firm, says that a combined Quantum and ADIC will be able to offer virtually every flavor and format of tape media, drive, and library.

“They will be in a league that before neither company could reach,” says Abraham. “They will not be on par with Sun and IBM in terms of number of people and support locations, but they will have about a 22% share of the overall tape library market.”

Quantum has faced some tough times financially in recent years, but the acquisitions of Benchmark, Certance, and now ADIC seem to indicate that the company is turning the corner. “We have been on a long path toward transforming Quantum, dating back to when we spun off our hard drive business, and…little by little we’ve gone through a major consolidation of our manufacturing and operations to build a strong company,” says Rob Pickell, Quantum’s VP of worldwide marketing.Now, says Pickell, Quantum plans to use that newly found strength and the addition of ADIC’s technology and channels to solidify its tape offerings and expand its reach into markets such as disk-based backup and building intelligence into tape library architectures. Pickell also says there is very little overlap between the companies’ respective product lines and a lot of overlap in where Quantum and ADIC were spending their research and development dollars.

“The biggest changes will be in our ability to bring new non-tape products [disk-based libraries, etc.] to market a lot quicker.”

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