Seagate to acquire XIOtech

by Zachary Shess

Seagate Technology announced plans last month to acquire XIOtech Corp. for approximately $360 million in stock. The acquisition marks the disk-drive manufacturer's entrance into the subsystem market

XIOtech's flagship product, the Magnitude RAID array, is designed for use in a storage area network (SAN) through its REDI architecture, which "virtualizes" storage resources for sharing, as well as for adding, removing and expanding file volumes online.

Specific product plans will be revealed when the acquisition is finalized later this quarter. Phil Soran, XIOtech's president and CEO, is expected to report to Tom Mulvaney, senior vice president of Seagate's Internet solutions group.

Upon approval, the Eden Prairie, MN-based XIOtech will operate as a wholly owned subsidiary of Seagate. Because of the costs involved in developing and marketing SAN-enabled devices, XIOtech should benefit significantly from Seagate's investment, says Robert Gray, research manager at International Data Corp. in Framingham, MA. "I would expect Seagate to be investing in XIOtech before they take money out of it for the next couple of years," Gray says.

This article was originally published on January 01, 2000