Quantum to buy tape rival ADIC

By Kevin Komiega

—Quantum announced this week its plans to acquire rival tape drive and library maker Advanced Digital Information Corp. (ADIC) for about $770 million, broadening Quantum's tape hardware and software portfolio.

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 and other partners.

Bob Abraham, president and analyst of the Freeman Reports tape industry research firm, believes a combined Quantum and ADIC brings virtually every flavor and format of tape media, drive, and library, and puts Quantum right behind Sun/StorageTek and IBM in terms of its presence in the tape automation market.

"They will be in a league that before neither company could reach. They tried, but couldn't get there," explains Abraham. "They will not be on par with Sun and IBM in terms of number of people and support locations, but they will be in the low 20% market share. They have a shot now. They have so many pieces in place that it is hard for me to find a hole."

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 vice president of worldwide marketing.

Now, according to 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 backup 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 to market a lot quicker, such as disk-based libraries, software, and data movers," says Pickell.

Quantum expects the acquisition of ADIC to be complete in about three months.

This article was originally published on May 04, 2006