Since 2003 Maxxan has clocked up around 60 customers for its SAN switches and directors, and on top of that has sold several hundred appliances running FalconStor Software Corp’s virtualization code. The company has raised a whopping $113m in funding and hopes to break out in a profit around the end of the year.

Maxxan’s switches and directors are so-called smart switches that can host applications directly. But despite repeated threats to do so, the company has not yet exploited this ability. The most it has done is to offer Intel-powered blades that share the same chassis as its directors, and run FalconStor software.

That decision to stick to vanilla switching, and to rely on FalconStor appliance-driven business for its bread and butter may have been very smart, given other vendors’ experiences.

Veritas Software Corp ported its popular volume management software to Cisco Systems Inc’s MDS 9000 smart switch, and then had to scrap it after scoring zero production implementations in a year on the market. Maranti Networks Inc’s smart switch and software was highly praised by analysts but never actually scored enough sales to stop the start-up from going under last year.

But those products offered data migration and replication functions, something that Maxxan has decided not to go for yet on its smart switches.

Instead Maxxan will ship 16-port line cards that provide 2Gbps wire-speed 256-bit AES encryption across any of the ports. Fitted to the company’s switches and directors, these should provide much greater scalability and density than conventional in-line encryption devices such as those from NeoScale Systems Inc or NetApp’s subsidiary Decru Inc.

They may also make them easier to build into existing networks because of their switching capability, which contrasts with the straight-through nature of even the multi-port Decru or NeoScale devices.

Maxxan’s marketing vice-president Jeff Whitney said: We can fit 64 ports into a 5U device. You’d need 10U to 12U’s worth of encryption appliances to do the same, and you’d also need the switches.

Maxxan will be aiming at larger customers. Encryption appliances [such as those from Decru] are pretty good if you’ve only got a couple of tape drives to back up. We’re aiming at companies with multiple drives to encrypt, said Whitney.

In the past, Maxxan had talked about launching data migration and replication applications for its hardware. But Whitney said: We always had encryption on our schedule. It just came to the fore-front of our customers’ minds.

Maxxan is now so committed to encryption that it is now calling its MXV250 and MXV500 devices Secure Storage Application Platforms.

The encryption line cards will ship in May from Maxxan’s resellers. The company said that it knows that key management is a critical component of any encryption system, and has split its KM functions across storage and security administration roles.