Box Hill Systems Corp CEO, Philip Black says the $57m acquisition of SAN storage supplier Artecon Inc gives it a shot at being the number three supplier of departmental disk subsystems behind EMC Corp and Data General Corp’s Clariion unit. The stock swap buy will bring Box Hill up to 400 people with revenue of around $200m.
It had to do something. It has had a couple of troubling quarters yet plays in a market that for many is booming. Box Hill is expected to report first quarter net income of around $500,000 on revenue of $14m today. Black admits that because it’s not an internet player and because the SAN storage area network market it is now targeting has not yet materialized, it’s going to be hard to get its stock price moving up. Yesterday it was trading at around $5.75.
The enlarged Box Hill will operate with joint CEOs. Black will focus on international operations while Artecon CEO James Lambert will overseeing domestic business. Black says Artecon, in Carlsbad, California, gives is a much-needed West Coast base and brings it internet and telco experience while their customer bases overlap little. Artecon is the final resting place of Storage Dimensions and also brings with it the Falcon installed base and Novell experience.
Box Hill is an end-to-end Fibre Channel shop while Artecon stops at the connector. Neither attaches to mainframes or minicomputers, but the value proposition for Box Hill is that it can offer storage at half the dollar-per-megabyte rate which competitors charge. Box Hill has just signed to offer Mercury Computer Systems Inc’s Sanergy software which enables files to be shared across SANs, while Artecon is grooming its storage servers as caching appliances having rigged them up with a version of the Inktomi Traffic server it calls CacheBack for internet and telecoms customers.
