Storage Technology Corp has announced the next stage of its effort to turn itself into a storage utility company, though a partnership with Level 3 Communications Inc. In a deal potentially worth $400m in revenue to StorageTek over the next three years, the company will offer pay-as-you-use backup and restore storage services through Level 3’s 21 gateway worldwide network. Storage centralization and the remote management of data is a trend in the storage services market, claims StorageTek.
Initial target customers will be Level 3’s own co-location customer base, but beyond that, StorageTek says it sees expansion opportunities in vertical market applications such as document management and check image archiving. Prices will range from below one cent to several cents per megabyte/per month.
As part of the deal, StorageTek will install storage equipment at Level 3 data centers in New York, Denver, Dallas and Seattle, by the end of the year. London will follow early next year. The San Francisco gateway already has StorageTek systems installed. At each Gateway, StorageTek will install tape, disk and backup and restore utilities connected by a redundant fibre channel storage area network. Capacity buffers will offer room for unexpected growth in customer storage requirements. Professional staff from StorageTek will monitor and manage the systems onsite. StorageTek predicts that within three years, Level 3’s Gateways could house over 50,000 storage servers.
Earlier this year, StorageTek announced its three first storage utility customers, Seattle, Washington-based Atrieva Corp, San Jose, California-based Frontier GlobalCenter Inc, and Torrance, California-based WebVision Inc. Atrieva, which offers PC backup services over the internet, will be the first to use the Level 3 facilities in San Francisco. RedDotNet Inc, a digital entertainment content company, is a new StorageTek storage utility customer.
Separately, StorageTek says it has now settled its patent litigation squabble with Odetics Inc. Back in July, Odetics won a US Court of Appeals ruling backing a $70.6m jury verdict against StorageTek in March 1998. The jury found that StorageTek had infringed certain patents covering automatic tape libraries. StorageTek no longer uses the products affected by the ruling, and hasn’t shipped any for a year. A first trial, in 1996, had ended with a victory for StorageTek. The new settlement will see StorageTek pay Odetics total license fees of $100m, $80m paid immediately. The remaining sum will be paid in two installments over the next two years. Odetics gains around $60m from the settlement, after legal fees. StorageTek gets full settlement and a license.
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