Who's got "vision"? In the mass-storage industry, Adaptec and Breece Hill.

It was the best of times; it was the worst of times. No ... it's just been the worst of times. The economy continues to be distressed. IT budgets are growing, but at a painfully slow pace. The business plans that seemed rock-solid don't always stand the test of time. The statesman Benjamin Disraeli said that change is inevitable, and so it seems in the mass storage industry as well.

This month we examine two companies, Adaptec and Breece Hill, who have experienced change--becoming in many ways new companies, arguably better able to compete in a hostile climate.

Grow, Acquire, and a Footprint

Adaptec (Milpitas, CA) is best known in the peripheral controller industry, established by industry luminary Larry Boucher. For years, they maintained a solid business in SCSI technology and RAID controllers. But in the summer of 2002, CEO Bob Stephens and other top management, including Ahmet Houssein, realized that the market segments they focused on would be inevitably invaded by much bigger organizations. In Houssein's words, "By 2007, it would be no place to be."

The management team realized that transforming a company was not an instantaneous process. So the business went on something of a "vision quest" over a nine-month period. The beginning of the vision was the decision to address the storage of non-transactional data--what the firm would refer to as "reference data." During the process, the business and architectural teams realized that they didn't have enough information in-house.

Adaptec execs engaged the industry by connecting with analysts including Todd Gresham at Meritage and Michael Peterson's InFusion team. Over time, the determination to grow, acquire and establish a new footprint in the industry took hold.

The first acquisition for Adaptec was the asset suite of Tricord, in order to have the tools to enable systems-level delivery. The company constructed and built for the OEM and the channel. The acquisition of Ireland-based Eurologic was next, delivering Adaptec both a new customer base and a new knowledge base as well. Adaptec could build boxes now, and their ability to manufacture systems was jump-started.

The only thing missing to realize the vision of a systems company able to manage reference data was the ability to pull together with the software component: mirroring, snapshots, replication. This led to the acquisitions of Ellipsan, and then Snap Appliance.

The fleshed-out realization of the Adaptec vision is in (what Adaptec's Mark Pollard calls) the Flexible Storage Architecture--a fully leveraged platform dedicated to the storage and management of reference data. Flexible Storage Architecture is a modular platform that is based on industry-standard, pre-developed, and interoperable components, systems, and software

A menu of pre-tested, pre-qualified, interchangeable "building blocks" that are made up of components, systems, and software allow customers to quickly and cost-effectively design best-of-breed external storage solutions based on their specific business needs. These storage solutions can range from Just a Bunch of Disks (JBODs) up through fabric-attached, highly available solutions containing a powerful suite of advanced storage software.

A Commitment to Customer Needs

Breece Hill's (Louisville, CO) transformation came largely through the efforts of Phil Pascarelli, whose efforts rank him with top-tier turn-around artists on the order of StorageTek's Patrick Martin and Xiotech's Ken Hendrickson. Pascarelli was on the board of Maxoptix Corporation, and was a principal architect of the merger of Breece Hill and Maxoptix, around 2000.

Negotiations had been in progress between Breece Hill and Norway-based Tandberg Data, but the merger plans fell through. Pascarelli, then based in New York, saw the opportunity to connect Breece Hill with Maxoptix--and, perhaps, make both companies one whole.

At that time, both businesses were experiencing adverse conditions. Breece Hill was struggling to compete in the tape automation space, and Maxoptix offered magneto-optic storage hardware. Both companies were involved in producing point products. The merged entity was consolidated in Colorado and management was focused on the Breece Hill CEO.

But the merger was not going smoothly. Duplicated executive staffs and what seemed to be a clash of egos and operating philosophies kept the two entities at odds. Pascarelli was determined to come out from New York to the company's Colorado headquarters and take things in hand.

"First, I thought I'd be back in New York in three months because I thought the problems weren't big. Then, I thought I'd be back in New York in three months, after I saw how bad things were," Pascarelli recalls. He wondered if the situation could be salvaged--both for the merged entities and the shareholders who had invested.

What gave Pascarelli hope that the situation could be saved was "the commitment, integrity and work ethic" of many of the employees he met there, including the COO, Bob Schaefer. There was a commitment, too, on Pascarelli's part, which was his obligation to the investors and stakeholders that went in on the new entity.

Changes were severe: The executive staff was reorganized from the board, to the CEO, to other staff. Business 101-level controls, including a new financial model, were instituted. An inefficient offshore manufacturing setup had to be corrected. He leveraged the strengths of an indirect channel model--most recently culminating a distribution agreement with Access Distribution (formerly GE Access). Headquartered in Westminster, Colorado, Access Distribution is a value-added technical distributor of complex computer products, solutions and services. It is also Sun Microsystems' largest distributor.

Most importantly, perhaps, a different vision had to be inculcated. The first element of the vision was radical at the turn of the millennium. It was the consolidation of two different storage technologies in a single rack-mount configuration. Consolidation a product with both disk and tape elements was more or less unheard of at that time, but formed the foundation of the iStoRA product line.

The other ingredient of what Pascarelli calls the "recipe" was based on an observation that Pascarelli had coming into the storage industry: the vendors were too far removed from what the customer really needed. "The users bought what the channel offered and the channel offered what the vendors sold." Remember that Pascarelli had come into the industry not being able to articulate the difference between 8mm tape and serpentine tape formats, but he says: "I wasn't embarrassed, like some veterans of the industry might have been, to ask really basic questions."

"I saw an opportunity ... in the mistake that the whole storage industry was making," Pascarelli explains. The integrated solution model, hardly stirring in the year 2000, was a complete departure from the point product model that both Breece Hill and Maxoptix had historically espoused.

The new Breece Hill commitment was to solutions that really responded to customer needs. Consultants like Fred Moore, Jon William Toigo, Dave Perry, Lew Frauenfelder, Nexsan's Diamond Lauffin and others brought valuable insights into those needs for Breece Hill, a company that knew that they could not offer 4U products in a 2U environment.

The other important element of the integrated, consolidated product vision was bundling the right software. After reviewing what Pascarelli calls "the usual suspects," Breece Hill acquired Avail Solutions (Escondido, CA). In the Avail executives Mark Armstrong and Randy Thorburn, Pascarelli found a passion that accented his own ironclad dedication and vision.

Avail Solutions' flagship product, INTEGRITY, has unique file-level backup, migration, replication and archive capabilities--until now, found only in enterprise-class environments and mainframe data centers. The INTEGRITY software, with total data management for Windows, Macintosh, SUN and Linux, delivers on the business value proposition of data lifecycle management today. Its unique ability to scale in both capacity and performance enables it to deliver immediate value to its users.

"The IT community has been bombarded with an assortment of ambiguous acronyms referring to the management of data, which generates confusion among both the channel and end user. This is the result of vendors trying to create a perception of differentiation when none exists. Breece Hill's acquisition of Avail Solutions gives them a strong competitive advantage in the D2D2T and ILM space," says nationally known consultant Jon William Toigo. "Today, INTEGRITY unites the iStoRA's disk and tape components with a policy driven, file-level storage management engine and a strong data protection front end. With this acquisition, Breece Hill sets the bar very high for competitors in this space."

It's All Vision

The common thread that runs through these turn-around tales is the issue of vision. It is all too easy to look at a corporate mission statement and consider it nothing more than marketing hype. But vision in the mass storage industry is more than just a warm, fuzzy philosophy statement--it really is a foundational statement of practical business goals. Without the vision, a company will sail onto the rocks ... and probably sink.

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Mark Ferelli -- Editor-In-Chief