StorageTek: It's Come Back, Now Where is It Going?

Today, StorageTek has put itself back on track financially and is preparing to become a total storage player with an expanded professional services, extending its reach into storage networking and providing both storage hardware and management software. As a $2 billion company, Fortune magazine recently votede StorageTek the number one most admired company.

No doubt, it has made an admirable comeback.

"We had a lot of debt and we dabbled in businesses that we should not have," said Gary. D. Francis, corporate vice president and general manager for the automated tape solutions group at StorageTek. "Now, we have $500 million in cash and now have one of the strongest balance sheets out there. We have a very healthy business."

Speaking at a Breakaway XChange press conference held at the Marriott in San Diego, Francis said the company this year will spend about $225 million in research and development. He also announced that StorageTek planned to unveil about 18 enhanced and new products and services over the next three to six months.

Without releasing details, Francis said the company plans to release a unique data protection appliance for the low-end Unix market in the near future. But, Francis said, StorageTek recognizes it can't be all things to everyone--so it will put a lot of focus on building strong partnerships.

For example, EDS has long been a customer of StorageTek's, but recently the company strengthened its relationship with EDS to share each other's expertise. Other partnerships will include Sun Microsystems, Dell Computer, Hitachi, IBM and NEC--to name a few.

"We can't do it all, so we will partner with the best," Francis said.

This is all part of the effort to be known as more than just a tape company, executives said. As a result, more attention will be put on professional services because customers are looking for more than just the hardware to fix problems. They want products that will help them fix specific problems--which many times involve applications--or attack certain issues like cost efficiency. StorageTek wants to be able to provide offline, online and nearline storage to solve customer problems.

"The average CEO does not wake up and say, 'Gee, I have to buy a tape drive.' He wakes up and says, 'I probably do not have adequate disaster recovery,'" said George Karabatsos, vice president of VAD/VAR channel sales at StorageTek.