Quantum Acquires Pancetera for $12 Million

Quantum Corp. has acquired Pancetera Software Inc., a privately-held company that has reduced the complexity and cost of managing and protecting data in virtual server environments.

The $12 million transaction consisted of $8.4 million in cash and $3.6 million in Quantum common stock (approximately 1.2 million shares), and is expected to be accretive to operating profit by the end of the current fiscal year.

The acquisition extends Quantum’s technology by adding assets for enhancing data management in virtual environments. Pancetera technology is already compatible with Quantum’s DXi disk backup and deduplication products, and the company plans to further integrate the technology into its longer-term roadmaps for both DXi and its StorNext file sharing and archive offerings.

"The Pancetera acquisition reflects Quantum’s continued focus on expanding our storage systems portfolio to provide greater value to existing customers and also reach a broader customer base," said Jon Gacek, CEO of Quantum. "Together with our DXi deduplication and replication appliances, Pancetera’s technology allows Quantum to offer higher performance, easier-to-use, and more cost-effective solutions for managing and protecting data in virtual environments. We also are excited about the addition of a very talented Pancetera team, which will help us accelerate our development of new and unique DXi and StorNext solutions for meeting customers’ evolving needs in these environments."

Data Storage Challenges in Virtual Environments
Server virtualization provides economic and flexibility benefits to customers, which is why it is an IT spending priority. However, virtualization has created challenges in data storage, across both primary storage and backup (four out of five IT managers reported difficulties backing up virtualized environments in a survey Quantum conducted last year). Virtual machines (VMs) contain large amounts of redundant data, and most backup applications store this data many times over, consuming storage and server resources, extending backup windows and consuming network bandwidth. In addition, virtual server environments tend to be 24×7 operations, so allocating time and resources for backup and recovery is an administrative challenge. Finally, IT departments struggle to find simple, cost-effective solutions for protecting remote sites and delivering disaster recovery across locations.

Meeting These Challenges with Pancetera Technology
and Quantum DXi Appliances
The combination of Pancetera’s technology and Quantum’s DXi appliances addresses the data storage challenges in virtual environments, enabling customers to protect data through either their existing datacenter backup applications or the deployment of solutions for remote sites or small offices:

• Managing redundant data – Together, Pancetera virtual appliance technology and DXi deduplication find redundant data within VMs, reducing the amount of storage and network resources required for local and remote backup.
• Allocating time for backup and recovery – Pancetera’s technology adds intelligence about the VM files and presents a simple file system view of the customer’s virtual environment, enabling backup to occur during office hours and minimizing the proliferation of backup agents throughout the virtual infrastructure. The technology also further simplifies the recovery process, both for single files and for complete disaster recovery.
• Protecting remote sites – Quantum will deliver solutions that combine the power of Pancetera technology and DXi deduplication and replication. Customers will be able to deploy turnkey solutions at remote sites and replicate to datacenters or other central locations.

Other Acquisition Benefits:
StorNext Integration and Additional Team Expertise
While virtualization has been broadly adopted for simpler, lower performance application servers, customers struggle to leverage virtualization beyond this because of a gap in available solutions that provide cost-effective, efficient storage to serve more demanding or complex applications. Beyond backup, the performance and scalability capabilities of StorNext combined with Pancetera’s file intelligence will allow Quantum to create a family of storage products that deliver value to customers deploying virtualization across their applications.

The acquisition also adds virtualization and storage management expertise to Quantum. Nearly all the Pancetera employees have joined the company, including co-founders Mitch Haile (CTO and VP, Product Management) and Greg Wade (VP, Engineering), as well as CEO Henrik Rosendahl. These three senior leaders also have broad industry experience, having previously served at companies including VMware, Data Domain and Legato Systems.

Acquisition Expected
to Contribute to Revenue and Profit
The acquisition of Pancetera supports Quantum’s goal of driving increased total revenue, and the company expects it to contribute to fiscal 2012 revenue growth by broadening the company’s DXi solution set. The transaction is anticipated to increase Quantum’s quarterly non-GAAP expenses by approximately $1 million, primarily in research and development. By the end of fiscal 2012, the company expects the acquisition to be accretive to operating profit.