Despite the rumors, NeoScale Systems has not gone out of business — but the maker of encryption appliances has admitted that it is ‘looking for strategic [business] alternatives.’
That was the message given to Computer Business Review yesterday by a senior executive at the company who did not want to be named. The executive would not give any more details, but said that he would be able to provide further information at some future date.
One source said that one of the strategic alternatives that the company is considering is outright acquisition.
NeoScale has hinted before now that it has been disappointed by the limited demand for its bump-in-the-wire encryption appliances, for which the most popular application for the devices is the encryption of backup data on its way to tape libraries.
By March this year, NeoScale was claiming to have won 200 customers. Assuming an average of $100,000 from each customer, that would give NeoScale only $20m revenue in the five years that its products have been on the market.
NeoScale’s only major competitor is Decru, which was bought by Network Appliance in 2005. The last time that NetApp declared Decru’s revenue was for the three months to January 26 this year, during which period Decru pulled in just $10m.
Mainframe and open systems tape drives featuring native data encryption began shipping late last year.