The Four Hundred

BCC Technologies appears to be setting its sights a little broader and a lot higher, if two new and completely different deals announced last week are any indication. BCC, the only other provider of internal iSeries disks besides IBM, announced it has retained Markwood Capital Alliance to drive the next stage of the company's growth into the Unix and Windows markets. The company also announced an OEM deal with Maximum Availability for OS/400 data replication software.

Let's first take a look at the new deal with Markwood, which is the more interesting of the two deals and which will have the bigger effect on the future of the company. Markwood is a Santa Anta, California, based company that describes itself as a finance group that specializes in helping middle market companies with their merger, acquisition, and growth capital needs. Markwood's specialty is grooming small-to-midsize tech companies for acquisition by bigger fish, as is evident on the tombstones section of Markwood's Web site. (Tombstone is a term of art in the venture capital business that refers to the big display ads that are taken out in the major business newspapers when a company goes public. It is not a morbid idea, even if the name is creepy.)

David Breisacher, BCC's chairman and chief executive, said the decision to bring in Markwood was made because BCC is now ready to execute the next stage of its business plan. "What we're going to do is look for a strategic partner out there, whether it be in the iSeries market or outside of it, to infuse a large amount of capital to ramp up sales and marketing," he said.

The plan of Breisacher and his partners at BCC is to take the AS/400 and iSeries disk expertise they've developed and apply that to developing a storage area network or network-attached storage environment for Unix and Windows platforms. Since the BCC engineering team is well versed in the art of building disk drives for the OS/400 platform, any future SAN or NAS product would work with AS/400 and iSeries servers as well, Breisacher says. By delivering such a product, BCC (or whatever may be called in the future) will be one of only three companies with an external network storage system for the platform, in addition to EMC's Symmetrix storage array and IBM's "Shark" Enterprise Storage Server.

Whether the initiative will involve engineering the new networked storage product from scratch or building upon existing designs probably will depend on the type of business deals that Markwood can arrange. If Markwood arranges for BCC to be acquired, BCC's technology might be absorbed into an existing network storage product. If, on the other hand, Markwood finds an investor with deep pockets and no technological expertise, Breisacher and his partners might be inclined to have their engineers design the new product themselves. After all, designing disk drives for a proprietary platform for which there are no published specs was the hard part. Making disk arrays for Unix and Windows boxes, by comparison, is like "taking a test with study notes," the BCC chairman said.

BCC is a private company and does not publicize its financial results. Nonetheless, the company appears to have found success selling its 10K RPM and 15K RPM "Extender" disk drives at a deep discount compared with IBM's internal AS/400 and iSeries disk arrays. The best indicator of BCC's success is, perhaps, the recent unpleasantness between BCC and IBM's Global Services and Server Group units. BCC has accused IBM technicians of bad-mouthing the BCC drives at AS/400 and iSeries shops and steering customers away from buying or continuing with BCC drives. IBM has apparently relented for now, but the two companies remain at odds, despite their peculiar form of "co-opetition."

Is the adversarial relationship with IBM in any way tied to BCC's decision to bring Markwood in to spark the move to find new investors? "No, I don't think so," Breisacher says. "We've always known the more successful we get, the more adversarial the relationship would be. They're playing a lot of catch up [in terms of] performance and reliability."

(As we have reported in the past, BCC has also used, through an OEM relationship it has with IBM Technology Group, the 10K RPM drives that IBM Server Group had so much trouble with last year, as the basis for its own line of drives. Whether BCC's 10K RPM drives are any more reliable than IBM's is a matter of conjecture. However, BCC has legitimate bragging rights when it comes to performance, as it is still the only provider of the faster 15K RPM drives in the OS/400 market for internal disk arrays.)

By breaking out of the OS/400 storage market, which BCC pegs at $1.6 billion per year, the company will become one of many storage vendors vying for a piece of a much bigger market for Unix and Windows storage products, which BCC says is worth $46 billion per year. "It's always been part of the game plan," Breisacher says. "We never wanted to be dependent on one market. From a technology standpoint, we are completely done on the iSeries, which leads you to the logical conclusion that it's time to start expanding to other markets."

BCC's other announcement last week had to do with a new backup and recovery product that BCC will be selling, called CopyFlash. CopyFlash, which is based on Maximum Availability's *noMAX data replication software, will allow OS/400 shops to quickly copy production data from the primary OS/400 server to the backup OS/400 server, from which a tape copy can be made for long-term storage or disaster recovery. By replicating the data to a backup OS/400 server before backing up the data to tape, users can close their backup window and keep their systems online longer. For BCC, which also sells AIT, DLT, and LTO tape drives and subsystems, selling CopyFlash makes sense because it can also bundle its high capacity 15K RPM disks with "FAST" short-stroking technology for customers buying its CopyFlash software. BCC says the FAST technology can give a native 35 GB drive the capacity to hold nearly 100 GB of data, which, the company says, makes it especially cost-effective for companies implementing a disaster recovery system.