Dot Hill Expands Agreement With HP
From one to five years
This is a Press Release edited by StorageNewsletter.com on January 9, 2008 at 4:19 pmDot Hill
Systems Corp. announced that it has amended its agreement with
HP. Under the amended agreement, Dot Hill will provide private-label
RAID storage arrays to HP. The amendment expands the original agreement
that covered RAID storage arrays for the HP StorageWorks 9000 Virtual
Library System, which was introduced in November 2007. The amendment
extends the original agreement from one year to five years. Dot Hill
believes that the amendment materially increases the scope and
potential of its relationship with HP.
The
extended agreement is expected to allow HP to broaden and further
enhance its entry-level storage portfolio for a variety of application
environments.
Dot Hill offers a family of entry-level and midrange disk arrays based on its R/Evolution(TM)
architecture. These modular platforms provide very high- levels of performance, scalability and flexibility.
"Dot
Hill has built a family of leading storage arrays with a flexible,
scalable and differentiated architecture," said Dana Kammersgard,
president and chief executive officer, Dot Hill. "Working with HP has
proven how simple, powerful solutions may create tremendous customer
value. We are excited to be developing our partnership further with
HP."
In connection with the agreement, on January 4, 2008 Dot
Hill issued a five-year warrant to HP to purchase 1,602,489 shares of
Dot Hill’s common stock (approximately 3.5% of Dot Hill’s outstanding
shares prior to the issuance of the warrant) at an exercise price of
$2.40 per share.
The company believes that the extended
agreement has the potential to increase revenue in 2008. Additionally,
the company expects to potentially utilize $10 million to $20 million
in cash over prior projections to support additional finished goods
inventory in HP designated inventory locations and to make modest but
incremental investments in organizational capabilities and test
infrastructure. Depending on revenue, investment levels and program
execution, the extension of the agreement could positively or
negatively affect the company’s targeted return to profitability during
2008.
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