Dot Hill Completes Acquisition of Cloverleaf

Dot Hill Systems Corp. announced that on January 26, 2010 it closed the previously announced acquisition of Cloverleaf Communications, Inc., a privately held software company and an emerging leader in advanced heterogeneous storage virtualization and unified storage technologies. The acquisition is expected to significantly broaden Dot Hill’s market opportunity and accelerate Dot Hill’s transition from a provider of storage arrays in the direction of storage software and solutions.

Cloverleaf was formed in 2001 when it acquired its core product technology from Elta Systems / Israel Aerospace Industries (IAI), a multi-discipline systems research and development company. Cloverleaf’s advanced virtualization and unified storage software products, the result of hundreds of man-years of development, have been deployed for several years by a wide range of end users. Customers include financial, legal and entertainment media companies as well as government agencies who require scalable performance and fully featured storage resource management for medium to large scale storage deployments. Cloverleaf’s intelligent Storage Network (iSN) software products are designed to work heterogeneously across all vendors’ storage arrays and support a common suite of advanced data management services. The iSN products provide significantly improved returns on investment for end users by consolidating data and disaster recovery management under a single pane user interface regardless of storage type or vendor.

"Today marks a major milestone in our evolution towards storage software with incremental opportunities in adjacent and emerging markets such as cloud based storage and storage virtualization," said Dana Kammersgard, president and chief executive officer of Dot Hill. "We expect this acquisition will assist Dot Hill in expanding beyond the storage array market and establishing itself as a technology leader in the higher margin storage software market with advanced data management technologies designed to specifically address the complex, heterogeneous requirements of most end user environments in a unified manner. We will be building on this technological base, with the goal of introducing innovative solutions to address current and emerging customer challenges."

"Storage that is heterogeneous, virtualized and unified is not only a general industry direction, but is a defacto and crucial component for viable cloud computing and virtualized server networks," said Mark Peters, senior analyst, Enterprise Strategy Group. "Users implementing next generation storage networks will certainly benefit from increasingly powerful tools that are both easy-to-use and integrated into the network to support their evolving data storage needs."

"We expect this combination will facilitate revenue and margin expansion beginning in 2011," said Hanif Jamal, Senior Vice President and Chief Financial Officer of Dot Hill Systems. "Adding this new technology represents a key step in the transformation of our business to a more software-centric financial model as we seek to extend Dot Hill’s products and solutions into higher value add areas within the storage markets we serve. Dot Hill’s strong balance sheet and improving financial results have enabled us to make this important acquisition to accelerate the next phase of our corporate transformation."