History 2003: Auspex, First Into NAS

The undisputed inventor of NAS technology, fifteen years ago already (!), Auspex Systems, retaining only 27 of the hundred or so employees that remained, has closed its doors, filing for Chapter XI liquidation as it was delisted from Nasdaq.

The firm will seek a buyer for its remaining assets, the IP, with no guarantees of finding one, and even if it’s successful, the price will no doubt be low.

For several quarters now, Auspex has been in danger of going under, posting net losses greater than its revenues for the past 2 and a half years, to the point where we wondered how it continued to run its business.

The last six months ended in December 2002 were particularly disastrous, with sales of only $11 million for losses of $14 million.

The Santa Clara, CA-based company was founded in December 1987 by Larry Boucher, who was also responsible for starting Adaptec in 1981, known in the industry as “Mr. SCSI” and now head of start-up Alacritech.

The firm raised $34 million before going public with an IPO on May 19, 1993, which brought in another $60 million.

Several CEOs succeeded Boucher, including Michael Malcolm, Bruce More, and most recently, Gari Sbona.

Auspex was the first company to imagine what it called at the time a “file server,” now more familiar to most as NAS, a concept that delighted more than a few storage companies, with the notable exception, in the end, of Auspex.

Its first file server was an NFS processor based on Sun OS and SPARC. The company switched to Intel technology in mid-90’s.

It stayed with the high-end NAS market, and is responsible for some 2,500 systems installed WW.

At the same time, it has not exactly won any awards for its sales and marketing strategies, selling first directly, then going through distribution channels with partners such as Bell Microproducts, Distrilogie and above all recently Japanese firm Nissho Electronics, through which 16% of total sales were filtered for FY01, with another 11% for FY02.

The company never managed to sign on a major OEM, however.

What’s more, it plunged wholeheartedly, with a solution it called Web Attached Storage, into the dot.com sector during the brief and glorious time of the bubble, until the latter burst.

More recently, the company had released a SAN-to-NAS gateway.

More than anything, however, the company saw the arrival of a competitor that it couldn’t manage to shake, much less better: NetApp, launched in 1992 by 2 of its former employees, Dave Hitz and James Lau, still at NetApp to this day, as EVP engineering and chief strategy officer, respectively. Over time, as NetApp grew in power and market, Auspex shrunk.

In 15 years, Auspex attained total sales of $1.17 billion, a figure NetApp came close to achieving in a single fiscal year (2001), while Auspex also managed to pile up losses over the same period of $203 million (see chart below).

This article is an abstract of news published on issue 184 on May 2003 from the former paper version of Computer Data Storage Newsletter.