End of the road for StorageNetworks
End of the road for StorageNetworks
StorageNetworks is set to go into liquidation after moves by its board of directors to find a suitable buyer for the storage service provider (SSP) proved unsuccessful. All but a few of the company's staff have been laid off, with a handful having been retained to oversee the winding down of the business.
President and CEO, Paul Flanagan also announced that he is leaving the company immediately, but plans to remain on the Board of Directors through the liquidation period.
"With our investment bankers, the Board of Directors evaluated opportunities to sell the company or to acquire other companies or technologies, explored the viability of StorageNetworks continuing on its path as an independent software vendor building products for the storage resource management space, and assessed the liquidation value of the company."
In addition to its efforts to find a buyer, the company also worked extensively with another investment bank exploring opportunities to acquire technology or companies with technology. "We evaluated a number of opportunities," stated Flanagan. “In each case we determined, based on valuation, the state and maturity of the technology and market, and the funding required to support the technology or company, the opportunity was not one that we felt was the right investment for StorageNetworks and its shareholders."
The company also evaluated the opportunity to continue as an independent software vendor in the storage resource management (SRM) space, but came to the conclusion that the expensive start-up and ongoing costs, coupled with a crowded field of competitors, meant that getting a meaningful return on such an investment would be highly uncertain and could take years.
Flanagan admitted that although the decision to close was a tough one to make, after failing to identify an alternative, he felt sure it was the correct move.
I have been with StorageNetworks from just about the beginning, when the original business plan was just that - a plan. After the years of hard work and determination put forth by every employee of StorageNetworks, it is very difficult to stop fighting. However, after having evaluated all the alternatives, I am very confident that we are doing the right thing to maximise the value to our shareholders at the optimal time.
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