SANGate Case Study

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SANGateCase Study
Hillel Freeman Amir Lapidot Michael Weinberg Moty
Yamin Zvi Topol Oded Ran (OdRP)
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Agenda

• The problem and the solution
• Technology
• Market Analysis
• Customers
• Competitors
• Weaknesses and Threats
• Company Overview
• Conclusions

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Case Study Goals

• Understand the starting-up process
• Investigate and analyze a field unknown to us
• Identify the weaknesses and threats the companys
  facing

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SANGates Mission Statement

• Provide infrastructure for data integration
  between Mainframe and Open Systems storage
  networks

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The Problem
?
?
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The Solution
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Products Strengths

• ESA Hardware/Software solution

• Interoperability between OS and MF

• Vendor-independent compatibility

• Increased performance and scalability

• Infrastructure for further development

• Significant ROI for customers

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Product and Technology

• ESA based upon a patented communication chipset
• Technology is confidential
• Unique knowledgeof MF comm.
• Up to 1 GBps

ESA
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Market Overview

• Storage Market
• Amount of data doubled annually (IDC).
• Divided to MF (70) and Open Systems
• SAN Key players EMC, IBM, Compaq, Sun, HDS.

• Storage Management
• 9 Billion sales in 2001 (of which 80 for
  Mainframe)
• Segmented to software-only and software/hardware
  appliances solutions

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Target Market Analysis

• Large firms using MF computer 4000-5000.Company
  currently aims Fortunes 1000 list.

• S/390 Mainframe units installed 32,000(each
  with 16-256 ESCON ports).

• Average installation per S/390 4 units.

• Potential deployment 128,000 units.

• Average unit price 120,000

• Target market 15,360,000,000
• S/390s distribution is growing at 30-35
  annually.

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Business Model

• 3 main types of customers
• Large Fortunes 1000 Firms
• OEMs BMC, CA
• Resellers MF firms, IBM
• Aims for strategic partnership
• Possible future MA or IPO

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Pricing Model

• The target of the pricing modelEnabling SANGate
  to position itself primarily as a software
  company
• ESA price 80,000-200,000
• Data integration applications
• As a service the price will be based upon a
  certain price per volume moved
• License over 3 to 5 year period for a fixed fee
• Software updates

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Competitors (1)
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Competitors (2)
Major competitors with data integration solutions
for Mainframe and Open System
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Milestones

• 1995-1998 Single entrepreneur
• 1998 Technological breakthrough
• July 1999 First business plan
• Oct. 1999 Second business plan
• Jan. 2000 8M First round (JVP, Battery
  Ventures)
• May 2001 10M Second round
• Sep. 2001 Beta deployment
• Nov. 2001 CEO sent home by courts decision

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Present status

• Two sites
• Even-Yehuda (Israel)
• Southborough (Mass., USA)
• 76 employees
• No CEO!
• Development completed only for Mainframe
• Beta exists, ver 1.0 expected 2002 Q2

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Weaknesses and Threats

• David and Goliath competition against industrys
  gorillas (EMC, IBM, HDS).
• SANs a hype? (EMA survey)
• Company failed to predict technological
  developments FICON case.
• No support for Open Systems today.
• No referable customers.

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Conclusions

• The company has a unique product and selling
  proposition for a large, existing market
  opportunity .
• Business model (direct sell) is risky against the
  markets gorillas Strategic partnership is
  recommended
• Open Systems and FICON support are key features
  that should be developed
• Referable large customers is a must

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Back to Case Study Goals

• Understand the starting-up process
• Investigate and analyze a field unknown to us
• Identify the weaknesses and threats the companys
  facing

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Thank you.
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Technology What is SAN?

• Emerging as the main storage networking protocol.
• Specific network for connecting storage devices,
  allows
• Higher speed data movement and access
• More efficient utilization of storage capacity
• More Increased scalability and flexibility

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