Imation: Fiscal 1Q13 Financial Results

Imation Corp. released financial results for the quarter ended March 31, 2013.

The company reported Q1 2013 net revenue of $224.4 million, down 14.8% from Q1 2012, an operating loss of $14.7 million including special charges of $4.2 million, and a diluted loss per share from continuing operations of $0.39. Excluding special charges, Q1 2013 operating loss would have been $10.5 million and diluted loss per share from continuing operations would have been $0.31.

Imation president and CEO Mark Lucas commented: "Imation's strategic transformation continues to center on leveraging our roots in storage to build a platform for long-term growth and profitability. In the first quarter, our storage and security solutions business delivered strong results, led by our recently acquired Nexsan portfolio of products. Additionally, we made good strides in reducing our operating costs and implemented our reorganization into two business units to streamline decision making."

Lucas continued: "Though we are making good progress, we are not yet where we need to be long-term and more work remains."

Business Update
The company announced in February that a process would be run to divest both the Memorex and XtremeMac consumer electronic businesses. That process is moving forward and progress has been made in identifying interested parties. The consumer storage business under the Memorexand TDK Life on Recordbrands will be retained.

Starting January 1, 2013, the company reorganized into two new business segments: Consumer Storage and Accessories (CSA) and Tiered Storage and Security Solutions (TSS). With these two business segments, Imation is becoming a more customer-centric and nimble organization.

Imation's CSA business unit generates solid cash flows for the company. This segment includes consumer storage media, primarily optical and flash, as well as storage and electronic accessories. With the planned consumer electronics divestitures, Imation will be able to refocus on storage at the retail level. For example, the company recently introduced a 3.0 external SSD with ultra-quick data transfer in a portable form under the TDK Life on Record brand. The CSA business unit plans to launch several other new products in the upcoming quarters.

The TSS business unit provides strategic opportunities for revenue growth and margin expansion. TSS includes both Imation and Nexsan branded tiered and scalable storage solutions, IronKeybranded mobile security solutions and commercial storage media. During the quarter, gross margins in the TSS segment increased to 22% compared to 19.4% in the prior-year period.

Imation's Nexsan products have strong momentum and posted double-digit growth. The mobile security platform gained a significant win with the Japanese government by landing a contract for Imation's portable workspace PC on a Stickproduct IronKey Workspace 300, which is Microsoft - Certified for Windows to Go. Additionally, Imation launched several other new IronKey flash drives. These storage and security solutions categories delivered gross margins well in excess of 40%. Commercial storage media declined 22.4%, as expected, driven by magnetic tape.

Lucas concluded: "In the first quarter, our businesses performed as we expected across all major geographies and product categories. Going forward we are continuing to work on introducing differentiated products, building gross margins, improving our cost structure and supporting our two business units. We are committed to achieving growth and profitability, and becoming a key player in storage and security worldwide."

Detailed Q1 2013 Analysis
As a result of the planned consumer electronics divestitures, the financial results for those operations are now presented as discontinued operations. The following financial results are presented for continuing operations for the current and prior periods unless otherwise indicated.

Net revenue for Q1 2013 was $224.4 million, down 14.8% from Q1 2012. From a segment perspective, TSS grew 1.4% and CSA declined 24.9%. Foreign currency exchange negatively impacted total Q1 2013 revenues by 2.5%.

Gross margin for Q1 2013 was 18.8%, down from 20.4% in Q1 2012. Gross margin in Q1 2013 was 19.7% excluding inventory write offs of $2.1 million, which were part of the company's restructuring program, compared to 20.4% on the same basis in 2012. TSS gross margin for Q1 2013 was 22.0% up from 19.4% in Q1 2012. CSA gross margin was 17.7% down from 21.0% in Q1 2012 (See Table Five for non-GAAP measures).

Selling, general and administrative (SG&A) expenses in Q1 2013 were $49.3 million, down $3.0 million compared with Q1 2012 expenses of $52.3 million. The reduction of 5.7% was driven by our cost reduction efforts and prior intangible write-offs, which reduced these costs by approximately 18%, partially offset by the Nexsan operating expenses added as a result of the acquisition.

R&D expenses in Q1 2013 were $5.4 million, down $0.2 million compared with Q1 2012 expenses of $5.6 million.

Special charges were $4.2 million in Q1 2013 compared with Q1 2012 charges of $1.3 million.

Operating loss was $14.7 million in Q1 2013 compared with an operating loss of $5.6 million in Q1 2012. Excluding the impact of special charges described above, adjusted operating loss would have been $10.5 million in Q1 2013 compared with adjusted operating loss on the same basis of $4.3 million in Q1 2012.

Income tax provision was $0.4 million in Q1 2013 compared with income tax provision of $1.3 million in Q1 2012. The company maintains a valuation allowance related to its U.S. deferred tax assets and, therefore, no tax provision or benefit was recorded related to its U.S. results in either period.

Discontinued operations was an after tax loss of $5.5 million in Q1 2013 compared with a $3.0 million loss in Q1 2012. Discontinued operations represent the direct results of the XtremeMac and Memorex consumer electronics businesses and included $1.1 million of restructuring charges in Q1 2013.

Loss per diluted share from continuing operations was $0.39 in Q1 2013 compared with $0.25 in Q1 2012. Excluding the impact of special charges described above, adjusted loss per diluted share would have been $0.31 in Q1 2013 compared with $0.21 in Q1 2012 (See Table Five for non-GAAP measures).

Cash and cash equivalents balance was $98.2 million as of March 31, 2013, down $10.5 million during the quarter, driven primarily by anticipated changes in working capital and payments for restructuring.

Overland Assigned Patent - Data protection systems with multiple site replication

Overland Storage, Inc., San Diego, CA, as been assigned a patent (8,386,705) developed by four co-inventors for a "data protection systems with multiple site replication."

The co-inventors are Dennis Desimone, Michael H. Reider, Escondido, CA, Kenneth Geist, San Diego, and Victoria Gonzalez, Escondido, CA.
 
The abstract of the patent published by the U.S. Patent and Trademark Office states: "Systems and methods for replicating data from a first site to a second site remote from said first site are described. An embodiment includes storing compressed data on a HDD appliance, reading said data without decompressing said data, sending said data over a wide-area-network (WAN) in a compressed state, and storing said data on a second HDD appliance remote from said first HDD appliance in its compressed state without performing an additional compression operation."

LTO Program Announces LTFS Compliance Verification Testing

Test costs $10,000.

The Linear Tape-Open Program Technology provider companies, HP, IBM Corp. and Quantum Corp., will offer LTFS compliance testing to demonstrate compatibility with the open standard LTFS specification.

Tapes for the initial review cycle can be submitted to the LTO Program for testing starting May 1 through June 30, 2013. This process is intended to verify that an organization's offering produces an LTFS formatted LTO cartridge that complies with the LTFS format specification.

"Before capitalizing on LTO tape capacity and search capability innovations, clients must have confidence that the technology will integrate easily within heterogenous data center architectures," said Chris Powers, director, StoreEver solutions, HP. "By providing compatibility among mixed vendor platforms, LTO technology is gaining rapid marketplace acceptance among organizations that require simplified management and functionality without sacrificing long-term file retention benefits."

LTFS has expanded the role of LTO tape into new categories and applications where customers want the long-term retention benefits of tape but still need to easily find and use files. Companies with these needs are turning to LTO tape with LTFS to offload their digital media from more expensive storage options for archiving and transport.

Leath Mattner, data management for Digital Pictures, leveraged LTFS and LTO-5 tape solutions in the production of James Cameron's Deepsea Challenge project. According to Mattner, the LTO workflow system they used allowed them to "handle all of the camera formats and conform all of the different kinds of media directly from LTO tape which was a huge time saver."

Mark Peters, senior analyst with Enterprise Strategy Group, acknowledges that although capacity, performance and cost containment are dominating the headlines in storage, two other aspects are also crucial: providing consistency and being standards-based.

"These areas are precisely why the LTFS compliance testing from the LTO program matters," says Peters. "When users have multiple choices of interoperable solutions, they want to be sure that everything will work as designed. This new compliance testing adds certainty, and will of course help attract users who are thinking of committing to LTO and LTFS."

This LTFS compliance testing will be managed by the LTO Program.

LTFS takes advantage of the new partitioning feature that became available with LTO-5 technology to provide file system access to tape data and easier management such as drag and drop and search functionality. The LTFS specification is an open standard and has been provided to the SNIA for adoption.

WW Backup Appliance Market Revenue Grew 10% Y/Y in 4Q12, Capacity 43% - IDC

EMC easy leader in front of Symantec an IBM

Worldwide purpose-built backup appliance (PBBA) factory revenues posted a 9.7% year-over-year increase, totaling $859.5 million in 4Q12, according to the IDC Worldwide Quarterly Purpose-Built Backup Appliance Tracker.

However, the total PBBA open systems market posted just under $567.5 million in revenues, representing 16.4% growth from the prior year's fourth quarter.

The total worldwide PBBA capacity shipped reach 455,254 terabytes, growing 42.9% year over year.

"The total worldwide PBBA market resumed robust growth in the fourth quarter of 2012. Overall, the worldwide PBBA market experienced strong growth in revenue, capacity, and shipments," said Robert Amatruda, research director, data protection and recovery, IDC. "Long-term, we expect the worldwide PBBA will continue to outpace the overall data protection and recovery software and hardware market as customers continue to embrace turnkey systems to alleviate their backup and recovery challenges."

Total Worldwide PBBA 4Q12 Results
EMC maintained its lead in the overall PBBA market with 66.5% revenue share in the fourth quarter, followed by Symantec and IBM and with 11.8% and 8.4% market share, respectively. Symantec exhibited strong year-over-year growth in the PBBA market in the fourth quarter of 2012 while HP and IBM saw their revenues decline.

Taxonomy Notes:
IDC defines a purpose-built backup appliance (PBBA) as a standalone disk-based solution that utilizes software, disk arrays, server engine(s), or nodes that are used for a target for backup data and specifically data coming from a backup application (e.g., NetWorker, NetBackup, TSM, and Backup Exec) or can be tightly integrated with the backup software to catalog, index, schedule, and perform data movement. The PBBA products are deployed in standalone configurations or as gateways. PBBA solutions deployed in a gateway configuration connect to and store backup data on general-purpose storage. Here, the gateway device is serving as the component that is purpose built solely for backup and not for supporting any other workload or application. Regardless of packaging (as an appliance or gateway), PBBAs can have multiple interfaces or protocols. Also, PBBAs often can provide and receive replication to or from remote sites and a secondary PBBA for the purpose of DR.

Quantum: Fiscal 3Q13 Financial Results

Revenue up Q/Q and down Y/Y by 8%, rebound in tape automation

Quantum Corp. reported results for the third quarter of fiscal 2013 (FQ3'13), ended Dec. 31, 2012.
Revenue for the quarter totaled $159 million, down 8% from the third quarter of fiscal 2012 (FQ3'12), primarily due to expected declines in OEM and branded tape automation revenue. However, total revenue was up $12 million, or 8%, over the prior quarter.
 
Quantum reported revenue of $41 million from disk system and software sales (including related service), a 13% increase over FQ3'12 due to record revenue from DXi disk system sales. The company also grew tape automation revenue by 25% over the prior quarter, as both midrange and enterprise sales rebounded strongly.

Quantum reported a GAAP net loss of $8 million, or 4 cents per share, for FQ3'13, compared to GAAP net income of $4 million in the same quarter of last year. On a non-GAAP basis, the company had net income of $5 million, or 2 cents per share, down from net income of $12 million a year earlier. The year-over-year declines were largely driven by the lower overall revenue. Compared to the prior quarter's results, the GAAP net loss in FQ3'13 was $4 million smaller, and the non-GAAP net income was $10 million higher.

"We improved our financial performance in the December quarter, growing revenue sequentially, driving better-than-expected non-GAAP profits and generating cash," said Jon Gacek, president and CEO of Quantum. "We also had another quarter of record DXi deduplication sales, which contributed to the 14% year-over-year increase in combined DXi and StorNext revenue we've achieved over the first three quarters of the fiscal year.

"In addition, even as we scaled back spending, we continued to invest in new, industry-leading products and solutions for protecting and managing digital content in physical, virtual, cloud and big data environments. These include our Lattus wide area storage systems, vmPRO 3.0 virtual backup software, DXi6800 deduplication appliances and Scalar i6000 HD enterprise tape libraries."
Quantum generated $6 million in cash from operating activities in FQ3'13 and ended the quarter with $55 million in cash and cash equivalents.

For 4Q2013, Quantum expects:

• Revenue of approximately $145 million to $150 million, reflecting typical seasonality, with higher sequential disk systems and software revenue.
• GAAP gross margin rate of approximately 41% and non-GAAP gross margin rate of 42%.
• GAAP operating expenses of $66 million to $68 million and non-GAAP operating expenses of $61 million to $63 million.
• Interest expense of $2.5 million and taxes of $500,000.

Business highlights for the December quarter
include the following:

• Quantum introduced a new family of wide area storage solutions, named Lattus, which provides globally distributed disk-based archives that are extremely scalable and cost-effective and allows storage of data forever on disk without interruption or migration. Integrating dispersed next-generation object storage and Quantum file system technologies, the Lattus family offers a new approach to archiving that overcomes the limitations and inefficiencies posed by traditional disk architectures in multi-petabyte storage environments. The first Lattus product, Lattus-X, began shipping in December.
• The company integrated its Q-Cloud backup and disaster recovery services with Symantec OpenStorage (OST) technology, providing NetBackup and Backup Exec customers with multiple options for leveraging Q-Cloud's services. Q-Cloud now directly supports NetBackup and Backup Exec software, enabling both backup applications to stay completely aware of all copies of data backed up to a Q-Cloud DXi appliance.
• Quantum began offering full-featured, free downloads of its vmPRO virtual machine backup software and DXi V1000 virtual deduplication appliance, providing a risk-free way to explore their superior features and value. The vmPRO Standard Edition software protects up to 1TB of virtual data and can be upgraded to vmPRO Enterprise Edition for additional capacity, making it easy for customers to adopt Quantum vmPRO and scale it to meet their growth requirements. The DXi V1000 stores up to 15TB of deduplicated data and works with vmPRO software to offer a 100% virtual data protection solution as well as a path to the cloud.
• LTO-6 technology started shipping in Quantum's Scalar i6000 and i500 tape libraries, as well as in its autoloaders, drives and media. LTO-6 nearly doubles capacity and increases transfer rates by up to 43% over LTO-5 technology, further enhancing the role of tape as an integral component of a broader tiered storage strategy.
• Quantum products continued to garner industry honors, as the DXi V1000 was named Virtualisation Product of the Year at the 2012 Storage, Virtualisation and Cloud Computing (SVC) Awards, and Quantum's StorNext data management software was recognized as runner-up in the Storage Software Appliance category. In addition, earlier this month, Storage magazine announced that the DXi V1000 is a finalist for its 2012 Product of the Year awards, and Network Computing selected the DXi6701/02 midrange deduplication appliance as a Product of the Year finalist for its upcoming awards.

HDD WW Revenue to Drop by 12% This Year - IHS iSuppli

Facing a relentless onslaught from tablets, smartphones and SSD, global HDD market revenue in 2013 will decline by about 12% this year, according to an IHS iSuppli Storage Space market brief from information and analytics provider IHS Inc.
Revenue is set to drop to an estimated $32.7 billion in 2013, down 11.8% from $37.1 billion last year. HDD revenue will be flat the following year, amounting to $32.0 billion in 2014.

"The HDD industry will face myriad challenges in 2013," said Fang Zhang, analyst for storage systems at IHS. "Shipments for desktop PCs will slip this year, while notebook sales are under pressure as consumers continue to favor smartphones and tablets. The declining price of SSDs also will allow them to take away some share from conventional HDDs."
HDD gross and operating margins likewise will decline as a result of continued price erosion.
"However, HDDs will continue to be the dominant form of storage this year, especially as demand for ultrabooks picks up and hard drives remain essential in business computing," Zhang added.
 
HDD vs. SSD
HDDs overall will maintain market dominance because of their cost advantage over SSDs, particularly when higher densities are involved and dollars per gigabyte are calculated. HDD costs and pricing are significantly lower than SSDs, with already falling HDD average selling prices expected to decline further this year by 7%.
 
Moreover, HDDs will continue to be part of storage solutions even in ultrabookss that make use of an SSD component. The solution, which cobbles HDDs together with a so-called cache SSD module, boasts of a superior price-value proposition compared to SSD-only counterparts.
A major growth area for HDDs will be the use of HDDs in the business sector spanning the enterprise space, cloud storage, big data and big-data analytics. Bearing the lowest cost of any storage medium now on the market, HDDs will remain the final destination for the majority of digital content that need to be filed away. And toward the last quarter of this year, Western Digital is expected to launch a 5TB helium HDD, catering mostly to data centers for enterprise servers and storage applications, further propelling the HDD space into overdrive.
 
Western Digital vs. Seagate
Western Digital is expected to continue battling archrival Seagate Technology for market leadership in both revenue and shipments, especially in the enterprise business segment. While Seagate had a 50% share of the enterprise market last year, the introduction by Western Digital of its new helium technology could catapult the manufacturer to the top at the end of 2013, dethroning Seagate in the process.
 
Optical drives vs. extinction
In the parallel market for PC optical disk drives - home to discs like CDs and DVDs - losses in both revenue and shipments are similarly expected. The declines stem from a number of reasons, including smaller chassis sizes for PCs, a shift in preference among consumers toward video streaming instead of using physical discs, and cost cutting from PC manufacturers that have lost interest in using optical drives.
In what appears to be a grim scenario, the optical disk drive industry is expected to encounter continued challenges this year, such as those presented by thinner PC designs. Optical drives could eventually be abandoned by PC makers altogether.

Qualstar: Fiscal 2Q13 Financial Results - Storage Revenues up 35%

Qualstar Corporation reported financial results for its second fiscal quarter ended December 31, 2012 as its transformation continues under new leadership.
Fiscal 2013 Second Quarter Financial Results
Bookings for the second fiscal quarter were $4.9 million representing 39% sequential growth over the fiscal first quarter and a book to bill of 1.46:1.
The company closed the quarter with $2.9 million in backlog with the majority to be delivered in the third fiscal quarter.
Revenues for the second quarter of fiscal 2013 were $3.4 million, compared to $3.6 million for the same quarter of fiscal 2012, a decrease of $200,000 or 5.6%, and sequentially flat to the fiscal first quarter.
GAAP net loss including restructuring charges of $511,000 or $0.04 per share was $1.7 million or $0.14 per basic and diluted share. Excluding the adjustment in labor and overhead, pro forma non-GAAP net loss was $970,000 or $0.08 per share. This compares to GAAP net loss of $971,000, or $0.08 per basic and diluted share for the second quarter of fiscal 2012.
"Our fiscal second quarter represented a turning point for Qualstar as we implemented our most important and significant steps to transition from a manufacturing-based company to a more nimble, lower overhead company focused on engineering and sales," said Larry Firestone, president and CEO. "We booked business at a rate of just under $20 million annually in the second quarter and began the third quarter with very strong backlog. Combined with the work we have done to improve gross margins and lower inventories, we believe our strategy to focus Qualstar on our core markets of storage and power supply products will result in long-term growth, sustainable profitability and increasing returns for investors."
Strategic Plan Implementation
Since last June, under Firestone's leadership, Qualstar's management has taken swift and decisive action to transform Qualstar and create sustainable value for all shareholders, including:
Initiated five-year strategic plan
Restructuring the company for greater efficiency

• Outsourced library manufacturing to CTS: Decreasing inventory and expanding gross margins
• Exited and consolidated certain facilities: Exited Canoga Park; Shrunk Boulder; Exiting the Simi valley location and moving to smaller more suitable quarters
• Reduced workforce: Exited legacy product lines and old drive technologies
• Renegotiated service contract

Fully integrated N2Power into Qualstar

• Reorganized into two engineering team
• Re-engaging resellers
• Initiated discussions with first tier 1 channel partner

Strengthened management team
and sales and engineering staff

• Bill Lurie, VP of engineering
• Steve Wagner, VP of sales for N2Power
• James Steger, Operations leadership

Delivered bookings in the annual range of $20 million
for the second quarter; above our breakeven point

Added two experienced board members

• Allen Alley
• Daniel Molhoek

Introduced new products and technology
to expand addressable market potential

• Availability of LTO-6
• Encryption Key Management for XLS
• Expandable Rack Mount Tape Libraries

Exited legacy products and technologies

• TLS and RLS 8000 - Selling below cost
• Touchless Mouse and Touchless Pointing

Atto Introducing 16Gb FC-to-SAS RAID Controller

ATTO Technology, Inc. has launched a 16Gb FC-to-SAS RAID controller. 

These controllers provide a flexible, scalable and tiered storage system with support for both HDDs and SSDs.

The FastStream 9000 allows users to manage applications on multiple tiers of storage controlled from a single subsystem while providing drive assessment and latency management. Users can now take advantage of the benefits of FC connectivity with drive options including SAS/SATA SSDs for online cache, SAS HDDs for primary storage applications such as transactional databases and SATA drives for secondary applications like disk-to-disk backup.
" ATTO's new FastStream incorporates leading-edge 16Gb FC technology while offering original equipment manufacturers the flexibility of one solution that can support everything from SSDs to tape storage," said Wayne Arvidson, VP of marketing at ATTO. "What sets ATTO apart in the industry is our ability to provide the broadest portfolio of solutions for original equipment manufacturers and system integrators designing state-of-the-art data infrastructures. Leading vendors are shipping the first FastStream 9000-enabled storage subsystems now, and we expect more embedded products to be released in early 2013."

ATTO offers a family of entry-level, midrange, and enterprise-class bridge, RAID and JBOD controller solutions supporting connectivity including 16 and 8Gb/s FC, 6Gb/s SAS/SATA, and 10Gb Thunderbolt. They can be pre-configured to meet OEM specifications and are available in multiple form factors.

FastStream 9000 Storage Controllers
(Model No. FSSC-9000-E00) They are designed to sit between workstations and low-cost JBOD disk storage, providing users pay-as-you-grow scalability without purchasing additional RAID controllers when expansion is needed. They are suited for shared applications in IT and digital media and can be tuned across a spectrum of high IOP or high-bandwidth environments. They are also backwards compatible with 8Gb/s and 4Gb/s FC infrastructures. When coupled with an ATTO FC Host Bus Adapter, Multipath Director technology allows users to directly attach HA storage to Mac OS X, Linux, and Windows 8/7/Vista/XP workstations, eliminating the need for an Ethernet connection through a server.
Also available for the ATTO FastStream is CacheAssure, a technology that safeguards data in the cache in the event of a power loss via battery-less supercapacitor technology. Data is protected for up to 10 years in the event of a system disruption, and is automatically written to disk when the storage system indicates it is operational. It also eliminates the need to monitor and replace batteries, lowering system administration costs.

Iomega Announces StorCenter px12-450r Network Storage Array

• First EMC array with Intel Ivy Bridge processor
• Top of the line performance for today, headroom for tomorrow
• Power for demanding workloads and applications
• Ready for 4TB disk drives and 10GbE networks
• EMC LifeLine software technology with cloud integration

The new StorCenter px12-450r Network Storage Array is designed for advanced functions including dedupe, VDI, database and storage-based applications. Examples of emerging applications include video management systems (VMS) for surveillance and McAfee VirusScan Enterprise running natively on the storage.

The heart of the new StorCenter px12-450r is the new low-power Intel Xeon Processor E3-1200 v2, coupled with 8GB memory. The multicore processor excels at multi-threaded storage workloads like multi-LUN iSCSI and multi-client virtual desktop infrastructure (VDI). The 8GB memory assists those workloads and easily supports memory-intensive tasks like the Avamar source-based deduplicating agent, included with all Iomega StorCenter PX series storage products.

The new StorCenter px12-450r is a ground-up redesign of Iomega’s previous top-of-the-line model, the StorCenter px12-350r. The StorCenter px12-450r is available in diskless and partially populated configurations, enabling users to start small in terms of storage capacity, or provide their own HDDs and grow as workloads and storage capacity dictate. The px12-450r is qualified with a broad range of 1TB, 2TB and 3TB consumer and Server Class Series HDDs, as well as upcoming 4TB HDDs. All product configurations and expansion drives for the px12-450r available from Iomega include Server Class Series ATA drives for the highest reliability.

The new px12-450r also supports solid state drives (SSDs), ideal for large amounts of small block random I/O workloads such as virtualization and database. The px12-450r expands on the px12-350r’s user serviceability with a new mechanical design that makes the processor complex itself user replaceable by removing just two thumbscrews. All product configurations include disk drive trays to simplify capacity expansion – users just add HDDs.

One of the key advantages of adopting leading edge technology like the new Intel Xeon Processor is that the StorCenter px12-450r can handle advanced workloads to increase the lifespan of the network storage array for end users. The multicore processor and 8GB memory are ready for the next generation of storage-based applications. The px12-450r includes 2 PCIe slots to further expand the px12-450r’s capabilities, particularly by adding I/O connectivity, like 10GbE when it becomes mainstream. Finally, the px12-450r is ready to support 4TB HDDs, expected in wide availability by the end of this year.  Call your rep at BackupWorks.com at 866 801 2944 for all you NAS storage needs and inquire about the px12-450r server class network storage array.