Quantum is a storage facility for your data. The company provides hardware and software used for data archiving, backup, and recovery. Its products include tape- and disk-based storage devices, automated tape library (ATL) systems, and related media. It also provides data management software and offers services in configuration, installation, technical support, and training. Quantum sells its products through resellers and distributors and to computing equipment makers such as Dell, EMC, HP, IBM, and Oracle. The company makes two-thirds of its sales in the Americas; its top five customers account for about 30% of sales.
The company's storage products account for nearly two-thirds of its revenue. The tape automation systems is its biggest product unit, bringing in 27% of sales. Scale-out storage solutions provides 16% of sales with device and media and disk backup systems each accountinf or about 10%. The company's service business is 28% of sales.
Quantum maintains sales offices in China, France, Germany, Singapore, the UK, and the US (in several states). It has research and development facilities in Australia and the US (in several states) and 24-hour, multi-language technical support centers in North America, Europe, and Asia.
The US is its largest single market, accounting for 62% of sales. Europe makes up about 27% of sales and Asia accounts for the remaining 11%.
Sales and Marketing
Quantum sells its products through resellers such as CDW and distributors (including Ingram Micro) through its Quantum Alliance Reseller Program. OEM customers that resell its hardware under their own brand names typically assume responsibility for sales, service, and support. (A large percentage of sales come from a few customers, some of which are also competitors.) In addition, Quantum sells directly to some corporate clients and government agencies. Customers range from small businesses to multinational corporations.
Quantum arrested seven straight years of declining revenue, reporting $553 in revenue in 2015 (ended March), the same as 2014. Sales of the company's tape systems dropped 13% in 2015 as customers turned to other storage media. Sales of its scale-out storage systems jumped 62%, but the unit is not big enough to offset the tape decline. The 27% slide in royalty revenue in 2015 was in relation to higher revenue it posted in 2014 from an intellectual property settlement.
Along with stable revenue, lower R&D and sales and marketing costs helped Quantum leap to a $16.7 million profit in 2015 from a loss of $21.5 million in 2014. The company also realized $13 million from the sale of its take in a privately held company. Cash flow from operations was $6 million in 2015 compared to $35.5 million in 2014.
New technologies have replaced demand for tape-based storage products, and Quantum has seen its business decline as a result. The company has kept up with disk products by emphasizing software solutions, branded disk systems, next generation object storage, virtual offerings, and cloud solutions. Notable new product introductions include StorNext 5 software, DXi 4700 disk systems, expansion of the Lattus Object Storage offerings, and adding new features to the Scalar i6000 enterprise library.
Quantum has also expanded its strategic partnerships to combine Lattus with products from other partners to reach data center environment solutions, to provide an object storage-based private cloud solution, and to create an archiving solution that reduces the burden of unstructured data growth on primary storage.
To remain competitive, the company has transitioned all of its manufacturing to contract manufacturers. Until 2014 some products were produced in China, Japan, Malaysia, Singapore, and the US. Now its disk products, vmPRO appliances, StorNext appliances, tape automation systems, tape devices, and service parts are made by third parties in China, Hungary, Malaysia, Singapore, Thailand, and the US.
Mergers and Acquisitions
In 2014, Quantum acquired Symform Inc.'s cloud storage services platform and development team. The move provides Quantum with technology and expertise to leverage scale-out storage and data protection to expand its offerings.