Uh-oh: Cash-strapped storage company Drobo files for Chapter 11 bankruptcy
With its parent company, StorCentric, also filing, it remains to be seen if storage company Drobo can turn its fortunes around.
The data storage company, Drobo is facing an uncertain future. Late last month, the brand and its parent company, StorCentric, both simultaneously filed for Chapter 11 bankruptcy protection in California’s Northern Bankruptcy Court (San Jose).
It’s sad news for one of the earliest names in both direct- and network-attached storage, but it’s not necessarily the end quite yet, as one or both companies could emerge rejuvenated. Should that happen, hopefully, the brand’s products will have been reworked to reflect the needs and realities of the current storage market.
Things got off to a great start for Drobo
Founded in mid-2005 as Data Robotics, the company quickly came to be defined by its first product, the original Drobo “storage robot.” Launched in 2007, the device was lauded by the likes of Ars Technica, Engadget, TechCrunch, and more. And to be clear, the brand still certainly has its fans even today.
But those heady early days and the company’s fortunes weren’t to last. While Drobo’s products had their standout features when compared to the competition—most notably, the ability to simply and easily mix drives of varying specifications within a single array—those same features have also proven to be an Achilles heel in other respects. Not surprisingly, the heady praise of Drobo’s early reviews couldn’t last, and public opinion likewise started to fragment.
The success wouldn’t last
Within just five short years, the now eponymously-named Drobo found itself pitted against other early rivals like Synology, Thecus, and QNAP. It was also facing a new wave of consumer storage devices from better-known brands like Dell, HP, Netgear, and Seagate. Many of these rivals offered similar or better performance and pricing. At the same time, the company’s customers increasingly experienced hardware failure, and worse, were then stymied in their rescue efforts by their devices’ proprietary nature.
The company could have hardly hoped for publicity like Trey Ratcliff‘s December 2011 proclamation that “I no longer use my Drobos,” which he called “much cheaper and much slower, and many people believe less reliable.” But even worse was to come in Scott Kelby‘s very public breakup letter, “I’m Done with Drobo,” which he published in June 2012.
This was to be the start of a turbulent few years for the company. Within a year, Drobo had merged with Connected Data, a new storage startup founded by Drobo’s original CEO, Geoff Barrall. And just two years later, Connected Data divested itself of Drobo, spinning the latter off in 2015 to become a separate company once more.
The changes were enough to bring Kelby back on board by early 2017. But by the following year, Drobo was already under new ownership again, this time merged with enterprise storage company Nexsan to create a new entity, StorCentric.
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StorCentric managed just one product release before the situation worsened
In the final weeks of 2018, the new company released its first—and to date, only—new Drobo product, the Drobo 8D. Initially, things seemed to be on the right path, with early reviews proving quite positive. But then in the second half of 2018, the stock suddenly disappeared from shelves right as StorCentric seemed ready to spread its wings. Over the next six months, availability fluctuated before the 8D suddenly disappeared altogether in March 2020.
The newest storage device wasn’t alone in vanishing from the company’s product listings, as the 5D, 5Dt, and B1200i models were also discontinued around the same time the 8D went AWOL. Five other Drobo models remain listed on the company’s website, but all were geriatric, having launched anywhere from five to seven years earlier. By early 2020, only two of these five were still available at retail. (As of today, not a single one remains available to purchase.) Yet Drobo remained silent as to the reasons for its supply issues.
COVID-19 certainly didn’t help
Just as we were starting to ponder the reasons for ourselves, the world suddenly found itself faced both by COVID-19 and all the supply chain issues it rapidly caused. The pandemic finally prompted StorCentric CEO Mihir Shah to break the silence, alluding to delays in its supply chain. As the months rolled on and other companies found ways around their supply chain problems, Drobo’s product line continued to languish and the company remained conspicuously silent.
Shah’s 2020 statement still remains the company’s latest blog post, and its social media properties had all stopped posting by the end of last year. In all of 2021, the company issued just two press releases, one a recap of its prior year and the other announcing participation in a giveaway with lighting company Lume Cube.
Whatever the reasons, the money has run out
With Drobo and StorCentric’s simultaneous bankruptcy filings, we now learn that both companies have run out of cash altogether. But it’s important to note that while this is clearly bad news for both companies and their staff alike, it’s not necessarily the end for either brand and their products.
The process both Drobo and StorCentric have entered is for a Chapter 11 bankruptcy. This indicates an intention to reorganize the companies while under the control of a trustee, with the goal being to resolve debts and return the company to solvency, possibly under the control of the debtors should insufficient funds be available to cover their debts.
At the same time, though, there’s no guarantee that Chapter 11 proceedings will reach a successful conclusion. Drobo’s situation seems particularly concerning given both the age of the company’s existing product line and the lack of any indication it has new products in the pipeline ready to go. In a market where its competitors are still releasing new products and making strides forwards, Drobo has already sat still for multiple years. Now under bankruptcy, it has even more waiting to do before it can attempt a renaissance.
Has time run out, too, or will Drobo return phoenix-like?
With the first court hearing scheduled for July 19 and creditors able to make claims through October 17, things won’t likely be returning to normal for Drobo and its parent company for some time.
The question is how much longer it can hope to survive without any products on sale and whether it has any products waiting in the wings that could turn its fortunes around. For the sake of its staff and remaining loyal customers, we can only hope so.