SAN Holdings, Inc

900 West Castleton Road, Suite 210

Castle Rock, CO 80109

(303) 660-3933

www.sanz-inc.com

Sales

$55.5 million

Business Description 

SAN Holdings, Inc. (“we” or “SANZ”) provides sophisticated enterprise-level data storage and data management solutions to commercial and government clients. We focus on the design, delivery and management of data storage systems, especially those that are built using a network architecture. Because we typically design integrated solutions for our clients rather than merely selling them hardware, we are known in the industry as a “storage solution provider.”

In the course of our business, we provide the following products and services:

Historically, we have generated revenue from a mix of custom-designed projects consisting of both goods and services, re-sale of data storage products without a significant service element, and project-based and time-and-materials based consulting and similar services. Approximately three years ago, we also began development of integrated solution products to provide data storage and management solutions tailored to deliver optimized performance for particular market segments. As discussed in more detail below, that development effort has led to our EarthWhere^TM software product, which is designed to facilitate the provisioning and distribution of stored geospatial data (e.g., map data, satellite and aerial imagery, etc.). We recorded several early sales of an EarthWhere^TM “appliance” (integrating hardware and software) in 2002, and we launched “general availability” of our EarthWhere^TM software in April 2003.

Demand for data storage is the result of a proliferation of data intensive applications, from areas as sophisticated as document imaging, pharmaceutical development, electronic banking, satellite imagery manipulation, and scientific research, to those as commonplace as email. A combination of business, regulatory and geopolitical concerns have also caused businesses to recognize the need for effective archiving of their data and recovery of that data in the event of disaster or other failure. The common thread among these applications is that data storage is an enabling element to most all businesses. In addition to fundamental issues of data storage, data availability requirements also drive infrastructure needs. Today’s businesses depend on rapid response time in many functions, both internally and with vendors and customers via the Internet, making high availability essential for a wide variety of applications. Consolidating data storage in networks at centralized data centers increases the accessibility of data to multiple end-users and at the same time lowers costs through increased utilization and more efficient management.

Because we have attempted to grow rapidly, and simultaneously have incurred substantial expenses in our efforts to develop our integrated solution products, we have generated significant losses over our operating history. Several of the companies we have acquired (including ITIS Services, Inc., acquired in 2001 and Solunet Storage, Inc., acquired in 2003) also generated significant losses as independent companies prior to their acquisition by SANZ. While we have narrowed these losses in recent periods, and we generated positive earnings before interest, taxes, depreciation and amortization, and other non-operating income or expense (“EBITDA”) in the third and fourth quarters of 2003, we have yet to generate a net profit.