Xiotech moves headquarters to Springs from Minnesota

Xiotech Corp., which develops and manufactures computer storage devices, has moved its corporate headquarters from the Minneapolis area to space it shares with the company's research operation in Colorado Springs.

The privately held company plans to move about 20 executives and other workers from Minnesota and hire an additional 10 locally over the next three months, said Brian Reagan, Xiotech’s chief marketing officer. Employees who don’t want to make the move will get two months of pay as part of a severance package, and about 30 employees will remain in the Minneapolis area, including some sales, customer support and engineering staff, he said.

Technology developed in the Springs “is now the exclusive focus of the company, and aligning corporate resources with the center of our technological resources made sense,” Reagan said Friday. “We are eager to grow our presence in Colorado Springs.”

The Colorado Springs Regional Economic Development Corp. has been working with Xiotech since November and estimates the 30 jobs will pay salaries averaging about $80,000, or nearly twice El Paso County’s average wage.

“This is exactly the kind of company we are trying to attract to become one of our major employers of the future,” EDC CEO Mike Kazmierski said. “This may not seem like a lot of jobs initially, but they are likely to grow in coming years.”

Xiotech’s CEO Alan Atkinson, Chief Operating Officer George Symons and Reagan  will continue to work out of home offices in New York, California and North Carolina, respectively, Reagan said. The company already employs about 60 engineers and others at its Advanced Storage Architecture Group at 9950 Federal Drive in the InterQuest business park, which has enough room to accommodate Xiotech’s corporate headquarters, he said.

The company makes high-capacity data storage devices that are used primarily in corporate data centers. The product line, called the Intelligent Storage Element, was developed by the local operation that was acquired in 2007 from Seagate Technology LLC. That operation was started in 2002 with veteran engineers who had previously worked for Digital Equipment Corp. and Compaq Computer Corp., but left when Hewlett-Packard Co. acquired Compaq.

Xiotech is phasing out an older technology called Magnitude that was developed in Minnesota, where the company was founded in 1995. Seagate bought Xiotech in 2000 for $360 million, but later spun it off as an independent company. Xiotech raised $40 million from an investor group in 2007 and another $10 million in 2009 in a private placement; Connecticut venture capital fund Oak Investment Partners is the company’s majority shareholder, while Seagate holds a minority stake.

The Springs area has been a hotbed for computer storage, hosting a research lab for the Storage Network Industry Association, major operations for industry giants Hewlett-Packard and Quantum Corp. and startups like STORServer Inc.