The name change becomes official next week, but Atkinson is briefing people in the industry about the move. With the new name, X-IO will sharpen its focus on solid state storage and gear up for a possible run at going public.

The vendor will continue to build on its ISE architecture, and is renaming its SSD-based ISE system Hyper ISE. The system first launched earlier this year as Hybrid ISE.

“XIO sounds like extreme IO, which is exactly where we want to be with our concentration on performance-driven storage,” Atkinson said.

Atkinson said Hyper ISE “is the same physical product” as Hybrid ISE, but its performance has been jacked up considerably due to improvements in the firmware and the algorithms used to tier data. XIO claims one Hyper ISE system can deliver 200,000 IOPS in a 14.4 TB, 3U box.

Hyper ISE uses multi-level cell (MLC) SSDs and 10,000 RPM SAS drives in one enclosure. Xio sees the system as a good fit for running databases, virtual servers and virtual desktop infrastructures (VDIs).

“We built Hyper ISE for performance-starved apps,” Atkinson said. “This is the next turn of the crank. We were talking about 60,000 IOPS before, but 200,000 IOPS is an awful lot better.”

Even with ISE as its centerpiece, X-IO is a different company than when Atkinson replaced Casey Powell as CEO. Senior management now includes industry veterans COO George Symons and chief strategy officer Jim McDonald. Like Atkinson, both have worked at EMC. The notable holdover is CTO Steve Sicola, who came to Xiotech when it acquired the Advanced Storage Architecture group from Seagate and turned its technology into the ISE platform.

That’s because the rollout of its Hybrid ISE solid state storage system this month has increasingly brought Xiotech into competition with PCIe flash card vendor Fusion-io. Xiotech is also looking to go public eventually, and Fusion-io’s IPO this month raised $237 million.

Xiotech CEO Alan Atkinson said Xiotech will ship every unit of Hybrid ISE it could build this quarter, although he didn’t say how many units were built. “This will be the most successful product launch in Xiotech history, and the first of several products on our roadmap in quick succession that will work together,” he said.

Atkinson said part of the success of Hybrid ISE is due to the awareness of the flash market that Fusion-io created with its products and the attention its IPO created.

Xiotech takes a different approach to SSDs than most storage array vendors. Instead of using SSD as cache or plugging SSDs into traditional arrays, Xiotech puts a set amount of SSD capacity along with hard drives in its storage bricks. Each brick has 20 hard drives and 20 SSDs to provide 14.4 TB of usable capacity, and uses what Xiotech calls Continuous Adaptive Data Placement to move data between hard drives and multi-level cell (MLC) SSDs to optimize I/O performance.

Atkinson said Hybrid ISE is shipping mostly into new markets for Xiotech. The new customer base includes Fortune 500 firms, particularly financial services companies looking to accelerate database performance. “That’s not shocking,” Atkinson said. “That’s where Fusion-io is selling, and that’s where the SSD market seems to be.”

Like Fusion-io’s products, Hybrid ISE appeals more to the people who manage applications than traditional storage admins. Along with Oracle databases, SSDs in storage are a good fit for virtual desktop infrastructures (VDIs).

Atkinson said Xiotech’s advantage is that Hybrid ISE is easier to set up and manage than PCIe cards. “Fusion-io goes to the apps guys and says ‘We can make your stuff look really fast.’ And it’s true,” he said. “But the administration of that is pretty difficult. They have to take a small LUN, open the servers up, put a card in, and roll their own DR solution because there’s no built in replication that looks like disk. And they have 800 gig as a target. That means they have to re-architect things.”

The storage vendor landscape has been re-architected the past few years as the most successful smaller companies have been gobbled up by the big guys. 3PAR, Compellent, DataDomain, EqualLogic, and Isilon all started around the same time as Xiotech but Xiotech is still on its own while the others have been absorbed by Hewlett-Packard, Dell and EMC. And most of those deals have been for billions of dollars.

Atkinson, who sold software vendor WysDM to EMC in 2008 before joining Xiotech, said it’s good to be among the few smaller storage system companies left standing.

“For a private company, those types of acquisitions raise your profile,” he said. “It makes it easier for us to look at a public offering, which is the path we’re on. There’s a dearth of companies in that space and storage has demonstrated itself to be hot. There’s a real appetite in the [financial] community for storage companies.”

Xiotech chief marketing officer Brian Reagan said the vendor had no timetable for embedding primary dedupe into its storage systems. “We’re looking at incorporating Albireo into our next-generation products,” he said, adding that Xiotech does not plan to use it in current shipping products. “It’s an opportunity to enhance products on our roadmap now.”

However, the press release issued by the companies said Xiotech will use dedupe with its Intelligent Storage Element (ISE) storage blades, suggesting that it will be in an ISE upgrade. Xiotech has been pushing its storage’s performance with virtual desktop infrastructures (VDI), and the release said “Xiotech’s leading cost per virtual desktop will be taken to the next level when combined with Albireo’s enormously powerful deduplication of virtual desktops, greatly reducing storage requirements.”

The release also noted that Albireo sits outside the data path, has no impact on data reads, and scales to petabytes.

Reagan said Permabit and Xiotech are headed in the same strategic direction with data reduction, and the move to incorporate reduction technology is inevitable.

“We’ve seen the rise of deduplication and compression in backup and archiving, and it’s a matter of time until it becomes a table stakes feature in primary storage,” he said. Reagan also said using Permabit’s deduplication leaves the door open for Xiotech to add compression as well, although the vendor has no concrete plans for that yet.

Xiotech is the second vendor to publicly announce plans to use Albireo, following NAS vendor BlueArc last month. Permabit CEO Tom Cook says more are coming.

“Until now, NetApp has had a strong advantage as the only vendor with [primary] deduplication,” Cook said. “We’re seeing a clear objective from all storage vendors to have these products in the market in 2011.”

NetApp has offered dedupe for primary data since 2007, but other vendors have been lining up this year to follow that path. Dell acquired primary reduction vendor Ocarina Networks and IBM bought compression vendor Storwize this year. EMC added block compression to its midrange Clariion storage systems, and Hewlett-Packard said it will extend its StoreOnce backup deduplication technology to primary data. Storage systems based on ZFS can also take advantage of the dedupe built into that file system.