Procom Technology
| Company type | Public (from 1997) |
|---|---|
| Industry | Computer storage solutions |
| Founded | 1987 in Irvine, California, United States |
| Founder | Alex Razm'joo, Nick Shahrestany, Frank Alaghband, Alex Aydin |
| Defunct | 2005 |
| Fate | Intellectual property acquired by Sun Microsystems; remaining assets acquired by CNDL Acquisition Corporation |
| Headquarters | Orange County (Irvine), California , United States |
Area served | Worldwide |
Key people | Alex Razm'joo (managing founder) |
| Products | Standalone magnetic and optical storage devices; CD Tower series (CD-based NAS devices) |
Number of employees | 200 (circa 1996) (1996) |
Procom Technology, Inc. was a United States-based manufacturer specializing in computer storage solutions, headquartered in Orange County, California, and operational from 1987 until 2005. The company initially developed standalone magnetic and optical storage devices compatible with IBM PC and Macintosh systems. Over time, Procom shifted its focus toward platform-independent network-attached storage (NAS) products. Their signature offering became the CD Tower series, a line of CD-based NAS devices. In 2005, the intellectual property rights of Procom were purchased by Sun Microsystems for $50 million.
Establishment and Early Years (1987–1992)
Founded in 1987 in Irvine, California, Procom was established by four Iranian-born entrepreneurs—Alex Razm'joo, Nick Shahrestany, Frank Alaghband, and Alex Aydin—all graduates of the University of California, Irvine, with prior experience in the industry. Razm'joo and Shahrestany had previously been employed at the Irvine data storage company CMS Enhancements. The startup began operations with an initial investment of $40,000.
Their inaugural product was an external 5.25-inch floppy disk drive designed for IBM’s PS/2 computers, at a time when the market was transitioning to 3.5-inch floppy disks. This product achieved early commercial success and helped generate $2.5 million in revenue by 1988.
Towards the end of the 1980s, Procom expanded its portfolio to include external hard drives bundled with cross-platform software compatible with both Macintosh and IBM PC computers. The company’s revenues increased from $12 million in 1989 to $18 million in 1990, further growing to $28 million by 1991 with a workforce of 125 employees. In 1992, Procom moved into a larger facility in Irvine and filed for an initial public offering (IPO), though it later withdrew the application that same year.
Growth and Market Presence (1992–2000)
During the early 1990s, Procom established itself as a reputable provider of diverse data storage products, focusing largely on hard-drive-based network-attached storage (NAS) systems. In 1994, the company introduced its CD Tower series—CD-based NAS devices aimed at corporate customers requiring frequent access to extensive data collections. These units utilized SCSI interfaces and were initially available in configurations featuring 7, 21, or 49 drives. By late 1995 or early 1996, Procom released the CD Tower Rax model with 56 drives and predominantly hot-swappable parts; this model was priced at $69,000 in 1996.
By the end of 1996, Procom had broadened its international footprint with offices established in France, Germany, and Canada, employing approximately 200 staff members worldwide. After an unsuccessful IPO attempt five years earlier, the firm successfully went public on the Nasdaq stock exchange in 1997, raising $18 million through the sale of two million shares. The four founders divested most of their holdings at $9 per share during this offering, achieving millionaire status.
Subsequently, Procom experienced a steep revenue decline as corporate buyers transitioned away from CD-based NAS products toward more economical hard drive–based NAS systems offering higher storage densities. Despite this downturn in sales, the company’s stock price surged again by 2000 amid the dot-com boom, reaching a peak of $89.75 per share in March before settling near $57 following volatility. This era was characterized by six straight quarters of financial losses totaling $11 million alongside a 39% reduction in sales.
Downturn and Acquisition by Sun Microsystems (2000–2006)
By 2002, three of the founding members—Shahrestany, Alaghband, and Aydin—had stepped down from executive roles at Procom; only Razm'joo remained as managing founder while Shahrestany and Alaghband continued serving on the board. In May 2005, Sun Microsystems purchased Procom’s intellectual property assets for $50 million in a significant transaction. Later that year, in December 2006, CNDL Acquisition Corporation—a private company established by Razm'joo—acquired the remaining assets of Procom, effectively concluding its independent corporate existence.