JT Storage, aka JTS Corporation, looks on the surface like just another 90s hard drive company that got mauled by Seagate and Western Digital. But I’d say they were significant for two reasons: Their quality, and their corporate ancestry. You see, when Atari decided to close up shop in the 90s, it did so by merging with JTS.
The “JT” in JTS had nothing to do with Atari CEO Jack Tramiel, but the two companies were kindred spirits in many ways, aspiring to compete mostly on cost.
Origins of JTS hard drives
JTS was founded in 1994 by Jugi Tandon and David B. Pearce. Its namesake was cofounder “Jugi” Tandon, the inventor of the double-sided floppy disk drive and founder of Tandon Corporation. JTS stood for Jugi Tandon Storage. David B. Pearce was the former CEO of Kalok, a bankrupt manufacturer of low-tier IDE hard drives. JTS licensed Kalok technology from TEAC and Pont Peripherals to get started.
The company reverse-merged with Jack Tramiel’s Atari Corporation in 1996, sold all Atari assets to Hasbro Interactive in 1998, and was declared bankrupt in 1999.
A few months after its foundation, Pearce departed the company, with Tandon filling his role as president. In June 1995, Tom Mitchell, a co-founder of Seagate and former president and Chief Operating Officer of both Seagate and Conner Peripherals, became the new JTS Chief Executive Officer.
JTS product lines
JTS initially focused on a new 3-inch form-factor drive for laptops. The 3-inch form factor allowed a larger drive capacity for laptops than the 2.5-inch form factor typically used in laptops. Compaq was actively engaged in qualifying these drives and built several laptops using them. Lack of a second source was a major obstacle for this new form factor to gain a foothold. JTS licensed the form factor to Western Digital to attempt to remedy this problem. As 2.5-inch drives became cheaper to build, manufacturers lost interest in the 3-inch form factor, and JTS and WD stopped the project in 1998.
JTS by then had become a source of cheap 3.5-inch drives with 5400 RPM spindles. The drives were produced in a factory in India to help lower costs. They were known for poor reliability. Failure rates were very high and quality control was inconsistent. Good drives could last 5 years or more, which was very good for the 1990s. Bad drives failed quickly, often within a few weeks. Performance was middling at best, so they were rare in brand-name PCs and most frequently turned up in home-built and whitebox PCs. The main appeal to JTS was cost. With PC components getting less expensive, hard drives made up an increasing percentage of the cost of a PC.
JTS product lines included Palladium and Champion internal IDE hard drives.
The basic design of JTS drives was done by Kalok for TEAC in the early 1990s. TEAC used the design as part of a removable HDD system, which was also sold under the Kalok name. After Kalok failed in 1994, JTS hired former Kalok employees and licensed the patents involved from TEAC and Pont Peripherals.
Merger with Atari Corporation
On February 13, 1996, JTS announced a reverse merger with Atari Corporation, the one-time giant of home computers and game consoles. It was primarily a marriage of convenience. JTS had products but little cashflow. Atari lacked product to sell but had money, primarily from a series of successful lawsuits earlier in the decade followed by good investments. However, with the failure of its Jaguar game console and no other products to sell, Atari expected to run out of money within two years.
Originally Atari expected to survive as a separate division under JTS, but in April the merger was amended so that Atari would merge into JTS, with JTS being the surviving entity. Atari’s Jack Tramiel took a seat on JTS’s board of directors.
Within a few months of the merger becoming official on July 30, all former Atari employees were either dismissed or relocated to JTS’s headquarters. Atari’s remaining inventory of Jaguar products proved difficult to liquidate, even at closeout prices. It was finally moved out to a private liquidator on December 23, 1996.
Demise
The company secured $25 million in finances in September 1997. But even with the cash infusion from Atari and other financing, JTS quickly ran out of money. On March 13, 1998, JTS sold the Atari name and assets to Hasbro Interactive for $5 million to raise more money. On two occasions in April, JTS staff were laid off including some former long-time Atari employees, and the company was delisted from the American Stock Exchange (AMEX).
The December 1998 issue of Maximum PC contained several accounts of readers with failed JTS drives and differing stories about support when the drives failed. Some readers found JTS quick to respond. Others found they had to wait months to get drives replaced under warranty.
Later that year, on December 11, 1998, JTS filed for Chapter 11 bankruptcy protection. It reported $4.2 million in assets and $136 million in liabilities. On January 28, 1999, JTS closed down for good when the bnankruptcy courts converted its filing into involuntary Chapter 7 liquidation.
David Farquhar is a computer security professional, entrepreneur, and author. He has written professionally about computers since 1991, so he was writing about retro computers when they were still new. He has been working in IT professionally since 1994 and has specialized in vulnerability management since 2013. He holds Security+ and CISSP certifications. Today he blogs five times a week, mostly about retro computers and retro gaming covering the time period from 1975 to 2000.