By Chris Mellor
6th January 2009 18:10 GMT

Back in December 2007, a confident GlassHouse Technologies, sensing good prospects in its services and consulting area, filed for an IPO. In the spring of 2008, it entered a strategic partnership with Dell, made another acquisition - and then the recession happened.

The company has started firing people as it cuts costs and drives towards profitability in the words of Curtis Preston, one of the world's most influential bloggers about backup technologies and procedures. What is going on? GlassHouse Technologies was founded in 2001 by Mark Shirman and Richard Scannel to provide vendor-independent services and consulting. It has a storage heritage and has expanded into data protection, virtualisation, data centre services, and managed services.

Product sales were 44 per cent of revenue in 2004 but declined to almost zero in 2007, the company now being focussed entirely on services. It has grown through a sustained policy of acquiring focussed services companies with five bought by the end of 2006. Four more were bought in 2007, which collectively cost $30m in stock and cash: RapidApp of Chicago, Illinois, a server virtualization company; Data Center Moves International of London, UK, and its data centre services offerings; MBI Advanced Computer Systems Ltd of Israel; and Integrity Systems Inc of Israel.

The acquisitions bring in consulting staff and clients and also consulting and services intellectual property [IP], enabling the firm to grow faster than by hiring staff alone. The intended IPO, with a potential $100m target, was registered with the SEC in December 2007, but no prospectus was ever offered detailing the number of shares on offer and their price.