Reports say that NeoScale has stopped selling product. Most employees have been fired and it is being run by its bankers. They are looking to sell and Dell, Oracle and Pretty Good Privacy have been over the books. EMC might have taken a look too.
The rise and fall of the stand-alone encryption appliance market has been spectacular; from not-boom to bust in a just five years. The market never really boomed and NetApp's Decru has not sold 1000s of systems, racking up around 600 customers. The market is moving to encrypting storage devices co-ordinated with networked key management systems. Encryption itself is just a commodity.