Imperial: Royally Screwed?

After yo-yoing between firing half of its employees in July 2002 and then hiring them all back five months later, solid-state disk player Imperial Technology Inc. has abruptly reached the end of its string, as the company appears to have gone out of business.

While we were unable to get hold of anyone at Imperial Technology to verify that the company in fact is no more, signs point in that direction. The companys Website is up and running, but its phone system is not working and CEO Robert David appears to have disconnected his cell phone. We have received no response to numerous emails sent to several company employees, including VP of marketing Craig Harries.

And we’re not the only ones who haven’t managed to get through to the 25-year-old company. Imperial Technology’s PR firm, JPR Communications, hasn’t worked with the company for the past eight months and hasn’t heard from them in weeks, according to a source close to the firm, who has asked to remain anonymous.

Analysts, too, say they’ve been trying to get in touch with the company, but in vain. "We haven’t had a call back in nine days or so," Enterprise Storage Group Inc. analyst Steve Duplessie writes in an email. "I think they have bit the proverbial Big One."

Evaluator Group analyst Randy Kerns, who has also been unsuccessful at reaching the company, says the issue is still profitability. "They had to sell enough product to make profits to sustain the company," he says. "That is a niche product, and they probably didn't get the volume with enough margin to continue."This wouldn’t be the first time that Imperial Technology has run into a sales drought. In mid-2002, the El Segundo, Calif., company was so parched for business it was forced to lay off around half its staff, leaving it with only about 20 employees to its name (see Imperial Goes Into 'Hibernation Mode').

The problem for Imperial Technology and other solid-state disk (SSD) vendors is convincing customers to pay a small fortune for better I/O performance. SSD systems consist of dynamic random-access memory (DRAM) modules designed to eliminate I/O bottlenecks for high-performance applications such as transaction-processing databases. But while they deliver far better I/O performance than magnetic disks, SSDs are much more expensive per megabyte.

In May, Imperial competitor Solid Data Systems felt the burn too, and was forced to lay off a chunk of its staff (see Solid Data Gets Squishy). Other players in this space include Platypus Technology Inc. and Texas Memory Systems Inc. (see TMS Torches SSD Storage and Platypus Sinks Claws Into SSD).

Imperial, after its near-death experience last summer, appeared to have turned things around. “"The rumors of our death were greatly exaggerated," CEO David wittily japed in an interview with Byte and Switch in January this year (see Imperial Snaps Out of It).

In fact, after landing a few new big accounts, David was so confident in Imperial’s survivability that he not only hired back all of the company’s laid-off employees, but added a few new faces to the crowd as well.And in February, the company launched its MegaRam-10K, an enormous 1-Tbyte SSD system, carrying a $2 million price tag (see Imperial Debuts Solid Terabyte).

But while going bust seems to have caught Imperial off guard, analysts say it’s not surprising. "Solid state as a business has been under a lot of pressure," says one industry analyst who has asked to remain anonymous. "It wouldn’t surprise me at all if they [went out of business]. Any time I don’t hear about a company for six months, it’s a bad sign."

— Eugénie Larson, Senior Editor, Byte and Switch