Kealia Project Raises Questions

Sun Microsystems Inc. (Nasdaq: SUNW) founder and Cisco Systems Inc. (Nasdaq: CSCO) VP Andy Bechtolsheim is working hard at a secret startup company in Palo Alto, Calif. But he's not yet ready to talk about what it is his company Kealia Inc. – is working on.

"We are in stealth mode right now and there are no announcements to make," Bechtolsheim said when reached at Kealia by Light Reading on Wednesday morning.

"Can you tell us if Cisco has any affiliation with Kealia? Or is this something you're funding and working on by yourself?" we inquired, while adjusting our fedora and ashing a cigar.

"I can't comment on your questions right now," he politely replied.

Kealia's existence came to light after Light Reading reported that a handful of trademark applications made by Bechtolsheim ignited some old rumors that Cisco was in the process of developing some remarkable product in the video server and storage business (see Is Cisco Tuning Into Video?).Between December 2002 and May 2003, according to the U.S. Patent and Trademark Office, Bechtolsheim filed trademark applications seeking to protect the following words: "Streamhub," "Streamswitch," "Streamstar," "Streamstor," "Streamcast," and "Netblade." Some in the Valley insisted that there was some correlation between those names and some kind of newfangled video server device that Bechtolsheim was working on -- presumably for his employer, Cisco.

Enter Kealia.

Kealia's existence -- and the fact that we reached Bechtolsheim there during the work week -- lends some credibility to the rumor that he's building a distributed, high-availability video server of some sort. The question remains: Who's Bechtolsheim working for and what, if anything, does Cisco have to do with it?

Is it possible that Cisco is funding another Andiamo-like dummy company as a way of retaining employees with big stock-option payouts? (See Cisco's Creative Andiamo Options.) Or is Bechtolsheim just lending his expertise to another networking startup that doesn't compete with Cisco?

The trail runs a bit cold here, but, according to the California Secretary of State's office [ed. note: now headed, we believe, by Jean-Claude Van Damme], Kealia's articles of incorporation do list another curious name as the company's president: David Cheriton.Cheriton, the computer science professor who leads Stanford University's Distributed Systems Group (DSG), founded Gigabit Ethernet switching startup Granite Systems in 1995 along with Bechtolsheim. In 1996, Cisco bought Granite Systems for about $220 million in stock.

Kealia was incorporated in February 2001, according to public records.

— Phil Harvey, Senior Editor, Light Reading