Maranti's Minus a CEO

Maranti Networks Inc. has quietly bid adieu to CEO Debbie Miller after ten months on the job.

Former engineering VP James Kuenzel replaced Miller as president, but the company is without a CEO and in no apparent hurry to find one (see Maranti Names New President).

One source familiar with the company says its priority is finding money because it has almost burned through most of the $57 million raised over three rounds since 2000. It appears they are just about out of money,” the source says. “They need funding ASAP.”

Maranti did not announce Miller’s departure as CEO and president, which comes amid whispers that venture capitalists behind the startup wanted a change. Calls and emails to Maranti’s San Jose, Calif.-based office went unreturned, but one executive sent word through an outside spokesman that Miller has left.

“Debbie Miller has transitioned out of Maranti,” the spokesman says. “There is no CEO or any active search going on.”The spokesman says Miller’s main role was to build a sales channel for Maranti. Thirteen months after launching its CoreStor intelligent switch, Maranti hasn’t announced a paying customer (see Maranti Makes It to Market). Its time-to-market advantage is rapidly disappearing, as the major switch players Brocade Communications Systems Inc. (Nasdaq: BRCD), Cisco Systems Inc. (Nasdaq: CSCO), and McData Corp. (Nasdaq: MCDTA) all expect to have intelligent switches this year.

"If she's gone already, that doesn't speak too highly about what's going on there," says analyst Arun Taneja of the Taneja Group.

Miller joined Maranti last February, a year after stepping down as president of utility computing startup Egenera Inc. She replaced founder Kuldeep Sandhu, who remained at Maranti as chief strategy officer until May, when he and fellow founder Santosh Lolayekar left for SAN vendor Xiotech Corp. (See Xiotech Hires Maranti Founders.) The third founder, Harish Nayak, has since left the company as well.

Maranti issued a news release on Christmas Eve announcing Kuenzel’s promotion, and bumped up Prakash Rao from director of engineering to VP of engineering. The release did not mention Miller. Kuenzel held the engineering VP post at McData before joining Maranti in December of 2002.

When Maranti raised $26 million in funding last February, Miller boldly predicted the input would take Maranti to profitability. However, the switch startup field has been thinning in recent months. Although MaXXan Systems Inc. recently secured $29 million in funding, Candera and Sandial shut down after failing to secure new rounds (see MaXXan Scores $29M, Kodiak Pushes in Kentucky, and Sandial's Out)."Those companies are all at the stage where the VCs have got to be saying 'get some traction or get the heck out,' " Taneja says.

A lot storage insiders doubt the survival chances of all the public switch companies. There have been acquisition rumors swirling around Brocade, Cisco, and McData, and Computer Network Technology Corp. (CNT) (Nasdaq: CMNT) is treading water. (See RBC Poll Forsees More M&A, CNT Gets UMD Bounce, and CNT Takes a Hit.)

— Dave Raffo, Senior Editor, Byte and Switch