Nishan Talks Some Trash

Startups in the storage networking industry generally know when to mind their Ps and Qs. Small wonder: It's not usually a sensible move to rub incumbent players the wrong way -- especially those that are in a position to offer one a juicy OEM deal, or even a fat acquisition offer.

Then there's Nishan Systems Inc. Never one to hide its light under a bushel, it's now hit new levels of chutzpah with the appointment of a new VP of sales, and former Cisco founder, who is telling EMC Corp. (NYSE: EMC) exactly where to go.

Terry Eger will be acting VP of sales for Nishan for the next six months. In that time he plans to radically change the company's business model.

Nishan can’t wait around for EMC or anyone else to help,” Eger says. "It needs to get into major accounts now."

Prior to his appointment, Nishan had been telling its story to EMC, Hitachi Data Systems, and the other major storage sellers, in the hope that these companies would want to resell its product (see IP Storage Spec Shapes Up).“They didn't -- and why should they?” Eger says. He believes Nishan has to create the demand for its products and stand up and sell them on its own. He adds: “If EMC wants to help us out then great, but do it now. Don’t come running when the company is winning, because we won’t need them then.”

Fighting words! And Eger has the credentials to be taken seriously. He was one of the first eleven people at Cisco Systems Inc. (Nasdaq: CSCO) and was responsible for hiring John Chambers, the current CEO, and most of the management team. He left as the company went public, due to ill health, and since then has served as a consultant to more than 30 startups -- including Ascend, Broadcom Corp. (Nasdaq: BRCM), and Redback Networks Inc. (Nasdaq: RBAK).

Still, analysts say Eger's moxie may be a mistake. “This is fantastically arrogant,” says Dan Tanner storage analyst at the Aberdeen Group Inc.

“Telling EMC it must jump in now or will be banned forever is ridiculous,” says Galen Shreck, storage analyst with Forrester Research. “Playing games like this with a multibillion-dollar company will only lead to embarrassment.”

Another analyst, who declined to be named, said appointing Eger as the new front man for Nishan was an odd decision: “It’s like taking an old baseball player and putting him back in the lineup -- he could get hurt."EMC brushed off Eger's comments. “This is a lot of bluster from a company that doesn’t have much,” Mark Fredrickson, VP of corporate communications at EMC told Byte and Switch. He added that EMC in fact owns a small percentage of Nishan, so the companies do already have a relationship.

Meanwhile Nishan is preparing for war. In four weeks time the company plans to hold a demonstration of its IP storage switch, carrying traffic over a major U.S. telco’s coast-to-coast network. Cisco, IBM Corp. (NYSE: IBM), and Juniper Networks Inc. (Nasdaq: JNPR) are expected to participate. Interestingly, EMC hasn’t signed up.

“The next six months is going to be a testing time for Nishan,” says Eger.

— Jo Maitland, Senior Editor, Byte and Switch http://www.byteandswitch.com

Movers and shakers from more than 100 companies – including several mentioned here – will be speaking at StorageNet, Byte and Switch’s annualconference, being held in New York City, October 2-5, 2001. Check it out at StorageNet2001