Solid Data Gets Squishy

Solid-state disk vendor Solid Data Systems has buckled under the pressure of flagging sales, laying off a good portion of its employees and relieving its CEO and founder, Wade Tuma, of his day-to-day duties, Byte and Switch has learned.

Gary Taggart, Solid Data's VP of sales, will become acting CEO. He says the company cut "fewer than 20 employees," leaving it "in the neighborhood of 30, and with the revenues to sustain that."

As part of the restructuring, Solid Data's board of directors decided to replace Tuma, although he will remain chairman, according to Taggart. "Wade is technically brilliant, but day-to-day operations are not his forte," he says.

What's ailing Solid Data? The Santa Clara, Calif.-based company sells solid-state disk (SSD), which is essentially an array of Synchronous Dynamic Random Access Memory (SDRAM) modules designed to speed up I/O-intensive operations. Solid Data's primary market is telecom, accounting for about 75 percent of its sales -- and right now, the companies in this sector just aren't spending money, Taggart says: "It's a tough, tough space... It's a time to hunker down and watch your expenses."

Another SSD company, Imperial Technology Inc., was similarly hammered by stagnating sales last year and was forced to lay off employees, before rebounding late in 2002 and hiring many of them back (see Imperial Goes Into 'Hibernation Mode' and Imperial Snaps Out of It).For Solid Data, there may be some encouraging news on the horizon. Taggart says it's developing a new product, which it will announce within 90 days, that will integrate software with SSD. "It will move the company into a solution sell," he says. "It moves us up from a high-performance storage product to being a solution."

Imperial Technology, incidentally, is working on its own software-oriented play, with a venture called Valumation Software. Company executives aren't ready to spill the beans on what Valumation is all about, yet, but Imperial VP of marketing Craig Harries says it's been about a year in the works.

Meanwhile, there was a rumor scuttling about that Solid Data is planning to file for Chapter 11 bankruptcy protection -- but Taggart vehemently denies this. "This thing about Chapter 11, I find that pathetic," he says. "That's just categorically not true."

Taggart joined Solid Data Systems as VP of sales in February 2002. Previously, he served in sales positions at Eicon Networks and Secure Computing, among other companies.

Todd Spangler, US Editor, Byte and Switch