Xiotech Hires Maranti Founders

Maranti Networks Inc. founders Kuldeep Sandhu and Santosh Lolayekar today joined SAN system vendor Xiotech Corp., where they will head a new development team.

Sandhu and Lolayeker will set up shop out of Xiotechs new Silicon Valley office. Former Maranti CEO Sandhu joins Xiotech as executive VP of storage solutions; former Maranti CTO Lolayekar will become VP of storage solutions architecture. Their team will develop software applications to automate disaster recovery, migration, rapid deployment, and other services for the company’s Magnitude 3D SAN system (see XIOtech Fixes a Failing and XIOtech Stresses Simple SANs).

Xiotech CEO Alain Andreoli says the team will consist of about 10 sales and support people in California, and at least 10 developers at the company’s Hyderabad, India, development center. He says it's important for the Eden Prairie, Minn.-based company to have a Silicon Valley presence. As for the Indian presence, he says, “We are not moving jobs there. These are new positions.”

Sandhu says his group's goal is to make Xiotech's systems easier to manage. They'll start by rolling out individual management applications within three months. They'll also develop a policy manager to oversee all of the automated tasks within six months.

As for Maranti, Sandhu says the company’s three founders -- Harish Nayak is the third -- completed the job they began four years ago when they conceived of a multiprotocol embedded switch. “We delivered that product,” Sandhu says. “I said, ‘I have been here four years. I can take on another challenge.’ ”Sandhu and Lolayekar have engineering backgrounds. Before starting Maranti, Sandhu was VP of engineering at Efficient Networks and iReady Corp., and he worked at National Semiconductor Corp. (NYSE: NSM). Lolayekar previously worked at Cisco Systems Inc. (Nasdaq: CSCO).

The Maranti founders' exit followed the board's appointment of Debbie Miller as CEO in February 2004 (see More Money for Maranti). Her move from blade server startup Egenera Inc. to Maranti coincided with a $26 million funding round, and there is speculation the founders were pushed out by venture capitalists looking for change. When Miller became CEO, Sandhu took the post as chief strategy officer -- but not for long.

Founders leaving a startup isn't unusual. “The entrepreneurs who get things up and running rarely transition into day-to-day guys,” says financial analyst Steve Berg of Punk Ziegel & Co. “Still, it seems like it was kind of early for them to leave.”

Indeed, Xiotech's founders Phil Soran, John Guider, and Larry Aszmann went on to found competitor Compellent Technologies Inc. Now Compellent and Xiotech appear to be heading to court (see Compellent, XIOtech Swap Suits).

Sandhu says he expects no legal problems with Maranti because it is not directly in competition with Xiotech.— Dave Raffo, Senior Editor, Byte and Switch