Silverback Signs CEO

Silverback Systems Inc. has a new CEO as it tries to stay afloat amid a sea of sunken TCP/IP offload engine (TOE) startups.

Ahmet Houssein will officially take over as Silverback CEO Tuesday after spending three years as general manager of the Storage Solutions Group at Adaptec Inc. (Nasdaq: ADPT) and six years with Intel Corp.s (Nasdaq: INTC) enterprise server and home server groups.

That background shows Houssein knows the TOE market. He's also aparently into risk-taking. In 2004, TOE startups iReady and Xiran went under, and Trebia took the 10-count the previous year (see Xiran Gets Crossed Out, iReady to Go, Nvidia Buys iReady, and Trebia Croaks).

Houssein points to two reasons why he agreed to run the Campbell, Calif.-based startup. First, he relishes the chance to be a CEO. “These guys came after me and were very persuasive, and it’s a career path I wanted to take,” he says. He also thinks Silverback’s iSNAP processors, which provide TCP/IP offload and iSCSI acceleration, can bring in significant revenues soon (see Silverback iSNAPs Into Dual-Port Mode and Silverback Ships iSCSI Processor). "Traction will come over the next couple of months to a year. People want to see performance from iSCSI to match Fibre Channel.”

Linley Gwennap, principal analyst of The Linley Group, says Houssein needs to be as impressive as his resumé to turn Silverback around.“I’m pretty impressed they were able to sign this guy,” Gwennap says. “He has a good technical background. The fact that he would be willing to walk into a company that looks in bad shape means he thinks there’s something he can build on. His first priority has to be to get more funding.”

Silverback raised more than $32 million from VCs, but hasn’t had a funding round in two years outside of a small strategic investment from Intel last June (see Silverback Lands $15M Third Round, Silverback Finds iSCSI Partner, and Intel Backs Silverback). Houssein says he's looking both for venture funding and more strategic investments.

Gwennap thinks Silverback must revamp its product family to survive. Silverback stuck with high-end iSCSI HBA cards while its surviving competitors have each gone in one of two directions. Alacritech Inc.

and Broadcom Corp. (Nasdaq: BRCM) built iSCSI capability into cheaper network interface cards (NICs) for servers; and Aarohi Inc. and iVivity Inc. manufactured iSCSI chips for intelligent switches. (See Alacritech Upgrades TOE Line, Broadcom Unveils iSCSI Controller, iVivity Delivers 4-Gig Chip , and Aarohi Advances Action Plan.)

Gwennap sees low-end servers or switches as the ways to go for iSCSI chips. “Silverback is stuck in this middle zone,” he says, "not powerful enough for switches but too expensive to get into HBAs."

Houssein agrees Silverback must get into the server market, but says there needs to be more iSCSI systems out there first. His product roadmap includes a PCI express card by the end of the year. He also expects to demo a 10-Gbit/s version early next year that will be ready to ship by the second half of 2006 in time to catch the 100-Gbit/s wave, which he thinks is vital to the growth of the TOE market (see More 10-Gig Ethernet SANs Planned).Still, the PCI-express card will come months behind Alacritech's and Broadcom's products. There's also the question as to whether Silverback can afford its new goals.

Houssein says his predecessor Danny Biran did a good job of keeping down expenses for the 47-person startup before leaving to run corporate marketing for programmable chip company Altera Corp. (Nasdaq: ALTR) in January.

“Our burn rate is low,” Houssein says. “They were very good in the way they managed things and how much they spent. A lot of startups don’t realize it’s going to be a long haul. These guys recognized that.”

— Dave Raffo, Senior Editor, Byte and Switch