Tom Alexander, CEO, Intransa

Nobody envied Tom Alexander when he took over as Intransas CEO last July. (See Intransa Trades In CEO.)

In the months leading to Alexander’s replacing Avi Katz as CEO, the IP SAN startup had undergone an executive exodus that included the loss of founder and CTO Peter Wang, not to mention the CFO and VPs of engineering, global operations, and marketing. (See Intransa's in Transition and Ex-Intransa Trio Aids Startups.) The revolving door lent credence to talk that the startup was rapidly burning thorough the $25 million in funding it secured in August 2004.

To make matters worse, the company’s influential chairman Eric Benhamou departed soon after hiring Alexander.

The departures also came at a sensitive time. iSCSI was beginning to win acceptance in SANs, but established Fibre Channel players were getting into the game. And rival startups EqualLogic and LeftHand Networks were claiming significant customer gains.

But Alexander isn't one to shrink from a challenge. In his view, the timing was good when he came in. “I was probably lucky to come into this company at the right time,” he says. “Two years ago, I don’t think the market was ready for IP SANs.”Today, he says Intransa is a stable company, and he credits in part his decision to end the management changeover shortly after his arrival. “Any [media] mention of Intransa talks about management changes,” Alexander says. “But there haven't been any in the last six months. I did not bring in my own team or my own players.”

Alexander didn't come to Intransa as a neophyte. His previous job was as entrepreneur-in-residence at one of Intransa’s VCs, U.S. Venture Partners, which could come in handy if the company seeks more funding. He was also president and founder of LuxN, an optical transport startup acquired by Sorrento Networks in 2003. (See Sorrento Bids for LuxN.)

We recently spoke to Alexander about his new job and plans for his company and the IP SAN landscape. Read and enjoy. (See 2005 Top Ten: On the Hot Seat).

— Dave Raffo, Senior Editor, Byte and Switch

Byte and Switch: You came to Intransa from one of its investors, U.S. Venture Partners. Were you involved with Intransa while at the VC firm?Alexander: No. I was at U.S. Venture Partners, but Intransa was not one of the companies I was involved with... I consider myself a startup junkie.

Byte and Switch: How important was it for you to stabilize Intransa’s management team?

Alexander: Any [media] mention of Intransa talks about management changes. But there haven't been any in the last six months. I did not bring in my own team or my own players. I had a good team when I got here. [Marketing VP] Doug Rainbolt and [VP of engineering] Nitin Donde just came on board. The only new player is myself. Granted, there were changes in the organization in previous quarters. Most of you guys notice that and point it out again and again. I did not change any of the team, and we are marching ahead. [See Intransa's in Transition and Intransa Appoints Engineering VP.]

Byte and Switch: What about Eric Benhamou, who was Intransa’s chairman since 2000 and left after hiring you?

Alexander: Eric was on the board. He’s not part of management. The directors set strategy and let the management team run with it. Eric was only one member of the board. He might have played an active role, but that’s before my time, I’m not aware of it. I made it clear to the board that if you’re bringing in a project administrator or project manager, I’m not the guy. I’m the CEO. I run the show. I take your advice and implement it. If they don’t like my implementation they can bring in a new CEO.But Eric had also been private investor [in Intransa] and he still gives me advice. I spoke to him two weeks ago.

Byte and Switch: What have you changed since taking over?

Alexander: We’re increasing our presence in the U.S. space, putting more salespeople in the field. The last few years we concentrated on the international side, mostly China and India.

Also, there’s been significant change in our product mix. We introduced a new product at SNW, the IP2000 with Raid 5 for SMBs. More important, we are getting the support of Microsoft and working closely with them to get the necessary certification to focus on Microsoft applications. That is key to establishing a presence in the U.S.

Byte and Switch: What did you see as your main goal when you took over as CEO?Alexander: The most important thing to concentrate on was increasing our presence in the U.S. marketplace. We needed to get more in bed with Microsoft. We needed more direct salespeople along with resellers and system integrators. We concentrated on co-development with a partner in Asia [Huawei-3Com] that increased our profit percentage. [See Intransa Expands in China.]

Byte and Switch: Do you expect certification for Microsoft’s Simple SAN program? [See Microsoft Sets Sights on SANs.]

Alexander: We’re very close, hoping for this quarter.

Byte and Switch: You say your revenue doubled last year over 2004. How long will it take you to become profitable?

Alexander: We’ll be profitable in 2007, not 2006. We are planning to invest more in sales. Our investors are standing behind us.Byte and Switch: Will you need another funding round?

Alexander: Possibly. But if my assumption of growth is correct, I won’t need that. 2005 was a very, very good year, even though I was here for only six months of that. Last quarter was double the revenue of the previous quarter.

Byte and Switch: What sets Intransa apart from other iSCSI players?

Alexander: “The significant difference is our distributed architecture. We give [customers] a much better story on the scaleability side of it. If they have an Ethernet switch, they can use that to connect. Our customers can just plug in another disk enclosure to the switch. If you have a brick only, you don’t have that flexibility.

Byte and Switch: How much competition do you see out there from Fibre Channel vendors looking to sell iSCSI systems?Alexander: We’re competing mostly against other startups. If our guy goes into an enterprise account and sees an EMC account, he goes away from it. We look for a believer in IP SANs.

Byte and Switch: Is there a bright future for IP SANs?

Alexander: Based on what I saw before July and after six months on board here, I still believe the answer is yes. I lived through the Ethernet-Token Ring days. Ethernet won. Now IP is competing against Fibre Channel, and people like [Cisco CEO] John Chambers are doing great evangelism for me. I also see 10-gig on the horizon, which should drive more demand. That brings us more into high midrange applications. I was probably lucky to come into this company at the right time. Two years ago, I don’t think the market was ready for IP SANs.

Byte and Switch: Is the enterprise ready for IP SANs today?

Alexander: Our customers have been mostly SMBs until now. In SMB accounts, CIOs are very budget sensitive, they’re very comfortable about IP. The enterprise is held strongly by Fibre Channel players, and to go in there takes a tremendous amount of IP SAN evangelism. If I try to grab primary storage, established players are entrenched so strongly they won’t let me come in. You hear the usual scare stories about iSCSI. But for secondary storage, we can come in.Byte and Switch: Why will the entrenched vendors let you in with secondary storage?

Alexander: Our price performance will be a lot better than these established guys. Some of these new players in Silicon Valley in archiving and retrieval, like Asempra or Mimosa Systems, when they sell software, customers are asking them to recommend storage to put in. We are working closely with these companies [Asempra, Mimosa, and others], and they recommend us. But I need to show much better dollar-per-terabyte to customers than Fibre Channel is showing if I want to get into this game.

Byte and Switch: When will iSCSI be able to compete on performance with Fibre Channel?

Alexander: The moment we have 10-gig connectivity.

Byte and Switch: When do you expect that to happen?Alexander: In the second half of ’06. We expect a lot of growth in 2007 to come from the enterprise. We’ll try to get into the enterprise by coming through the secondary storage side.

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