Verari Goes Off the Rack

Blade server outfit strikes OEM deal with Engenio, in meeting of strangely named companies

July 7, 2004

3 Min Read
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Another marriage of storage and blade server technologies took place today, as Verari Systems Inc.announced an OEM deal with Engenio Information Technologies Inc.

Verari will sell Engenios Fibre Channel and SATA storage subsystems under its brand, with a “Powered by Engenio” tag.

Verari, a nine-year-old company that changed its name from RackSaver in April, primarily sells blade servers. CEO David Driggers says more and more of its blades are connected to storage systems, so he decided to increase Verari’s involvement in storage. The company previously had a reseller agreement with Engenio but now will support Engenio systems as well as sell them.

“We sell a lot of blades, and most of our customers buy storage to attach to them,” Driggers says. “Quite a lot of our servers get attached to Engenio. We’re looking at storage as a significant part of our revenue in 2005.”

Driggers isn't alone. The market for storage-based blades is gaining momentum, and a growing number of vendors of storage arrays, switches, controllers, and other SAN gear are looking to get their products into blade form. With the right OEM, SAN vendors can capitalize on the drive to consolidate servers and storage in data centers.Verari changed its name because it wanted a new identity. RackSaver no longer fit after the company shifted from predominantly selling rack servers to blades beginning in 2001, Driggers says. Blades now account for more than 80 percent of Verari’s server sales. The 250-person company sells mostly to oil and gas, entertainment, and electronic design automation vertical markets. Its customers include Boeing, ConocoPhillips, Industrial Light and Magic, Lockheed Martin Corp., and NASA.

So what’s the name Verari mean? Founder Driggers says the company has a patent for its vertical cooling system, and it sells to vertical markets. “And ver means truth in Latin,” he adds. As for the back end of the name, “Aria means all voices or instruments coming together as one. So we combined ver and aria, and dropped the a.

"Also, we did a Google search and nobody had that name."

Engenio is also a new name, even though the company, citing a quiet period before going public, isn't offering any fanciful etymologies. Formerly known as LSI Logic Storage, it was christened in May in preparation for an IPO, which is expected this month as LSI Logic Corp. spins it off (see LSI Logic Spins Off Storage Systems and LSI's Storage Sub Plans IPO).

Engenio sells its systems mostly through OEMs, which include IBM Corp. (NYSE: IBM), Storage Technology Corp. (StorageTek) (NYSE: STK), the Teradata division of NCR Corp., and Silicon Graphics Inc. (SGI) (NYSE: SGI).Verari and Engenio have something in common besides their blade ambitions and their oddball monikers: profitability. Driggers says Verari has been in the black since the start, and revenue has close to doubled in each of the last four years to more than $40 million in 2003. The startup survived eight years before receiving its first venture capital funding in June 2003 -- a $14 million haul to expand research and development, sales, and marketing. It also acquired cluster management software company MPI Software Technology in April.

The San Diego, Calif.-based company might also go public one day, if it can survive in a blade server market dominated by IBM and HP. It also will try to make more inroads into storage. “We plan to continue to expand storage across SAN and NAS platforms,” Driggers says. “It’s a natural evolution.”

— Dave Raffo, Senior Editor, Byte and Switch

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