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Adaptec Agonistes: Page 2 of 3

“While we knew that April and May were slow months for Adaptec, it is disappointing to see that business did not ramp to a level in June that would allow Adaptec to reach its previous targets,” analyst Wes Cummins of B. Riley & Co. Inc. wrote today in a note to clients. “We had expected last quarter to be a low point for the company as they worked through several issues including the late delivery of system products to IBM and an enterprise drive shortage in the industry.”

The extended slump comes as Adaptec searches for a CEO to replace Bob Stephens, who retired in May (see Adaptec CEO Retires). Adaptec board member D. Scott Mercer is serving as interim CEO. Industry insiders suspect the permanent job may go to Sundi Sundaresh, who returned to Adaptec as VP of marketing and product development May 20 and was promoted to president six days later when Stephens quit (see Former Candera CEO's Back at Adaptec). Sundaresh left Adaptec in 2002 to become CEO of storage controller startup Candera, which folded last December (see Candera's Closed).

Adaptec also lost the head of its storage group in April, when Ahmet Houssein left to become CEO of iSCSI HBA startup Silverback Systems Inc. (see Silverback Signs CEO).

The new CEO will have to try and steady a ship that began listing near the end of Stephens’s tenure. The company was late in delivering dual controller systems to IBM, and revenue from its acquisition of NAS vendor Snap Appliance were below expectations in the first three quarters following the $100 million transaction (see Adaptec's $100M Snap Decision).

— Dave Raffo, Senior Editor, Byte and Switch