Egenera CEO Sticks Up for Startups

The new CEO of startup Egenera Inc. says companies like his are in a better position to sell products for consolidating data-center equipment than are larger vendors with a stake in those data centers.

In an interview with Byte and Switch today, Robert M. Dutkowsky, who joined Egenera earlier this month from software maker J.D. Edwards, now part of PeopleSoft Inc. (Nasdaq: PSFT), said it doesn't make sense for companies that sell Unix boxes to go back and try to sell blade-server consolidation and virtualization for those boxes.

Egenera makes a blade server with its own virtualization software and optional virtualization OEM'd from VMware, now part of EMC Corp. (NYSE: EMC). The goal of its BladeFrame system is to replace multiple Unix servers with a set of diskless processing blades linked by a proprietary high-speed connection and equipped with Linux-based software.

The blades create a pool of virtualized processing for applications, which Egenera says is cheaper to maintain and manage than bunches of Unix servers. The BladeFrame system can be connected via Fibre Channel or 10/100/Gigabit Ethernet to SAN or NAS systems (see Egenera Slices Into NAS and Grid Networking).

"This is classic disruptive technology. It changes the game. It changes the way the customer thinks about how they're going to run the infrastructure. You can't have disruptive technology and an installed base at the same time," he says. "The cognitive dissonance is too great."From Dutkowsky's viewpoint, companies like Hewlett-Packard Co. (NYSE: HPQ), IBM Corp. (NYSE: IBM), and

Sun Microsystems Inc. (Nasdaq: SUNW), which sell servers as well as blade-server technology to replace those servers, are operating at a disadvantage.

"Take IBM, for example," he says (Dutkowsky worked for IBM for 20 years). "Great company, great technologies, great presence -- and 100 years of legacy positioning with customers around the world. IBM can't go in and say 'Throw out those AS/400s and mainframes.' They have to transition all those customers."

Predictably, IBM says that's not a problem. "BladeCenter is ideal for server consolidation, but there are times when larger boxes are required as well. IBM offers choices across the board," says spokeswoman Lisa Lanspery.

Indeed, larger vendors typically turn Dutkowsky's argument on its ear by maintaining they have the means to support interoperability and upgradeability across a range of established products, while startups can't.

Egenera's starting to look less like one of those enfeebled startups, however. The company has made headlines lately by scoring new funding, and execs acknowledge plans for an IPO this year (see Egenera Generates $30 Million and It's Raining VC Money). Dutkowsky acknowledges that goal is still in the works, but he prefers to hedge his bets by being more general about the company's future. Growth is the goal, he says.Does that mean Egenera might be open to acquisition or merger as well as IPO? After all, Dutkowsky is a veteran of business combinations.

Well, anything's possible, he concedes. "The board brought me in to take the company to the next level. Opportunity will help us decide what the next level is. The worst thing for a company is to get forced into something. We want to never get into getting our hand played for us."

Read the full Byte and Switch interview with Dutkowsky: here.

Mary Jander, Site Editor, Byte and Switch