Intransa's in Transition

IP SAN startup loses engineering and marketing VPs plus CFO as market heats up

April 29, 2005

3 Min Read
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Even as IP SANs are poised for rapid growth, the executive suite at startup Intransa Inc. sports a revolving door.

Intransa has lost its marketing VP, engineering VP, and chief financial officer in the last two months. All three executives joined Intransa last year (see Sun Marketing Vet Joins Intransa and Intransa Gets New Engineering VP). A source close to the startup says the losses were due at least in part to dissatisfaction with company leadership.

The source says Intransa is burning cash rapidly, and CEO Avi Katz is under fire from the board despite having a strong ally in chairman Eric Benhamou, one of the startups investors who brought Katz on board in 2003 (see Intransa Lands a Third CEO).

One thing Intransa's not burning is time attracting new talent. The company hired Doug Rainbolt from Brocade Communications Systems Inc. (Nasdaq: BRCD) two weeks ago to replace ex-marketing VP Ravi Pendekanti. Peter Wang, Intransa’s founder and CTO, says the company is close to hiring a replacement for engineering VP Robert Weisickle, and is searching for a CFO to replace Greg Ayers.

Wang says he’s unfazed by the departures. “We are pleased in our ability to continue to attract good people to replace them,” he says. Intransa has 100 employees, the same number as last August. Also, Wang says the company has around 200 customers, up from 185 at the start of 2005.Wang and Rainbolt say Katz is strongly entrenched and driving the company forward. “He’s the kind of person you want energizing your company,” Rainbolt says. “I think he never sleeps.”

Analyst Arun Taneja of the Taneja Group calls Doug Rainbolt a “consummate professional” who should help Intransa, but adds that too much turnover is a bad sign. “My sense is that when guys have quick changes like that, it’s an indication of some kind of problem,” he says.

Wang does admit Intransa is considering another funding round, despite bringing in $25 million last August and $74 million since 2000 (see Intransa Scores $25M). “We’re considering our options,” he says. “We have no firm plans but we’re considering funding. It depends on if we can close some OEM deals.” He says Intransa is discussing OEM deals with storage companies to sell its software with their systems.

Intransa, like

EqualLogic Inc. and LeftHand Networks Inc., is viewed as a likely startup to cash in on a crest of IP SAN sales expected later this year. IDC says iSCSI storage revenue went from $19 million in 2003 to more than $100 million last year and forecasts it will hit $296 million this year (see IP SAN Serves Two Masters).

EqualLogic had its own executive change when CEO Jack Boyle left last month. He's been replaced by Don Bulens. At least one analyst says it hasn't hurt the company's prospects. Kaushik Roy of Susquehanna Financial Group says EqualLogic seems to have the edge against the other iSCSI startups in terms of visibility.Among established players, Network Appliance Inc. (Nasdaq: NTAP) is the leader in iSCSI revenue, largely from selling iSCSI targets to its NAS systems (see NetApp Banks on iSCSI). EMC Corp. (NYSE: EMC) and Dell Inc. (Nasdaq: DELL) are also looking to make a splash by selling iSCSI versions of Clariion midrange SAN systems (see EMC to Serve Up IP SANs). Industry insiders say there is still enough room for at least one of the startups to make it.

Taneja says Intransa will have to go through its changes without losing a step, though. "The iron is hot now for the three startups,” he says. “Over the next six months we’re going to start seeing one company start to lead the field and one company lagging behind. Nobody wants to be that company lagging behind.”

— Dave Raffo, Senior Editor, Byte and Switch

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