Startups Roll Heads, Reorganize

Don't be fooled: Despite recent IPO bids and acquisitions, not all private storage companies are in the pink.

At least a few continue to have growing pains associated with startups. MaXXan, StoredIQ, and Crosswalk recently made unannounced changes at or near the top of the management queue.

MaXXan's changes were the most sweeping. The virtual switch-turned-encryption-device startup dumped CEO Nelson Bye, sales VP George Vaiser, and marketing VP Jeff Whitney last week as part of what one employee called a "significant reorganization."

Founder and chairman Ray Kao, who was interim CEO before hiring Bye, is back at the helm. Kao ran MaXXan after the board forced out Vic Mahadevan in January of 2005, before Bye was promoted to CEO. (See MaXXan Seeks CEO and Sales.)

The three execs hadn't been in their jobs for long. Bye joined the company as president and COO last November and was promoted to CEO less than three months ago. (See Maxxan Names CEO.) MaXXan hired Vaiser and Whitney in January 2006. (See MaXXan Adds Execs.)A source with knowledge of the company said the changes come as MaXXan "regroups around its product offerings."

Product marketing manager Greg Farris says MaXXan is undergoing a change of strategy. He says it remains committed to the encryption product it announced in May but is making changes that will delay its widespread release. "Our focus is still primarily storage security," Farris says. "We're encrypting data at rest, that hasn't changed. We need to make the product more mature, and we're still working out our release schedule."

MaXXan envisioned its appliance as an intelligent switch for virtualization but decided to lead with security when the storage virtualization market was slow to develop. Last May it launched CipherMax, an encryption product consisting of a key management system and a line card that plugged into its switch.

Meanwhile, data classification startup StoredIQ has also dismissed its CEO after a few months on the job and replaced him with its chairman. Sources say Dave Davenport, who joined the company from Copan in February, was let go after failing to complete a funding round on his watch. (See StoredIQ Hires Former Copan CEO.) New CEO James Schellhase was previously general partner of VC firm Techxas Ventures, StoredIQ's major investor.

StoredIQ, which has a total of $6 million in funding, watched rivals Kazeon, Njini, and Scentric announce funding rounds this year while EMC made its push into data classification. (See Kazeon Gets $21M Venture Boost, Njini Granted $13M, Scentric, and EMC Peels Back IIM.)Crosswalk said good-bye to two of its founders, VP of strategic marketing Rob Kelly and solutions VP Mark Stratton. Industry sources say they were pushed out by the other founder, CEO Jack McDonnell, two years after the three McData expatriates started Crosswalk. Crosswalk marketing SVP Gary Francis says their departure over the last few weeks was a result of the company's switch in focus from resource management software to a storage system. (See Crosswalk Flips to File Side and Crosswalk 'Realigns'.)

"We refocused the company and made some adjustments," Francis says. "Rob and Mark felt it was time to do something else."

Francis says Crosswalk is committed to its iGrid product, with 12 units in production and plans to roll out version 2.0 by the end of the year. Crosswalk is no longer selling its original Crosswalk Storage Manager (CSM) product. (See Crosswalk.)

— Dave Raffo, Senior Editor, Byte and Switch