Startup Starboard Storage Cuts Sales Staff, Hangs 'For Sale' Sign

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Starboard Unified Hybrid Storage




Starboard Storage Systems, a startup developer of hybrid storage arrays featuring SSDs and spinning hard drives, has ceased selling products and laid off sales and marketing staff as it hopes to find a buyer, CRN has learned.

Starboard Storage executives Friday said the company is in talks with multiple storage vendors about the possibility of being acquired by one of them and confirmed reports from channel sources that the Broomfield, Colo.-based company has killed off the bulk of its sales and marketing activities while maintaining R & D in preparation for an eventual acquisition of the company.

Starboard, which sold exclusively through the channel, informed solution providers in a letter signed by President Tom Major and dated March 12 that it was "reducing our emphasis on new product sales," according to a document obtained by CRN.

"In connection with a new investment by our existing investor group, Starboard's board has decided to evaluate the interest of potential strategic acquirers of the company. In order to focus on this strategic opportunity, we will be reducing our emphasis on new product sales for the time being," Major wrote in the letter.

Starboard is headed by CEO Bill Chambers, who previously served as founder, president and CEO of LeftHand Networks, which was sold to Hewlett-Packard in 2008 for $360 million.

It competes in a crowded market that includes not only tier-one storage vendors like EMC, NetApp, Dell EqualLogic, and X-IO, but also other hybrid SSD-hard drive array vendors such as Tegile Systems, Tintri, Nimble Storage and NexGen Storage.

The company, which came out of stealth mode in February, 2012, works with approximately 50 solution providers in the U.S.


[Related: Starboard Exits Stealth Mode With Channel-Only Unified Storage]

Major, who jointed Starboard two months ago and is also a LeftHand alumnus, told CRN in an interview Friday, that the company believes in the strength of its hybrid SSD-hard drive architecture, and that hybrid storage arrays will be the dominant architecture in enterprise and midsize business customers.

"We've been blessed with the reseller partners, and disappointed we can't take [the company] forward with them," Major said.

The company in May, 2012 received a $13-million Series B round of funding. The company's investors have since added to that amount, but Major was unable to say by how much.

The company's board of directors examined different possibilities for additional funding and decided an acquisition by a larger storage vendor would be the best option, Major said.

"Over the last few weeks, we have been working with our board in pursuit of another funding round," he said. "Given that, and the inquiries we have received from strategic players, the board decided to pursue talks with those strategic players."

As a result, Starboard is no longer actively seeking product sales, having pared its sales and marketing funds and cut staff, Major said. "But we do have a vice president of sales [Larry Petkus] handling inquiries from customers," he said. "And we are committed to supporting our existing customers."

"As you find new sales opportunities for the Starboard offering, I would ask that you engage [Petkus] for assistance," Major wrote in the letter to solution providers.

Starboard would not disclose how many employees had been cut.

NEXT: Trying To Differentiate Its Hybrid SSD-Hard Drive Tech

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