Leadership changes abound in storage industry

In an attempt to stimulate sales, change the corporate image or possibly raise more venture capital, storage vendors are playing executive musical chairs.

A number of storage companies have appointed new leadership to their executive ranks in recent weeks in an effort to sell more products and possibly raise more venture capital, according to experts.

Software maker Storigen Systems Inc., Lowell, Mass., announced that its board of directors has picked Dennis Hoffman to be the company's first chief executive officer. Promoted from within, the new title comes with new responsibilities for Hoffman, who was already president of the company, which he co-founded in 2000.

Prior to co-founding Storigen, Hoffman led marketing and business development for the storage and networking business at Avid Technology Inc. He was also a strategy consultant with Marakon Associates, and he started his career as an engineer at Polaroid Corp. Storigen has completed two rounds of venture capital funding and has shipped two successive versions of storage software.

Tony Prigmore, senior analyst for the Enterprise Storage Group Inc., Milford, Mass., said that the pace of change and incremental investment in management talent appears steady, despite the obvious increase in available skills.

"There are many storage companies that are getting ready to move from stealth mode to client-attraction mode, and this typically means incremental talent [increases] in sales and marketing management," Prigmore said.

He added that said changes are likely in companies that have had commercially available products for months and have not had much success.

"In these cases, we will always see replacement of managers in an effort to either execute the existing plan better or rewrite the strategy," he said.

Prigmore said that some industry veterans become board members of smaller companies to assist current or former colleagues and investors, stay active in leading edge companies and technologies, and create conduits for other potential business relationships. "All of these have [the] common thread of 'giving back' somehow," he said.

IP storage startup iStor Networks Inc., Irvine, Calif., has named Kevin Daly, CEO of Avamar Technologies Inc. and former chief technical officer for Quantum Corp., to its board of directors, as the company preps its first product. The company is about to launch a wire-speed iSCSI network storage server blade (iBlade) for IP storage. According to iStor, Daly was recruited for his technical prowess.

A big-name board appointment could also be on the way from the newly merged InfiniBand company InfiniSwitch Corp., Westborough, Mass. Terry Dickson, vice president of marketing for Lane15 and now InfiniSwitch, said the company, which merged with software maker Lane15 Software last week, could be announcing a "big-name" appointment to its board in the coming weeks.

Another reason for recruiting fresh blood for management roles is fundraising. Randy Kerns, a partner with the Evaluator Group Inc., Greenwood Village, Colo., said that changes in the board are typically done to help acquire funding. "[Venture capitalists] want either a high-profile name or a person they can trust, an insider if you will, on boards they are investing in," Kerns said.

Companies entice top executives with preferred stock options. "If the company is successful, they make a bundle," he said.

However, Kerns added, many of these high-profile names may have lofty titles in their resumes, but it's possible they've never actually developed a successful product.

Let us know what you think about the story. E-mail Kevin Komiega, News Writer

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