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Storspeed -- heading for a speedy exit? *Updated*

We are hearing from sources that NAS caching and monitoring startup Storspeed is already closing its doors, just six months after coming out of stealth.

Reached for comment today, Storspeed founder and vice president of business development Greg Dahl declined comment but said the company may make a public statement next week.

It’s still unclear what the problems were that would have led to the company’s quick demise, but our sources say the appliance didn’t work correctly. “They were in business since 2007 and did not have a stable, working product,” said one source familiar with the company. “The investors lost confidence in their ability to do a re-work.” This source also told Storage Soup the company has already laid off employees. Storspeed did not have paying customers when it announced its SP5000 appliance in October.

Update: An anonymous tipster sent us this hint after this blog was originally published: “Storspeed closed the doors last week on Thursday. The product was indeed stable and did work correctly. One of the investors pulled out and caused a domino effect. All employees were laid off. The IP is for sale.”

For a startup to source its own hardware rather than focusing on developing software as Storspeed did is an expensive proposition. To gain adoption among enterprises with an appliance that sits in the data path is a tough row to hoe for even the best of technologies. Combine that with the effects of the economic downturn, and there could be a potpurri of reasons for this early exit. Hopefully we’ll know more soon.

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