Troika Strikes Back

Troika Networks is preparing to surface for a second shot at the storage networking market, after a year in obscurity developing a "super appliance," according to Bill Terrell, the company's CEO and cofounder.

Remarkably, Troikas original VC’s -- Amerindo Investment Advisors Inc., Draper Fisher Jurvetson, Dynafund Ventures, and Windward Ventures -- are stumping up for a fourth round of investment in the Westlake Village, Calif.-based startup. Within the next few weeks, Troika will announce approximately $14 million of financing, bringing its total investment to date to $68 million. Two new VCs and a strategic partner are also expected to join the round.

How has Troika pulled this off, you ask, when its first effort -- building SCSI-to-Fibre Channel host bus adapters -- ended up in a $10.5 million fire sale to JNI Corp. (Nasdaq: JNIC)? (See JNI Buys Troika's HBA Software.)

"Troika has traction with at least two major storage OEMs and is expected to announce general availability of its product this month," says Rich Gammill, an associate at DynaFund.

Gammill adds that companies such as EMC Corp. (NYSE: EMC) and Hewlett-Packard Co. (NYSE: HPQ) don’t want to be tied to one or two sources for a product, as that way they have no control over pricing. "Brocade Communications Systems Inc. [Nasdaq: BRCD] was able to use its muscle as the dominant provider of Layer 2 and 3 switches to push people around a bit," he says. "The OEMs don’t want their supplier with so much power, and this new opportunity in intelligent switching gives them a chance to change those dynamics," Gammill says.It’s an interesting point, but how many intelligent switch suppliers can the market support? There are at least seven of them last time we counted:

Troika's Terrell says the company's "super appliance" isn’t like the above switches, as it combines the scaleability of a switch with the software functionality of an appliance. It could be used as a fabric switch, running software from a third-party software vendor, or embedded in an array, depending on how the OEM wants to use it, he says. This is still an unresolved question among the major storage array suppliers, which are deliberating over where functionality such as virtualization, remote replication, snapshotting, and volume management should reside.

"Troika’s approach is not to be a standalone switch in the network... But it’s also partnering with the software players," says Gammill. It sounds to us like the company is hedging its bets, which maybe isn’t a bad thing at this point.

All of the company's three founders [ed. note: how appropriate!] -- including Terrell, VP of hardware engineering Wayland Jeong, and VP of corporate resources Kevin Cox -- are still there. Troika, founded in 1998, has a headcount of about 70 today. The company's first CEO, Alan Skidmore, quit after the JNI transaction, as he disagreed with Troika's new direction (see Troika CEO Quits).— Jo Maitland, Senior Editor, Byte and Switch