Xiran Gets Crossed Out

Another iSCSI TOE vendor is wearing a toe tag.

SimpleTech today said it closed its Xiran division, which manufactured iSCSI HBAs and TCP offload engines (TOEs) but scored no major design wins, generated little revenue, and lost approximately $2 million per quarter.

SimpleTech CEO Manouch Moshayedi says the company forecast no revenue from iSCSI chips for at least 18 months and perhaps not for two years. "That's another $20 million investment," Moshayedi said in a conference call to explain the closing. "We'd rather take the $2 million a quarter and invest it back into SimpleTech."

SimpleTech said it evaluated alternatives, which means it probably tried to sell Xiran. Instead, Xiran met the same fate as its one-time rivals iReady and Trebia, which also closed shop (see iReady to Go, Nvidia Buys iReady, and Trebia Croaks).

Those startups at least found companies to scoop up their assets. Nvidia Corp.

grabbed what was left of iReady for an estimated $6 million; and Emulex Corp. (NYSE: ELX) paid around $2 million for Trebias assets.What's gone wrong? Although iSCSI storage systems are beginning to gain traction, no market has developed for accelerators -- mainly because users find Microsoft’s free software initiator sufficient to run IP SANs.

Startup Silverback Systems Inc.is hoping to ride a partnership with Intel Corp. (Nasdaq: INTC) to success, while Adaptec Inc. (Nasdaq: ADPT) and QLogic Corp. (Nasdaq: QLGC) continue in the space.

According to SimplTech’s SEC filings, Xiran had a trickle of revenue in the final quarter last year. However, it showed a loss of around $2.5 million with no revenue in the first quarter of 2004.

Xiran folds just six months after announcing its second-generation iSCSI HBA built around its DirectPath protocol acceleration technology (see Xiran Announces iSCSI+ Accelerator).

SimpleTech, which makes Flash and DRAM memory cards, purchased Xiran in 2002. Xiran was formerly known as Irvine Networks.— Dave Raffo, Senior Editor, Byte and Switch