Zambeelians Reemerge at StorAD

At the behest of Zambeel's primary VCs looking to salvage at least some of their investment, a group of about two dozen former Zambeel employees is starting a new venture, StorAD Inc., that will try to work the distributed NAS technology the defunct startup developed into some kind of software offering, Byte and Switch has learned.

Zambeel, which built a high-scale, clustered NAS system based on commodity components, officially shut its doors sometime last month. Founded in September 1999, it had raised more than $66 million from Kleiner Perkins Caufield & Byers, New Enterprise Associates (NEA), and other VCs (see Zambeel Znuffed Out).

According to an industry source familiar with the company, Zambeel in mid-April raised a $12 million round of additional funding led by Apex Venture Partners, with both Kleiner Perkins and NEA participating. However, one of the conditions of the funding was that Zambeel be reborn as a new company so that it could shed its debt liabilities. Zambeel had significant amounts of both secured and unsecured debt, says our source.

"There was no other reason to start a new company other than screwing the debt holders," says the source. Kleiner Perkins partner Bernie Lacroute, who was on Zambeel's board of directors, did not respond to requests for comment.

StorAD purchased the intellectual property of Zambeel at an auction held at the end of April. A little bit of robbing Peter to pay Paul, then?But a source at one of Zambeel's VCs, who did not want to be identified, says most of the creditors supported the public auction of assets and the structure that emerged. "There are plenty of disgruntled 'sources' in these situations," the VC says.

Sources say that EMC Corp. (NYSE: EMC) had shown interest in Zambeel's technology. EMC CTO Mark Lewis was supposedly seen visiting its Fremont, Calif., offices earlier this year. Lewis, incidentally, knows Zambeel CEO Darren Thomas from their Compaq days. But while EMC was "marginally interested," it didn't offer much for the IP, says our source.

Some of Zambeel's core engineering team has joined StorAD, led by chief architect Bill Earl. Also attached to the project is John Galloway, previously the senior engineer at Zambeel who lead the group that designed and implemented the Network Data Management Protocol (NDMP) backup and recovery code. The company's URL, www.storadinc.com, isn't functional yet but it was registered to Galloway on May 2.

But other Zambeelians have already started scattering to the winds. Former Zambeel CEO Thomas is evidently not involved with the new company. And many other key people -- including lead system architect Jeff Tofano -- have declined to join StorAD, according to our sources. Several of Zambeel's top software engineers have joined still-stealthy Pillar Data Systems, the storage startup backed by Oracle Corp. (Nasdaq: ORCL) CEO Larry Ellison (see Larry's Stealth Storage Startup).

So what's StorAD's game? It's difficult to tell at this point, but we'd expect it to have something to do with NAS. Zambeel had developed a distributed file system, which allowed it to (supposedly) cluster multiple systems together, providing a pool of up to 200 Tbytes.If StorAD is considering making a software-only product out of Zambeel's distributed file system technology, it will join a crowd that has generally seen limited success to date. Other software startups in this space include Scale8 Inc. (which is now attempting to sell hardware integrated with its NAS) and Sistina Software Inc.; hardware players include Spinnaker Networks Inc. and Panasas Inc. Meanwhile, distributed file system startup Acirro shut its doors last fall (see Scale8 Turns to NAS Hardware and Acirro Hits Zero).

NuView Inc. is one of the few in the next-generation NAS software area that has been making steady progress. Note that NuView does not sell a file system; rather, its metadata server integrates with existing NAS systems.

It remains to be seen what -- if anything -- StorAD actually turns out. What's indisputable, though, is that the company has a less ridiculous-sounding name this time around.

Todd Spangler, US Editor, Byte and Switch