A number of notes concerning Azul Systems have reached our inbox - none of them bringing very inspiring news.

Our sources claim that Azul - a maker of specialized Java server appliances - is very much a creature in flux. Azul laid off 45 staff, most of them in India, on Monday, according to one source. Meanwhile, a pair of sources say that Azul mucked up its latest funding round with one investor bailing out, while another investor delivered enough cash to pay off some bills.

Azul's CEO Stephen DeWitt has yet to respond to our request for comment about the layoffs.

In a recent exchange, however, he said that, "Business is good."

"Azul’s solutions are driving some amazing apps in some of the most sophisticated environments out there," he said. "And, as always, we are continuing to push the R&D horizon. Plenty of news on that front in the months ahead."

DeWitt also confirmed that Azul is going through at least some kind of transition. It recently hired a new SVP of sales in Evan Ellis, a new VP of hardware in John Brennan and a new VP of marketing in Ram Appalaraju.

Azul crafts server appliances based around its own multi-core chips. The systems - 768 processors and 768GB of memory - scream through Java code. The start-up has also been leading the push around transactional memory.

The company recently settled litigation with Sun Microsystems. A number of Sun staff went to Azul, and Sun argued that Azul had made too liberal use of ideas around multi-threaded software and multi-core chips. Azul fought back for awhile before agreeing to the settlement. As we understand it, Sun now holds close to 5 per cent of Azul.

It's hard to imagine folks like Ellis and Brennan jumping (http://www.azulsystems.com/press/052407_evan_john.htm) into the executive ranks in late May if Azul was really in a death spiral. That said, it sounds like the litigation and settlement with Sun derailed Azul's latest funding efforts to a degree, causing the company to miss some payments to suppliers and fostering a bit of ill will towards the start-up.

Er, layoffs never help either.®

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