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Verari Systems staff join alumni network amidst 'restructure'

Speculation abounds over firm's future

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Verari Systems is undergoing a "restructure" that has prompted speculation the boutique server maker has shut up shop and led workers to set up an alumni network.

"Currently, we are working on a communication statement to release during our restructure," Mike LaPan, director of marketing and communications, explained in an email to El Reg.

Unnamed ex-employees of Verari have set up a site called VerariAlumni.com, which 65 Verari employees have joined (including LaPan, right at the top of the list) as of late last week. But this site likewise neither confirms nor denies that Verari has had layoffs or closed its doors.

The Miscellaneous page on this site, which was launched on December 10, originally said "Since Verari is no longer around, I’ll be using this area to communicate anything I believe my peers may need to know about, or may find of interest." But it now reads "As things begin to restructure for all of us, I'll be using this area to communicate anything I believe my peers may need to know about, or may find of interest."

A Twitter feed from someone called VerariGuy was the original source of the rumours, which last Wednesday afternoon said: "Well everyone, #Verari Systems is now dead. The doors are locked, and people have taken out anything not nailed down." The following morning, December 11, the Twitter feed said: "Conference call at 9am PST to let everyone know we're done. If I knew I wasn't talking to myself I'd have half a mind to post the phone #."

Another post claimed that everyone excepting about two dozen employees were laid off. Anonymous posts over at insideHPC suggest that the company is trying to sell assets and to configure a new company after a restructuring.

None of this has been confirmed by Verari thus far, although LaPan hinted that something like this was in the works.

Verari was founded in 1996 in San Diego as a computer parts retailer and in 2002 decided to build its own rack-mounted servers and changed its name to RackSaver. In 2004, the company invented vertical cooling for its racks (similar to what Rackable Systems offered) and bought a company called MPI Software for its management tools, pocketed some venture capital, and changed its name to Verari Systems. In September 2004, when the company pulled in $13.3m in a second round of funding (for a total of $34.2m), the company had 275 employees and 4,000 customers. Carlyle Group led that second round of funding, and original investors Sierra Ventures, Voyager Capital, and Celerity Partners kicked in funds.

In June 2006, David Wright, formerly executive vice president of strategic alliances and global accounts at disk array maker EMC, was tapped to be chief executive officer at Verari and charged with growing the company; Dave Driggers remained chairman of the board and CTO of the company he founded. In June 2007, when Carlyle, Voyager Capital, Sierra Ventures, and an unnamed "strategic investor" kicked in a $20m third round of funding, Wright was named chairman and Driggers was bumped down to just being a board member while keeping his role as CTO.

Verari's product line currently includes BladeRack blade servers, which used a standard motherboard to essentially turn a standard server rack into a giant blade server with vertical, rather than front to back, cooling; El Reg drilled down on the Xeon 5500-based BladeRack 2 lineup last October here, when Dave Driggers said that the company was selling more than $100m in servers a year. The company also peddled DataServer storage blades and Forest data center containers.

Interestingly, Verari was just bragging on December 1 that it had partnered with Cisco Systems to deliver Cisco's "California" Unified Computing System blade servers to NASA's Ames Research Center (a stronghold of computing for Silicon Graphics) inside Verari's Forest containers for NASA's Nebula cloud computing platform. Notice how NASA Ames didn't buy Verari blades?

If the rumours are true, what Verari probably needs is to find a sugar daddy like the defunct Silicon Graphics did in Rackable Systems last year - Rackable bought SGI's assets after SGI filed for bankruptcy, then took the SGI name. Supercomputer maker Appro International, which already makes its own blade and rack servers, doesn't have a containerized offering, and is conveniently located in California, north of San Jose. ®

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