Incipient Looks to Deal

Incipient Inc.
has a new board chairman who is expected to help the company find the big OEM deals it needs to go to the next level, according to company sources. But some in the industry wonder if the Waltham, Mass., startup is trying to make itself a more attractive acquisition target.

The new chairman is Peter Levine, managing director at Mayfield
venture firm and no stranger to storage company boards. Levine is CEO of Mendocino Software

and sits on on the board of Actona Technologies Inc. and OuterBay Technologies Inc.
(see Mendocino Scores $15M and Actona Attracts Additional $10M). Levine is also a former Veritas Software Corp. (Nasdaq: VRTS) executive, and Incipient honchos say he has the industry contacts to help secure OEM deals for their software to virtualize intelligent switches.

"Peters wealth of knowledge and industry experience will help guide Incipient as we take our products to market and secure additional distribution partnerships with storage industry leaders,” Incipient CEO Ric Calvillo said in a statement.

One insider says Incipient is closing in on an OEM deal with a major storage company. Others say the startup is caught in a time crunch and needs to be sold to survive. While Incipient’s technology is well thought of, and the intelligent SAN switch market is expected to take off eventually, it probably won’t start to trickle revenue until the end of this year at the earliest (see Report: Switch Is Best for Virtualization).

“I would imagine their only strategy is to be bought by somebody,” said an executive of a hardware company that has done testing with Incipient’s software. “They have to be bought -- it’s hard to build a company doing what they’re doing.”