Incipient Looks to Deal: Page 2 of 4

“They have a nice product,” a storage consultant adds, "but it’s tied to the intelligent switch market, and intelligent switches aren’t shipping."

When they do ship, there will be heavy competition for the startup. EMC Corp. (NYSE: EMC), IBM Corp. (NYSE: IBM), and Veritas are all developing virtualization software for the major switch vendors.

Talk of a sale is nothing new for Incipient. It has been going on for more than two years already (see Incipient Is Latent). Even Incipient people don’t rule it out. “The goal for Ric is to continue to develop the business,” says company spokesman Robert Infantino. “If there is a suitor along the way, we’ll be open to all options. But our focus is on developing and delivering our product.”

Who might be a suitor? EMC and Incipient have a history, as Calvillo sold Conley Corp. to EMC in 1998 and stayed on to run EMC’s software center before starting Incipient in 2001. Rich Krueger, Incipient’s VP of business development, also worked at Conley and EMC. Infantino, who says he is “helping out on marketing” for Incipient, was founder of Astrum, the storage resource management startup that EMC picked up last year after its venture capitalists pulled the plug (see EMC Sucks Up Astrum).

But the time for EMC to buy Incipient has likely passed. One source says EMC came close to buying Incipient once before, but the relationship soured. A financial analyst says Incipient has “a love-hate relationship with EMC” that seems to be in the hate stage now.