Troika Strikes Back

Troika Networks is preparing to surface for a second shot at the storage networking market, after a year in obscurity developing a "super appliance," according to Bill Terrell, the company's CEO and cofounder.

Remarkably, Troikas original VC’s -- Amerindo Investment Advisors Inc., Draper Fisher Jurvetson, Dynafund Ventures, and Windward Ventures -- are stumping up for a fourth round of investment in the Westlake Village, Calif.-based startup. Within the next few weeks, Troika will announce approximately $14 million of financing, bringing its total investment to date to $68 million. Two new VCs and a strategic partner are also expected to join the round.

How has Troika pulled this off, you ask, when its first effort -- building SCSI-to-Fibre Channel host bus adapters -- ended up in a $10.5 million fire sale to JNI Corp. (Nasdaq: JNIC)? (See JNI Buys Troika's HBA Software.)

"Troika has traction with at least two major storage OEMs and is expected to announce general availability of its product this month," says Rich Gammill, an associate at DynaFund.

Gammill adds that companies such as EMC Corp. (NYSE: EMC) and Hewlett-Packard Co. (NYSE: HPQ) don’t want to be tied to one or two sources for a product, as that way they have no control over pricing. "Brocade Communications Systems Inc. [Nasdaq: BRCD] was able to use its muscle as the dominant provider of Layer 2 and 3 switches to push people around a bit," he says. "The OEMs don’t want their supplier with so much power, and this new opportunity in intelligent switching gives them a chance to change those dynamics," Gammill says.