Akara Hacks Headcount

Optical storage system provider Akara Corp. is the latest in the SAN market to slash its headcount, laying off 42 employees, or roughly a third of its workforce, this week. The across-the-board layoff resulted in a final headcount of 80.

”No one is immune to these market conditions,” said a spokesperson for Akara, which received $30 million in funding just three months ago. “We have a conservative approach to business and we are preparing the company for next year,” she said. “The plan is to make sure we get through 2002.”

As well as cutting its headcount, this preparation also includes refocusing on who its customers are. Akara makes a multiservice edge switch that provides VPN (virtual private network) and subscriber management services as well as Sonet, DWDM, and Fibre Channel connectivity. It was originally targeting the storage service providers (SSPs), but since this market collapsed it has changed tack and is now selling its switch to enterprises (see WorldStor Slashes Headcount).

”We are going directly to enterprises, as the SSPs are not doing well now,” a company official said. Akara hopes to convince the top Fortune 50 companies, specifically banking and financial institutions, to deploy the switch for private-line Fibre Channel services as well as wide area connectivity via its DWDM and Sonet capabilities (see Akara Goes Wide ).

Others, like Nishan Systems Inc. and Cisco Systems Inc. (Nasdaq: CSCO), are banking on these companies adopting IP to transport storage data across wide area networks. But Akara doesn’t believe this will work. “IP plays a roll in storage but not moving business-critical data… There are too many issues with latency," Akara says. "Goldman Sachs & Co. is not going to use IP to move precious financial data around.”

Time will tell who wins this one, but it looks as if Akara is conserving its strength for a long fight.

The company is taking to the road later this month with Fibre Channel and optical allies -- ONI Systems Inc. (Nasdaq: ONIS), Brocade Communications Systems Inc. (Nasdaq: BRCD), and GiantLoop Network Inc. -- to promote the FC-over-optical message across the U.S. (see Storage Seminars Kick Off).— Jo Maitland, Senior Editor, Byte and Switch http://www.byteandswitch.com