AUSTIN, Texas OmegaBand Inc., a startup working on an Infiniband server I/O consolidation system, has laid off "all but a few" of its 39 workers after running out of cash before securing second-round financing, the company said.
OmegaBand had raised $16 million in its initial financing round and was close to unveiling its beta system, but ran out of cash and was forced to lay off about 35 people, said vice president of marketing Wade Campbell.
The Austin-based company is looking for a buyer of its intellectual property that might also rehire its core technical staff, Campbell said. OmegaBand competes with companies such as Voltaire Inc. (Boston), Infinicon Systems Inc. (King of Prussia, Pa.), and Topspin Communications Inc. (Mountain View, Calif.).
Campbell described OmegaBand's intended product as a combination Infiniband switch and protocol offload engine that removed the I/O bottleneck from server architectures. "Our system would terminate the incoming TCP traffic, for example, and translate it to the Infiniband protocol, removing the TCP overhead from the server," he said.
As bigger pipes such as Gigabit Ethernet deliver TCP traffic at ever-increasing speeds, termination and translation of that traffic will consume much of the processing power of servers, he said. "TCP coming in at 500 Mbits per second can consume all of the processing power of a typical dual-processor Pentium-based server, and this problem is just going to get worse," he said.
Chief executive officer Wendy Vittori said the company's search for second-round financing had dragged on too long. Vittori had joined OmegaBand earlier this year and refocused it on server I/O consolidation.
Though a lead second-round investor had been located, first-round backer Telesoft Partners (San Mateo, Calif.) was not able to come to terms with that investor in time to keep OmegaBand operating, she said.
"We found a top-tier lead investor committed to our value proposition and to funding the next round. However, the difficult economic environment prolonged the syndication process beyond the point we were able to sustain operations, even with support from our existing investors," Vittori said.