Xio, the storage brick company, has sent its CEO upstairs, brought in a replacement CEO and lost its sales head. It's not quite a normal day in the executive offices.
Xiotech makes HyperISE combination SSD and disk drive enclosures with clever software to enhance component reliability, boost performance and tier data between the disks and SSDs. Its CEO was Alan Atkinson, two years in post, with a funding round completed in August, and the company recently rebranded from Xiotech to Xio. All ready to go to the next level, as they say, you might think.
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But, in a surprising turn of events, Atkinson has become chairman of Xio's board, replacing Ken Hendrickson, and John Beletec comes in as the new CEO. Strangely Beletec, 59 years old – a bit old for the job by the way – has no direct storage industry experience whatsoever. He has a nine-year involvement with Oak Investment Partners at venture partner level though, and Oak has many millions of dollars invested in Xio – plus board-level representation.
Beletec has had CEO and board chairman roles at various technology companies, 25 years' worth of CEO and president-level experience in fact. We are told he guides management teams and helps them devise and achieve top-level strategic and operating aims. Why should he want to return to the stress and strains of a hands-on, full-time CEO job?
This CEO change bears many of the signs of board-level dissatisfaction with Xio's executive management and its results. But the picture is muddled because Atkinson has been promoted to board chairman; clearly he is still a valued guy and either didn't want to be CEO any more or is needed for some vital role that he cannot fulfill while being CEO.
Beletec is the eighth CEO at Xio since November 2002. The list of CEOs is #1Phil Soran, #2 Ken Hendricson, #3 Larry Perlman, #4 Kathy Snofer, #5 Alan Andreoli, #6 Casey Powell, #7 Alan Atkinson, and now #8 John Beletec. Eight CEOs in nine years is some record.
Bringing in Beletec from within the Oak ranks contrasts with normal CEO recruitment, where high-level headhunters are involved and search for rounded, proven experience in the industry. Not in this case. Beletec's appointment looks similar to the emergency parachuting in of a CEO needed to rescue a ship in trouble. But then Atkinson wouldn't have been promoted to chairman, would he?
Does Atkinson's job description in Xio's statement give us any clues: "[A] focus on strategic business development and international growth." Why do we need a board chairman for international growth? If it's infrastructure growth needed then that's a chief operating officer job under CEO guidance. If it's revenue growth needed, then it's a sales infrastructure job for the worldwide sales head under CEO guidance... Only there isn't a world-wide sales head: Mark Glasgow, the incumbent, having recently and abruptly left Xio for an undisclosed position elsewhere.
There are two high-level sales appointments as a result of his departure, both internal promotions; Shawn Kinnear and Dave Ornstein become sales VPs for the western and eastern US regions respectively. Currently Xio has no single head of sales. Effectively it might seem Atkinson is in charge of international sales, which would be unusual.
How do we read this overall situation? It's unclear. A source said to me: "Glasgow left on his own (he already has a job), almost all of Alan's people were removed in the last few months – probably "Peter Principled", meaning they were appointed a level above their competence.
We might almost think there's a spectre of Xio looking to sell itself here, that phrase "strategic business development" ringing in our minds. But the company is very keen on its HyperISE technology, with that product now representing 80 per cent of its revenues after a fast revenue ramp.
Xio's EMEA VP Roger WAlton said: "The company has been re-architected to a performance focus. Alan had made the changes ... Oak wanted a closer eye on the whole operation of the business. Alan has very good contacts, especially in the banking sector."
We can deduce then that Oak wants the company to ramp up and sustain its revenues and thinks Beletec is the man to do this, with a focus on operations, while Alan Atkinson contributes his international growth and strategic thinking expertise – we're thinking executive chairman here.
Beletec said in a canned statement: "XIO is a company that has the potential to be truly disruptive in multiple markets with exceptional growth opportunities. I am excited to have the opportunity to benefit from the great foundation that Alan and his team have built, and take it to the next level.”
He would say that, wouldn't he? No clues there then.
Okay CEO number 8, show us what you are made off and take it to the next level.
There's never a dull moment at Xio and we can be sure that this eventful company will surprise us again in short order. ®