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By | Chris Mellor 29th June 2016 14:33

Atlantis retreats to core VDI software and appliance market

Software biz needs to curtail ambitions and restructure for second time this year

Atlantis Computing, the software house that produced a VDI (virtual desktop infrastructure) offering and then expanded into general virtual server acceleration and on into hyper-converged appliances, is scaling its product line back to workspace software and hyper-converged appliances, with consequent job losses.

Its current main product technologies are:

  • HyperScale – general hyper-converged all-flash appliance for server virtualization, ROBO, VDI and database acceleration.
  • USX – pool and abstract all storage (SAN, NAS, Flash, RAM, DAS, Hybrid Arrays, and Public Cloud) and deliver virtual storage volumes to any application.
  • ILIO – VDI accelerator.

An Atlantis statement says: "To drive long-term profitability in its business, Atlantis will focus its product and go-to-market efforts on offering both software and HCI appliances for the workspace market.

"Atlantis will be able to achieve this goal without the need for additional funding. However, as a result of right-sizing the business and its virtual workspace strategic focus, the company will take steps to restructure its organization and increase operational efficiencies, which will affect a number of employees that are not already engaged in the workspace business."

The workspace term refers to VDI.

A look at the founding, funding and major event history shows how the firm has expanded:

  • 2006 – founded by Chetan Venkatesh.
  • 2007 – $2m A-round.
  • 2009 – $3m B-round.
  • 2009 – December – Bernard Harguindeguy becomes CEO.
  • 2010 – $10m C-round.
  • 2011 – ILIO v2.0 VDI product launched.
  • 2013 – $20m D-round – to help push ILIO VDI product out.
  • 2014 – February – USX general VM accelerating product launched.
  • 2014 – July – Jason Donahue takes over CEO role.
  • 2014 – December – Chetan Venkatesh takes over CEO role, with Donahue leaving for personal reasons.
  • 2015 – launches HyperScale product into hyper-converged systems market.
  • 2016 – February – some 20‑32 staff leave.
  • 2016 – May – Citrix and Atlantis partner for VDI and HCIAs.

Total funding is $35m.

Our understanding is that Atlantis was finding some technical challenges in the general server virtualization and hyper-converged appliance areas, and sales were relatively poor. In effect, the firm cannot compete in the general hyper-converged market with Nutanix, Simplivity, Cisco's HyperFlex, and the massed ranks of EMC VxRAIL and VMware VSAN partners. So, as there is no additional funding, it is retreating to the VDI market where it has a strong base and strong product offering.

In February this year, CEO Chetan Venkatesh said: "The writing is on the wall: 'growth at all costs' is not tenable, and the focus is on achieving profitability in the near term. Anyone who does that will find the ride much easier."

When employees were laid off at that time, some 200 people were left on the payroll. We estimate the new cull could affect 20‑50 people. Conceivably people could be let go from marketing, support and engineering, both hardware and software.

An Atlantis spokesperson said; "Atlantis will continue to develop next-generation USX and HyperScale offerings and offer customers a choice of SDS and appliance-based solutions aimed at the virtual workspace and VDI. We have leading market share and world class customers in this space and our latest SDS and HCI products perform perfectly and are well-positioned for continued growth. We are restructuring across the company behind this effort, which includes marketing, support and engineering, but we aren’t sharing additional employee details as a general policy. We believe the company will be well staffed to achieve its goals."

Hopefully Atlantis will be able to find profitability, and a stronger and more stable business will emerge. ®

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