Industry News Desk
It's All Over for Fabric7 Systems!
Fabric7 Checks into Heartbreak Hotel
Apr. 30, 2007 07:45 AM

It’s all over for Fabric7 Systems.
The 20-hour days put in by its CEO Sharad Mehrotra and many of its crew of 70 for the last five years have gone for naught.
The company was in the midst of its fourth round expecting a check for another $25 million, but its financiers decided – on Friday the 13th – that it would take double that amount to bring the ambitious start-up to breakeven and they were unwilling to ante up. They’d rather take the $57 million loss.
Fabric7 had to call customers and cancel $750,000 worth of orders.
The company is now peddling its IP around, hoping to re-form under an acquirer willing to let it take its widgetry to market. It reportedly has 25-30 patents pending; did a million dollars last year and figured it would have done $3 million-$4 million this year. Its people are reportedly very much in demand.
Fabric7 got to market at the end of ’05 on a relatively shoestring budget that would have been a quarter of a billion dollars anywhere else but a start-up, Mehrotra said.
Since then it’s been up against the Fab Four, IBM, HP, Sun, and to a tiny extent Dell, trying to sell big assed eight- and 14-socket Solaris/Linux/Windows Opteron servers that were meant to do all the data center kinds of SMP things that the market has been conditioned to think can only be done by proprietary RISC or Itanium servers – only cheaper.
Its unique architecture – which it called fabric computing – virtualized compute and network services into a resource pool that could be partitioned, provisioned, deployed, scaled and migrated on-demand, taking a shot at solving the data center’s over-provisioning/server utilization crisis.
Fabric7’s genius was in implementing these capabilities, many of them inspired by mainframes or network switches, in x86 hardware for the first time. A subset now comes from x86 hypervisor vendors like VMware and Virtual Iron, complementing Fabic7’s technology.
The follow-on to its 14-socket system, a upward-compatible beast that would have doubled the machine’s compute density, was being fast tracked to market and would have been available in 1Q08 along with a major upgrade to its management software.
Mehrotra thinks the industry – and the Fortune 1000s – are the losers. Fabric’s flameout may give other entrepreneurs pause and users remain captive to the OEMs that put their best features in pricey proprietary boxes while their commodity gear is indistinguishable from their rivals’.
Fabric7 was backed by Goldman Sachs, New Enterprise Associates, Selby Venture Partners, AMD, Sanmina-SCI, Foundation Capital, Advanced Equities, Vanguard Ventures and Yasuda Enterprise Development Company Ltd.
People like Motorola’s CEO Ed Zander, Oracle’s principal architect, Server Technologies Group Roger Bamford and AMD’s CTO Fred Weber were on its advisory board.
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