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Inside Track: Employees at new Verari head for furlough as company struggles in recovery

It’s been a while since we wrote about Verari. You’ll recall that Verari Systems went out of business back in December and had to sell assets to pay creditors, laying off all their employees in the process. Then co-founder Dave Driggers managed to put together some financing and buy some of what was left to try and make another go of it as Verari Technologies. The company didn’t say much after it started getting systems back on line, but we assumed things were clicking along.

Evidently not.

I have been hearing via Twitter and a few other outlets (and on this site; see the more recent comments on this article) that the company is not doing well, and even that a furlough might be in the offing. That was confirmed yesterday via an email from someone who attended a company-wide conference call on the 15th of April.

According to that source, the news on the call was grim. Sales are much lower than expected, and evidently they cannot find partners willing to license and sell Verari IP (this partner strategy was part of the early press release the company issued right after it re-started). Verari has lined up an outside manufacturer (Celestica), but they haven’t gotten any sizable orders from Verari and, according to my source, also haven’t put any direct sales staff in place to move Verari hardware as they had originally planned to do. Other sources within the company also say that Verari’s current sales staff does not include any of the top performers from the old Verari Systems, and that seems to be hurting them as well.

The furlough was also discussed on the call, and “many” current Verari employees are headed for a two week furlough which could become permanent if things don’t improve.

I’m sorry to hear that the company is still struggling, and sincerely hope they are able to turn it around. If you have additional insight into what’s going on, leave a comment or drop me an email.

Comments

  1. VerariTech says:

    Sad…

  2. GoVerari says:

    While I don’t work at Verari anymore, I had for longer than just about anyone when they closed up. There are some issues with the story that are a bit unfair that I’d like to comment on…

    1) The company has a lot of talent in the sales department. I know some of them very well. Most of them carry a strong tech knowledge along with sales skills which is perfect and well respected by clients in the fields they are going after. The sales staff an management there now got some of (old) verari’s largest accounts. I don’t know that they’re off to the start they might have wanted but that’s a factor of several things – including the marketplace in general.

    2) Verari (tech) is still very young. Getting new CM’s on board takes time. Remember it’s only been a few months since the doors have been open. I think they’ve gotten pretty far for the time they’ve been back.

    3) Getting partners lined up for direct sales takes time too. It’s unfair to read into the fact they don’t have 100 partners hitting the streets as an indication of anything other than those discussions are still taking place.

    Not hitting any performance milestone isn’t ideal, but it’s also not uncommon. If I were a betting man, I’d bet in the next few months you’ll be reporting totally different types of stories about Verari.

    And no, I’m not a shill. I’m not management and I don’t work there currently. The author of the story is welcome to e-mail me to confirm

  3. John West says:

    @GoVerari – Your comment seems to indicate you think I’m cheering for a VT failure: I’m not. No one here wants them (or any company) to fail. We’re talking about real people with real lives and families. I’m not inside the company, but what I am seeing from the outside says that if they are going to succeed they need to adapt faster and push farther.

    As for your comment that they are being graded unfairly because it takes time to build a company, I think that is naive. While Verari Tech may be a new company, this certainly isn’t a new start up. The people there now were there before, with the same products, in the same places. SGI is a great example of a company that failed (at least twice), and came back farther faster. The jury is still out on whether SGI will be successful in the long run, but they are proof that the business can (and should) recover faster if the company is going to survive. The fact that they are having these problems so soon after the restart indicates that there are deep, fundamental problems with the company.

  4. John Bassise says:

    What’s the latest with those guys? I tried to call the other day and couldn’t get through.

    (Former client)

    JB

  5. John Bassise says:

    I guess that answers my question 8-)
    No marketing, sales, management, or anyone from Verari to say “Things are fine. Feel free to order!”

    We’ve found the best thing for us is a nice mix of SGI/Rackable and HP. The two both give good service and using both keeps them honest.

    JB

  6. I must have missed this article… my apoligies to you Mr Bassise as I am not looking around for posts to comment on each day, or each week.

    Verari is still here, and we are still moving in a positive direction. Let me be the first (if you haven’t read other posts here) to say, “Things are fine. Feel free to order!”. By the way, the number is 858-874-3800. Phones are open during business hours so feel free to call.

  7. I hope for the best for Verari v2.0. They are good people and have a good product.

    As previous poster so aptly pointed out, there are people and families behind stories like this so the voice or style of writing matters somewhat. This article carries a twinge or tabloid or schadenfreude in it. It may not be intended but it reads that way.

    Disclaimer: I am not, nor have I ever been an employee of either incarnation of Verari.

  8. John West says:

    Jeff – the previous poster you mentioned is the author of the article (me); no schadenfreude in the article, but there is always a sense of tabloid when reporting bad news. I haven’t even reported all the bad news thats been sent to me by current and former employees.

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