NextIO Closes Down

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The HPC market remains one tough ecosystem, even for most innovative companies. And so today I find myself writing bad news involving some really nice people that I enjoyed working with.

Last week NextIO Inc., an Austin firm that developed networking technology for data centers, closed its doors after 10 years in business.

The company’s CEO K.C. Murphy said the company was funding its operations through a loan, and the bank that held the loan asked for repayment, forcing the company’s shutdown.

Murphy said the company succeeded in developing products that could cut costs and improve efficiency in data networks, but it had a hard time winning acceptance from U.S.-based companies, who he said take a risk-averse approach toward the equipment it uses in data centers. The company had better luck in Europe, where customers were willing to try its technology out and buy some. “North America is incredibly risk-averse,” Murphy said. “U.S. companies are unwilling to to commit to anything” that isn’t guaranteed by Cisco Systems, the sales leader in networking equipment.

Murphy said he expects the company will file for a Chapter 7 liquidation bankruptcy in which the main asset will be its intellectual property.

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