Cassatt is almost out of business, CEO says

The company has about a dozen large customers who use its software to reduce energy costs

Cassatt, which developed an innovative technology for managing server use in data centers, is close to going out of business, the company's CEO has said.

Cassatt has been a victim of the slow economy and an unwillingness on the part of customers to sign big deals, said founder and CEO Bill Coleman, according to a report at on Monday. Analysts said the company may also have been a bit ahead of its time.

Cassatt is looking for a buyer but has so far been unsuccessful, and the company is now "close to the end," Coleman told Forbes. He was out of the country and unavailable for further comment Monday but Cassatt confirmed that the report was accurate.

The company is venture-backed and has about a dozen large customers, mostly in the telecommunications, finance and government sectors. They use its products to manage server usage and reduce power consumption in large data centers.

Cassatt's demise has attracted attention for a couple of reasons. One is that Coleman is a well-known entrepreneur in Silicon Valley: Earlier in his career he cofounded middleware pioneer BEA Systems, which was later bought by Oracle. (The "B" in BEA comes from Coleman's first initial.)

The other is that Cassatt's technology is well-regarded in the field of data center management. It's an area that is likely to grow in significance as more companies try to improve the efficiency of their data centers, said Gartner analyst Thomas Bittman.

"Cassatt was in the right position, they have some nice technology, just at the wrong time," he said.

Its software manages a pool of servers, monitors the work being done by each and moves workloads around to where they will run most efficiently. It takes into account service levels for each application and can power servers down while they are not being used to save electricity.

Some of those capabilities are offered in other products, such as VMware's Distributed Resource Scheduler, for example. But none has quite the capabilities offered by Cassatt, Bittman said.

Michelle Bailey, vice president for data center trends at IDC, said Cassatt's technology may have come along before customers were quite ready for it. "They have a really strong vision for the future, and I think it's probably the right vision, but they were just a bit early for the market," she said.

Cassatt has talked to "about a dozen companies, all the usual suspects," in search of a buyer, Coleman told Forbes. He didn't identify the companies, but analysts mentioned IBM and Hewlett-Packard among the vendors that might be interested.

Bittman and Bailey both said that Cassatt may yet find a buyer.

"What frustrates me is my own naivete," Coleman told Forbes. "I thought I could give companies something radical that had a proven return on investment, and they would be willing to change all their companies' computer policies and procedures to get that. Right now, it's hard to get people to get beyond proof-of-concept tests or a data center energy analysis."

Copyright © 2009 IDG Communications, Inc.

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