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ARM server pioneer Calxeda shuts its office after running out of cash

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Calxeda, a company that was founded in 2008 to build out ARM-based servers for the web world says it is in the process of restructuring its business after apparently running out of funding. A story by All Things D says that the company is shutting down.

The company clarified that it has closed its office and sent most of its 130 employees home with the exception of a few people to continue to support customers. The product remains available and will be sold/serviced by whatever company takes shape after the restructuring, which will determine what happens to the assets and people. It added:

The market is just materializing, and its a shame that we simply ran out of money at this time. The financing we thought we had lined up disappeared quite suddenly and we ran out of runway to put another deal together.

Austin, Texas-based Calxeda had raised at least $103 million from Battery Ventures, Austin Ventures and Vulcan Capital among others in a few funding rounds.

Calxeda aimed to meet the needs of the webscale market as demand for low-power servers that could perform smaller workloads became interesting to web giants like Google(s goog) and Facebook(s fb). As recently as October it added a Facebook infrastructure executive to its board. Unlike SeaMicro, which was purchased by AMD, Calxeda decided that ARM cores, as opposed to X86 machines were the optimal way to go. At the time of the founding this was a somewhat crazy idea, but soon companies like Marvell and Applied Micro started talking up ARM in the server market as well.

Calxeda, had a deal with HP to build 32-bit servers, but the market for 32-bit machines was limited in the enterprise. It has sold products into the storage market, but struggled on the older-generation 32-bit ARM cores. The plan was always to put out 64-bit ARM-based boxes when those cores were available from ARM. That’s happening this year, but it seems Calxeda couldn’t keep up with its costs against the relatively thin demand for the 32-bit gear.

The company put out a statement that read:

Over the last few years, Calxeda has been a driving force in the industry for low power server processors and fabric-based computing. The concept of a fabric of ARM-based servers challenging the industry giants was not on anyone’s radar screen when we started this journey. Now it is a foregone conclusion that the industry will be transformed forever.

Now it’s time to tackle the next challenge. Carrying the load of industry pioneer has exceeded our ability to continue to operate as we had envisioned. We wanted to let you know that Calxeda has begun a restructuring process. During this process, we remain committed to our customer’s success with ECX-2000 projects that are now underway.

The statement discusses a restructuring and hints at some sort of reformation, but after burning through $100 million it’s unlikely that this is going to be a Phoenix-like rebirth as opposed to someone picking through the ashes of a fire sale.

6 Responses to “ARM server pioneer Calxeda shuts its office after running out of cash”

  1. Tihomir Katulić

    Just a short reminder, well over a year ago there was a discussion following the article speculating about Apple’s transition to ARM to power their PCs. I said it then, and I’ll repeat it now – it is not going to happen, not in the next five years. And in this industry this means it may very well never happen. Intel is improving their chips at steady pace, and ARM is going forward too, but the performance gap is as wide as ever, while Intel’s chips are becoming more energy efficient.

    What about you Stacey, you took an opposite position, in that article and its comments, and you as a journalist may have access to better information than the rest of us. Do you still think Apple will use ARM in their laptops and desktops?

    • Trinadh Yerra

      You’re right that there is still a huge performance gap, and if ever ARM steps into this, it cannot compete with Intel. However, many servers have a very defined set of functionality throughout their life span, it that case ARM will step in fast. Companies likes Facebook and Google are realizing the potential for serving web requests. So, Intel is here to stay, on laptops, desktops, and say 50% server market.