Calxeda Closes Down After Funding Shortfall

One of the pioneers in developing ARM-based chips for low-power servers – Calxeda – has revealed it is shutting down.

The company blamed the failure to secure another round of funding as the reason.

Funding Failure

Officials with Calxeda, which had been working with such top-tier server OEMs as Hewlett-Packard and Dell in  bringing systems-on-a-chip (SoCs) based on the ARM architecture to servers, had thought they had financing lined up that would keep the company open, according to Karl Freund, vice president of marketing.

However, the financing didn’t come through and there was no time to pull together another deal, making it impossible for the 130-employee company to meet payroll and other financial obligations, and Calxeda’s board decided to close down, Freund told eWEEK.

What happens from here is unclear, he said. Calxeda officials will meet with creditors to try to find the best way for the company to resolve its debts, and it could mean selling the assets to another party that would continue the businesses in a much smaller fashion, possibly as a chip maker for fabrics, said Freund, who came to Calxeda after executive positions at HP and IBM. The company’s future will come into better focus within the next three to six weeks, he said.

In the meantime, most of the 130 employees will be gone, though there will be a skeleton crew kept on to help service customers, he said. In addition, the company’s two products will continue to be available and will be supported by whatever entity comes out of the restructuring, according to officials. Most of the employees were based in Austin, Texas, though there were some in Sunnyvale, Calif., and in China.

Name Change

Calxeda started life as Smooth-Stone, changing its name and bringing on several executives in 2010. The company is among a range of vendors that are looking to bring ARM’s low-power SoC technology, which powers most smartphones and tablets, into the data centre to power microservers. These power-efficient, dense systems are aimed at Web-based businesses like Google, Facebook and Amazon, which run massive data centres running huge numbers of small systems that process a lot of simple workloads.

Calxeda was among the more prominent vendors – which also includes Applied Micro and Marvell Technologies – developing ARM-based server chips. ARM officials expect to challenge Intel in the low-power server market, saying their architecture will transfer well from mobile devices to the data center. However, currently ARM’s architecture is 32-bit, though the vendor is expected to launch its 64-bit ARMv8 design this year.

Systems sporting 64-bit ARM chips are expected to begin hitting the market later next year. Advanced Micro Devices plans to build ARM-based server chips in 2014, and Samsung is expected to do the same.

Calxeda’s Freund said the company’s problems were more internal and were not an indication of larger issues around the push to bring ARM into the data centre.

“This is really about us being too early to the market,” he said.

The company burned through $103 million (£63m) in financing and released two 32-bit SoCs, the ECX-1000 and ECX-2000. Both SoCs also featured Calxeda’s Fleet Fabric technology. Its first two 64-bit offerings, code-named “Sarita” and “Lago,” were expected to be available in 2014. However, even though customers of the ECX-1000 and ECX-2000 were happy with the product, there wasn’t enough business to make up for the money the company was spending, Freund said.