RLX Goes Through Executive Shakeup

Gary Stimac is one of three top executives to resign their positions at the ultradense server maker.

Three senior executives of ultradense server manufacturer RLX Technologies Inc. resigned their positions on Friday, less than a year after the much-heralded startup company introduced its first "blade" product.

As part of the shakeup, Gary Stimac, a well-known industry figure and one of the founders of Compaq Computer Corp., reduced his role, turning over his titles of president and chief executive officer to Patrick Collins, formerly vice president of operations.

Stimac will remain as chairman, but will have no hand in managing day-to-day operations, according to a statement released by RLX Friday.

Two other senior executives are leaving the company entirely. Mike Swavely, RLXs chief operating officer, and J. Tempesta, the companys chief financial officer, resigned their positions effective Friday.

Prior to joining RLX, Swavely served as president of Compaqs North American operations.

"I have great confidence in Pat Collins and in the abilities of the talented group of executives that Mike and I recruited to lead RLX through its next phase of growth and development," Stimac said in a brief statement issued Friday.

The presence of Stimac and Swavely gave the startup instant credibility, and the two executives helped recruit a number of former senior industry executives to join the startup, many from Compaq.

In February, RLXs recruitment efforts spurred a lawsuit by Compaq, which accused the startup of hiring Compaq employees to obtain confidential trade secrets. The case was settled in April, but the terms were not disclosed.

Collins joined RLX last year after previously serving as vice president of supply-chain management for Dell Computer Corp. in Europe.

''Mike has served as an excellent mentor for the entire senior management team at RLX over the last year, and we all look forward to leading RLX through its next phase of growth and development," Collins said in a statement.

RLX, based in The Woodslands, Texas, was formed last year with the aim of manufacturing a new kind of ultradense rack-mounted server featuring a blade design. Early this year, the company announced its System 324, which packed 324 blade servers into an industry-standard rack previously designed to hold only 42 1U servers, previously the industrys thinnest size.

With the costs of data center real estate at a premium, system managers have increasingly moved to smaller form factors in order to pack as many servers into existing spaces as possible. Currently, 1U servers, which are shaped like pizza boxes and measure only 1.75 inches tall, are the most popular selling server form factor.

In addition to its small form factor, the design of the RLX servers was also noteworthy because of their use of low-power processors from Transmeta Corp., whose chips were designed for use in ultralight notebook PCs and handheld devices. RLX said the energy-efficient, cooler-running chips were more ideally suited for use in its tightly configured systems than product offerings from Intel Corp. or Advanced Micro Devices Inc.

Despite the innovative design, the company has struggled to find buyers as it hoped for its systems. In addition to having entered the market in the midst of an unprecedented computer-industry slump, other major computer makers sought to avoid customer defection by announcing plans to release their own ultradense servers within the next year.

Among the companies touting their own blade designs were Compaq, Dell and Hewlett-Packard Co.

While corporate customers have yet to widely adopt ultradense servers, the outlook for the small-sized server is favorable, according to the market research firm International Data Corp. According to a study released earlier this year, IDC predicted that by 2005, computer makers will have sold about 2 million blade servers worth about $4.5 billion.

But for now, RLX is hurting from lower-than-expected sales. In August, the company laid off 20 workers, about 17 percent of its work force. Currently, the company has about 100 employees.