David Van Beveren, Starbox Netsystems

In a bit of a change of pace, my interview today is with someone on the hardware end of the business, David Van Beveren. David is Founder and of Calabasas-based Starbox Netsystems (http://www.starbox.net), a company developing server appliances for the Internet and specifically for Application Service Providers (ASPs).

BK: Tell me a little bit about Starbox Netsystems, and what your products and services are.

DVB: Realize the potential of the bandwidth revolution. That is what we are about.

Specifically, our mission is to enable service providers to offer sophisticated solutions to their customers by producing Internet server appliances that combine manageable scalability, rich functionality, and high reliability.

A widely accepted premise in the Internet Service Provider world is that as larger amounts of bandwidth become more and more affordable, the content delivered by service providers to customers will become more sophisticated. Many people realize that means things like streaming music and video, but it also means sophisticated applications can be delivered via a web browser. Application Service Providers (ASPs) are defined as the companies that will make these web-delivered applications available. We will develop appliances with performance levels suitable for the ASP's requirements, with software features that make it easy for companies (ISPs or other companies) to become ASPs.

Our tactical plan is to develop and sell a line of Internet appliances for a variety of tasks - Web Hosting, e-Commerce, Caching, firewall, etc., and develop a comprehensive management framework for running all of these from a remote location. To this we will add appliances for general purpose application serving, and market this to new ASPs, web hosting companies who want to become ASPs and to software companies who need to become ASPs.

While our appliances are being developed, we have a thriving business selling general-purpose servers with particularly good reliability features to the service providers and dot-coms who will ultimately need our appliances and management framework.

BK: How is your company financed, and what are your plans for future funding?

DVB: We are presently self-funded, and have revenue running at a rate of $4 million per year. We are shopping our business plan for an initial funding round, and believe that with this and future funding rounds, we can build product and revenue levels suitable for an IPO in less than 3 years.

BK: What is your background, and how did you end up starting Starbox?

DVB: Prior to founding StarBox in November, 1999, I founded, ran and owned EIS Computers for nearly six years. EIS is a value added integrator with a history of delivering Solaris-based PC and UltraSPARC solutions to a variety of industries, including Internet companies and service providers. EIS has a good product, but it is not differentiable from any other clone. In 1999, my CFO and I recognized that there is a large opportunity in the service provider space for a company that is focused only on developing and providing server appliances to this market. We founded StarBox together to accomplish just that.

Prior to EIS I had a software develpment consultancy for another six years. My largest customer during that time was Sun Microsystems, where I was a contract developer working on the Solaris-on-Intel project. I did user interface design, hardware interfacing (device drivers) and project management for Sun and a dozen other customers during that time.

My degree is in Computer Science from CSU Northridge in 1987, and I worked in the hardware test equipment business for several years during and after school.

BK: What is your company's key differentiator, and who do you see as your main competition?

DVB: There are several companies who make appliance-grade servers right now, most notable is Cobalt Networks. There are also companies like Network Engines who have a similar vision to ours and are actively developing a product line, and companies like VA Linux who make servers with a lot of the same hardware features we encapsulate. Finally, there are companies like Sun Microsystems and HP who are selling well to the leading-edge companies rolling out ASP services today to early adopter customers.

Our total product differentiation has several facets. Our appliances offer a much greater range of scalability than anyone, from very low an dinexpensive to very high. We will offer appliances with a wider range of applications - web, store, cache, firewall, name server, application server and more - than any competitor currently has. Our easy to use software, which enables fast time to service, and scales to manage all the different appliances is also unmatched. Finally, our commitment to this single market separates us from large competitors who have strong allegiances to support the enterprise data center customers who are going to be displaced by the ASP model we see coming fast.

BK: What has been the hardest part of startup up Starbox compared to EIS?

DVB: The hardest thing today businesswise is finding quality people to fill all of the necessary roles. This is more a sign of the times than of the different businesses, I believe. Most of the people we would love to have on our team have jobs they already like, stock options they won't part with and not much time to consider if there might be a better alternative.This seems particularly true in the key engineering, marketing and sales roles we want to fill. Luckily we already have some good people in key positions, and I know that more are out there. Like anything it just takes persistence to find the right ones.

BK: Finally, what's the next big step for your company?

DVB: The next big step is the unveiling of our Internet appliance line (in late May). This begins the transition from selling general-purpose servers to selling purpose-driven appliances.

BK: Thanks for the answers!