Digital Tape Solutions, general manager, David Davoren will not have his contract renewed by ASX-listed parent company Davnet after Easter in a move that has sent a tremor through the storage channel.
Davoren, who co-founded the company with fellow then Dawn Technologies executives Garry Humphries and Aubrey Cohen back in 1996, had grown DTS for six years before telecommunications company, Davnet, acquired it last year.
Former marketing manager, Victor Koshka will replace Davoren as general manager in a move some sources in contact with ARN claim is less expensive for the e-Data Group and therefore Davnet..
Davoren, who signed a one-year contract with Davnet after the e-Data Group was sold, would neither confirm nor deny this was the case, but says he leaves "with no grievances".
"[Davnet] has cut back like a lot of companies, and while I think I would have been worth it, it wasn't to be," says Davoren.
However, he did not rule out the possibility of continuing with "consultation services" for DTS but claims any options would be exercised for the short term only.
Many industry pundits have been quick to offer their support of Davoren claiming the decision shows a lack of understanding by Davnet of the storage distribution market. However, Humphries, now CEO of the e-Data Group, claims it was his call.
"I made the call 100 per cent," Humphries told ARN. He confirmed the decision was made to a certain degree to reduce the operational costs of the company but fervently ruled out it had anything to do with performance.
"Right now it's the duty of all CEOs to stop, take a look, and make sure their companies are going to be around next year," Humphries said. "Some companies are hoping for a turn-around [in the market] and that's not good enough for me"Meanwhile, Peter Witten, a spokesperson for Davnet, says the company has been on a cost-cutting crusade across the entire organisation.
"We have been tightening our belts fairly sensibly over the past few months," says Witten. "There have been a number of staff changes across all areas of the company and at all levels."
Davnet shares have plummeted from a high of around $2 in May of last year to around $0.20 last month.