Servergy

About Servergy

Servergy, Inc. was a technology company established in 2009 by co-founders Bill Mapp and Jonathan Lawrence, positioning itself in the data center hardware market. The firm, headquartered in McKinney, Texas, aimed to develop and sell energy-efficient servers, a segment driven by the escalating power and cooling costs in data centers. Between 2009 and 2013, Servergy raised approximately $30.5 million from private investors through multiple funding rounds, including a $20 million Series C in November 2013.

The company's flagship product was the Cleantech CTS-1000, a PowerLinux server built on what Servergy called its patented "Cleantech Architecture." This server was marketed as a hyper-efficient and high-density solution that could significantly reduce power consumption—by up to 80%—and space compared to traditional servers. The CTS-1000 utilized a less powerful 32-bit processor, which was pitched as a key element of its energy-saving design, targeting workloads like big data, cloud computing, and storage applications. However, this design choice placed it in direct competition with major manufacturers like IBM, Dell, and HP, who were using more powerful 64-bit processors.

Servergy's operations came under scrutiny, leading to an investigation by the U.S. Securities and Exchange Commission (SEC) starting in 2013. The investigation focused on allegations that the company and its founder, Bill Mapp, made material misstatements to investors regarding the server's technological capabilities and purported pre-orders from major companies like Amazon.com and Freescale Semiconductor. The SEC alleged that claims of the CTS-1000's superiority were misleading because it used an obsolescent 32-bit processor and that no firm orders from the mentioned companies existed. In 2016, Servergy, which had since cut ties with Mapp, agreed to a settlement with the SEC, paying a $200,000 penalty without admitting or denying the charges. A jury later found Mapp liable for one count of negligence for misleading investors. The company is now considered deadpooled.