In a changing of the guard at software development firm Esphion, founder Johnny Cates has been replaced by a former head of both Microsoft New Zealand and Advantage Group, Greg Cross.

Cross said he had been involved with the firm since January, having been brought in by investor TMT Ventures to examine Esphion's commercialisation strategy.

Cross, who has been appointed interim CEO, said the handover was a decision by the board, of which Cates was a member.

While his appointment was described as interim, was there is no search going on fornte a replacement CEO was not being sought at this stage.

TMT Ventures chairman Ross George said the appointment was nothing unusual in a rapidly changing business and it was about adding expertise.

He said Esphion, which makes network analysis and anti-denial-of-service software, was developing as expected. Cross had telco experience, had worked at a software development house, and at Microsoft NZ.

Cates said the transition was amicable and he was now looking at his options, including setting up a consulting business.

He said Esphion had, in a short time, gone from being an idea to "a very hot product ... with hot partners and the best backers in the country". . He now aims to help other local firms achieve success.

Cates built up Esphion from its beginning in 2000 and remains a significant shareholder. The other main shareholders are TMT and NZ Seed Fund. Businessmen Peter Menzies and Stephen Tindall have smaller shareholdings.

Cross said selling Esphion software was a challenge because of the small number of potential customers in New Zealand.

Esphion had "plenty of runway" with $5 million invested in the company by TMT last year. It had developed strong relationships with Alcatel and Juniper, and Asia Pacific was in its sights.

Albany-based Esphion has 15 staff.

Most recently, Cross had been working for a venture capital firm in San Francisco and Asia.