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Cash and Burn: A Storage David Stalks Goliath

Posted by David Greenfield on February 15, 2007

One of the great pleasures of following this industry for so long is that you get a chance to see some cool products go from back-of-the-napkin sketch to market success, and some smart folk go from snot-nosed inventors to globe-trotting CEOs. Apparently, the editor in chief agrees with me, as he asked me to start this column on the best and brightest start-ups.

Job one, of course, was finding a topic. I suggested that I spend a week living in and writing about Second Life. He told me to get a life. When I suggested a human interest story--namely, the rash of nervous breakdowns that will occur in six months when despondent gadget weenies run to their shrinks over iPhone performance anxiety (Apple's, that is, not Cisco's)--Wittmann threatened to send me to a different doctor. He's a big guy, so I took the hint.

I got serious and found a new Israeli start-up that aims to be the next EMC: a grid storage company that hopes to do for high-end storage what server grids do for computing. The company, XIV, is the brainchild of five graduates of the most elite unit in the Israeli army and includes Moshe Yanai, former head of EMC's R&D team.

Yes, yes, storage is boring, dull and, of course, insanely important. CEOs might talk about the revolutionary changes of supply-chain automation or how an app like Salesforce.com can improve closure rates, but IT guys know Salesforce is only as good as the underlying storage subsystem. That's why Tier 1 storage vendors can charge kings' ransoms for their systems. A typical price for an entry configuration EMC DMX-3, for example, runs $250,000 for up to 28.8 TB or about $8,700 per TB, not including snapshots and other storage software.

Grid storage players have tried to undercut those prices, with mixed results. Features and performance haven't always been up to snuff. Now Ofir Zohar and his cadre of co-graduates from Talpiot--the MIT of the Israeli army's tech programs--claim to have produced a Tier 1 grid storage system, Nextra, with all of the replication, availability and hot swapability you'd expect from such a system, for just $5,000 per raw TB.