Netezza Nets $15M More

Netezza Corp., which makes a data warehousing appliance, has scored a fourth round of funding worth $15 million, with potentially $5 million available to the company if required (see Netezza Grabs $15M ). Netezza has garnered more than $68 million in funding to date.

While not a pure storage networking play, Framingham, Mass.-based Netezza's combination of storage and database technology offloads tasks often done by storage gear (see Netezza Boosts Data Appliance and Netezza Unveils New System).

The solution is apparently catching on: According to CFO Patrick Scannell, 17 customers have purchased more than 40 systems from Netezza, which has been shipping its gear for two years, though it was founded in 2000.

Scannell says the money will be used for continued expansion of its marketing and sales, particularly internationally, with a focus on Europe and the Asia/Pacific region. The company has 140 employees and will likely have more in short order. Also, within the next six to 12 months, the firm plans to release more scaleable versions of its product. Today, the appliances handle 400 Gbytes to 27 Tbytes of data; by next year, Scannell says, Netezza will top out at over 100 Tbytes.

As a startup, albeit a late-stage one, Netezza needs all the help it can get. Competition comes chiefly from database heavyweights, IBM Corp. (NYSE: IBM) and Oracle Corp. (Nasdaq: ORCL), which have distinct advantages over any newcomers. Also in the running is Teradata, a division of NCR Corp.Scannell says going head-to-head with the likes of Big Blue isn't intimidating anymore. "We spend less time talking about who is Netezza and more about the value proposition," he claims. Simplicity and cost of ownership not only help sell a data warehousing appliance, he says -- they also help distinguish Netezza from the rest of the pack.

Netezza's adopters are evidence that its pitch is working in at least some major installations. Customers include AT&T Wireless (now Cingular Wireless), CNET Networks, Epsilon, Orange UK, Premier Inc., Shoppers Drug Mart Corp., and The TJX Companies. All of these -- indeed, all Netezza's customers -- have bought more than one box, and many bought their second unit within three to six months of purchasing the first, Scannell says.

Despite its penetration, Netezza faces an uphill battle against the likes of IBM and Oracle. But the firm is optimistic: Scannell predicts profitability by midyear 2005 and possibly a public offering within the year as well.

The round was led by Meritech Capital Partners and included previous investors Battery Ventures, Charles River Ventures, Matrix Partners, Orange Ventures, and Sequoia Capital.

Mary Jander, Site Editor, Byte and Switch0