Radiant Data Goes It Alone

Tiny IP-based replication software outfit Radiant Data Corp. claims it's keeping interested venture capitalists -- and potential buyers -- at arm's length for now, because the company believes it can build traction on its own, and its private investors are unwilling to give away a substantial stake in the venture. But the VCs that Radiant Data says has contacted it tell a slightly different story.

The startup was founded in May 2000 as Independent Storage by Mark Bradley, who is now chief technology strategist for Computer Associates International Inc. (CA)'s (NYSE: CA) BrightStor storage software group.

Last year, Radiant Data merged with PeakData LLC, a reseller of Storage Technology Corp. (StorageTek) (NYSE: STK) products that targets mainframe environments. Both are based in Niwot, Colo., between Longmont and Boulder.

Saeed Karim, Radiant Data's president and CEO -- and also president and CEO of PeakData -- says Radiant will be able to sustain itself from the internal cash flow from PeakData, which has a quarterly run rate of around $2 million.

"I'm not spending money like a drunken sailor, so I'm not interested in VC money right now," he says. "Boulder Ventures and Sequel Partners are wanting to talk to me, and I say, 'Give me another six months.' "But representatives of the two VC firms Karim claims contacted him say this isn't true.

"I have never met or talked to Saeed Karim or Radiant Data or any of its predecessor companies," says Kyle Lefkoff, general partner at Boulder Ventures.

Meanwhile, Tim Connor, partner at Sequel, says Karim's version of events is somewhat exaggerated. "Sounds like a bit of overselling by Saeed," he says. "We looked at Radiant about nine to 12 months ago and were intrigued by the technology and team, but told them we needed to see some success/validation with customers before we would seriously consider an investment. I have not had an update on their progress since then."

Radiant Data, which has just seven employees, is currently shipping its software and has landed two customers (although Karim wasn't ready to tell us who they are). In order to expand the business, he acknowledges, "I'm going to have to go out and get money, but at reasonable terms... I've seen VC valuations for companies at zero."

PeakData and Radiant Data share two main angel investors: Carl R. Vertuca Jr., a former StorageTek and IBM Corp. (NYSE: IBM) exec who runs a venture capital and real estate investment company, and Raymond D. Croghan, formerly president of Applied Communications Inc. (ACI), a payment processing firm that is now known as Transaction Systems Architects Inc. (TSA). Karim would not disclose the amount of funding the companies have received to date.So what has Radiant Data developed that's so interesting? The Radiant Data Server is Linux-based software that provides real-time data replication over IP networks using a proprietary object-based file system. It allows multiple applications and users to access the same content, automatically synchronizing changes -- it's essentially "N-way asynchronous mirroring" of a given data set, says Bradley.

"Built into the software is a protocol that allows multiple instances of a given object to be maintained over a distributed fabric," he says. "It's f---ing amazing." [Ed. note: Not shy about our little invention, are we?]

The server is basically "kernel-privileged middleware," Bradley continues. It presents a Common Internet File System (CIFS) or Network File System (NFS) interface to applications, so it's completely transparent, he says. As for performance impact, Bradley says it's actually faster than NFS: "It's object-based I/O. We're not shoveling around files."

Karim and Bradley also claim that several large storage companies have been poking around Radiant Data with an eye to licensing its software -- or even discussing buying it outright. The purchase prices being thrown out by "three-letter acronym companies" were too low, Bradley says: "It was a question of valuation and timing."

As for OEM candidates, Karim says, "We see that as a great opportunity for us, but whether it's EMC Corp. [NYSE: EMC] or CA or whoever, it's too early to say." EMC and CA representatives declined to comment.This all starts to smell a bit like the headstrong hype of a hungry young company.

First of all, it's not like Radiant Data is alone in addressing this market. Indeed, EMC has already licensed similar software from Signiant Corp., which EMC is rebranding as OnCourse, which is able to replicate data across multiple platforms (see Signiant Wins EMC's Love).

Other startups delivering ways to keep data stores consistent across multiple geographical sites in various ways include Actona Technologies Inc., DiskSites Inc., NetEx, Scale8 Inc., Storigen Systems Inc., and Tacit Networks (see EMC Eyes File-Caching Startups, Startups Take It to the Edge, Storigen Ships Cache of Many Colors, and Scale Eight Smells the Software).

And why did Bradley decide to leave Radiant Data -- a company he founded and one that owns the rights to his purportedly patent-pending technology -- in June 2002? "Funding was kind of tight," he says now. "CA had been looking at Radiant and considering a possible business deal there, and they said, 'We need you or someone like you,' so I said, 'It's probably right to do this.' " Before starting Radiant Data, Bradley held various engineering and management positions at Adaptec Inc. (Nasdaq: ADPT) and Silicon Graphics Inc. (SGI) (NYSE: SGI). "I was employee No. 18 at SGI," Bradley boasts. [Ed. note: Wow, man, you're practically Bill Gates.]

Karim, before he started PeakData last year, was president and COO of Front Porch Digital Inc., a content management software company that was spun off from StorageTek. Previously, he worked for StorageTek in marketing, business development, and sales positions in the U.S. and Europe.Right now, Radiant Data says it is focusing on landing its first set of customers. "Once I have half a dozen referenceable customers, I'll get a good market splash," Karim says.

And maybe at that point, VCs will also be more genuinely interested in Radiant Data's pitch.

Todd Spangler, US Editor, Byte and Switch