Another Round for CentrePath

Scores $10M in VC cash to foster growth of service for management system provider

April 26, 2006

4 Min Read
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CentrePath has scored another $10 million in funding for the next phase of its ongoing evolution as a provider of storage networking services and software.

The round brings CentrePath's total funding to $19 million, including $5 million in 2005 and $4 million in 2004. (See (doclink 80100}, CentrePath Hits Milestone, and CentrePath Picks Up $4M.) This round was led by new investor Bain Capital Ventures and existing investors Greylock Partners and Pilot House Ventures.

According to spokeswoman Susan Frankle, CentrePath will use the money to continue to build its business helping companies set up storage and optical networks for data replication, preferably ones that deploy the startup's Magellan management system.

So far, it's a tack that's worked. CentrePath, which started a new life for itself back in 2003 (more on that in a minute), now claims 150 customers, an increase of 50 percent in the last year or so. (See CentrePath Hits Landmark.) Those include Bank of New York, Childrens Hospital of Philadelphia, the City of Boston, the City of Chicago, Comcast, Merrill Lynch & Co. Inc., New York City’s Department of Information Technology and Telecommunications, Turner Broadcasting, and Walmart.

CentrePath's Frankle won't comment on profitability or lack thereof, but she says bookings have increased about 75 percent, growing from under $8 million in 2004 to approximately $14 million in 2005.It adds up to a solid climb for CentrePath, which began as GiantLoop, a facilities-based provider (via partnerships) of metropolitan optical and SAN services back in the boom-time circa 2001. By 2002, however, the firm was floundering along with others in the space. (See Has GiantLoop Done a Loop?.) Despite $160 million in funding and over 200 employees, survival seemed to demand an identity change.

The shift occurred in 2003, when CentrePath cut loose its past, cut its staff to less than 100 (now the firm has about 78 employees), started over again financially (albeit with some assets of GiantLoop), and homed in on what it did best -- help customers design storage-oriented redundant data networks. While it still works with facilities-based partners like AT&T, the company now says 75 percent of the networks it's designed are storage-related.

So what's not to love? For one thing, there's a slew of competition. CentrePath competes with the likes of GlassHouse, which also advises customers on storage services, as well as telecom providers like Verizon that offer their own consulting and integration for SAN services. What's more, vendors like EMC are intent on getting into the act. (See EMC Pushes Service Horizons.) But one differentiator CentrePath has developed is its Magellan software, which execs say has been a key part of the business for five years.

Magellan collects information from different devices on customers’ networks, including SANs, WANs, and MANs. The info is sent to CentrePath's own data center in Waltham, Mass., where it is analyzed and presented to remote users.

CentrePath's software, Magellan DataPath Manager, adds event correlation, a feature also touted by EMC via its Smarts software products. (See EMC Stays Smart.) This function sifts performance alarms issued by network and storage devices to determine the exact cause of a network failure. It's a feature that can save IT managers time and money. For instance, when a SAN fails, the user’s Storage Resource Manager (SRM) software could issue multiple alarms that may not relate to the original problem. Magellan Datapath finds the source.At least one analyst thinks CentrePath's use of Magellan has helped the company gain traction in the last year. "The cross-domain analysis capabilities in their software are the key. It lets you identify root cause and service impact immediately and remove guesswork from compiling individual alerts," writes analyst Brad O'Neill of the Taneja Group consultancy in an email today. Magellan helps CentrePath attract big companies with multiple campuses that need help with fiber service design and hands-on management, O'Neill maintains.

Another source notes that Magellan represents an important management function but shouldn't be perceived as a do-all, even in storage networks. "Magellan is good at monitoring optical and wide area networks and for those focused on those capabilities, Centrepath would be a good fit," writes another analyst, Greg Schulz of the StorageIO consultancy, in an email today. But he notes that vendors like Creekpath and Onaro are also moving into IT event correlation. It would be interesting, Schulz thinks, to see the products work together.

— Mary Jander, Site Editor, Byte and Switch

Organizations mentioned in this article:

  • AT&T Inc. (NYSE: T)

  • Bain Capital

  • CentrePath Inc.

  • Comcast Corp. (Nasdaq: CMCSA, CMCSK)

  • EMC Corp. (NYSE: EMC)

  • GlassHouse Technologies Inc.

  • Greylock Partners

  • Pilot House Ventures

  • Verizon Business

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