InMage Ingests $10M

With help from an anonymous partner, InMage Systems has taken $10 million Series B funding. The round closed two weeks ago and was led by existing investors Hummer Winblad Venture Partners, an unnamed "strategic corporate partner," and Kumar Malavalli, the ex-CTO of Brocade who is InMage's chairman and chief strategy officer.

Mum's the word on who InMage's silent contributor may be. The company's list of strategic partners includes some intriguing possibilities: HP, IBM, Pillar Data, Quantum, RedHat, Sungard, Symantec, VMware, and Xiotech, as well as integrators iStreet Solutions and Solidcore. (See InMage Completes Testing.)

All investors except the mysterious new corporate entity had contributed to InMage's previous round. The startup's total funding is $17.3 million.

According to Malavalli, profitability is on the way and could be reached by early next year. And as to going public, he says, "That's an eventual, longer-term goal."

The new money will be used to increase sales and marketing and fund product engineering, execs say. There's a near-term product announcement coming, and roadmap items include an agentless version of the vendor's DR-Scout. Also planned are solutions aimed at specific vertical markets and better integration with virtualization -- building on the startup's recently announced integration with VMware, MS Exchange Server 2007, and 64-bit applications. (See CDP Gets Broad Makeover.)At present, DR-Scout includes a host-based agent that replicates volumes or files to an out-of-band appliance that compresses and encrypts the data. The setup is designed to get around the requirement for a proprietary array, while avoiding performance problems that can plague host-based solutions.

InMage, founded in 2001, has about 100 employees. It claims over 100 customers. John Ferraro, president and CEO, says the firm is getting 40 customers a quarter and plans to grow its roster to 200 takers by the end of this year. Average deal size, Ferraro says, is around $70,000, though projects start at $15,000 and can run into six figures.

Among announced buyers are law firm Greenebaum Doll & McDonald PLLC, hospital group Novant Health, and WorkingRx. (See CDP + Replication = DR.)

At least one analyst thinks InMage is breaking into larger firms as well. "They've predominantly sold into the SMB space, but I increasingly see them in the enterprise," says Arun Taneja of the Taneja Group consultancy. He attributes the startup's success so far to its focus off of CDP and onto the integrity of recovered volumes, along with the ability to offer a single solution for recovering data locally or remotely.

"CDP has been mispositioned. The focus should be on what it allows you to do, like disaster recovery and continuous backup, not just point-in-time recovery," says Rajeev Atluri, InMage's CTO and co-founder with Malavalli.InMage is also building its OEM roster. Though it's announced just one OEM, Xiotech, the startup gets roughly 20 percent of its revenues from OEMs. More announcements are on the way, Ferraro says.

InMage primarily competes against Double-Take, Falconstor, and CA's XOsoft, officials say. Claimed differentiators include the ability to work with multiple operating systems and storage devices. On the downside, at least one source notes that InMage costs more than the starting price of some competitors.

Mary Jander, Site Editor, Byte and Switch