NEW! ExaGrid

ExaGrid, a maker of de-duplicating backup systems, has scored $20 million in funding earmarked for upping the ante against rival Data Domain.

"We already have over 100 customers, and we've been shipping the product for a year and a half," says CEO Bill Andrews. "This money is all about the acceleration of our top line. We'll use it to expand our sales and marketing."

ExaGrid aims for profitability by the end of 2009, and Andrews acknowledges IPO ambitions for 2010.

The startup's been building momentum slowly, with a few fits and starts, for nearly five years. When its introductory push in 2003 fizzled, the company regrouped around a NAS mission and subsequently refined its pitch. By its second funding round in March 2005, ExaGrid's aim was squarely on backup.

Now, with $65 million in total funding, ExaGrid is loaded for bear -- at least in Andrews's view. Its customer list includes American National Bank, Labat-Anderson, Johnson Health Network, and the Ohio Farm Bureau, among others. The firm has 81 full-time employees, 10 full-time consultants, and 21 open positions, Andrews boasts. The channel's growing, too: "We had zero domestic VARs on July 1, now we have 37, and we're adding one or two a month. We have six or seven in the Asia/Pacific and EMEA regions."The spoiler's name is Data Domain; there's also competition from FalconStor and Sepaton. Andrews claims ExaGrid outperforms Data Domain -- which performs de-duplication in the data path -- with post-processing de-duplication, by a factor of two or more, and he says his firm's byte-level de-duplication permits fast restoral. He says ExaGrid's design is "grid-based," combining memory, processors, disk, and network connectivity in a single box.

These arguments are typical of most de-duplication players, and users have learned to take them skeptically. In reality, ExaGrid may owe its success at least in part to being cheaper than its rivals.

"I think of them as an SMB de-dupe vendor, a low-end play," says one industry analyst, who asked not to be named. "Sepaton, FalconStor, Data Domain, are all bigger and more expensive."

Another observer thinks ExaGrid needs more traction: "ExaGrid is like the little train that could. Give it some time and some investment, along with some luck, and it might be able to catch up with the others," states Greg Schulz of the StorageIO Group. "They have a decent technical story, [although] they are way behind on getting customer adoption."

ExaGrid's new funding brings its total to $65 million. The series C round was led by Lehman Brothers Venture Partners, a new investor. Existing investors Highland Capital Partners and Sigma Partners also contributed.Have a comment on this story? Please click "Discuss" below. If you'd like to contact Byte and Switch's editors directly, send us a message.