NEW! Top 10 Storage Startups to Watch

The Byte and Switch staff presents its quarterly list of notable newbies

February 22, 2008

22 Min Read
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Winter: The wind howls. The snow flies. And around the world, a fresh crop of storage startups struggles toward the light.

You got it. Once again, we at Byte and Switch have readied a list of the storage startups we think are most watchable.

These are companies we've been watching ourselves, as part of our self-appointed mission to identify key up-and-comers. As we've done for two years now, we present this as an entirely fresh list. And we intend to follow up later to see how we did. (Check out our hindsight self-reviews of the first and second startup lists we did.)

As ever, the new list comprises notable newbies with a range of innovative bids for storage managers' attention -- and purchase orders. We think they possess each of the following key attributes:

  • A really interesting gamble or a creative take on an important storage or storage-related problem;

  • Current impact, demonstrated in getting new funding, launching new products, or adding significant partnerships sometime within the last 18 months;

  • Solid initial backing in the form of an angel round, spinoff support, or an official venture round;

  • Partnerships, customers, or contracts in place that prove they're more than vaporware.

Meeting all these criteria isn't easy. But the storage market continues to expand with customers' burgeoning data, and those customers are willing to pay for tools and technologies that save them money in capital costs, operational fees, and environmental expenses. So there's room for companies with the right ideas to get a toehold, in spite of macroeconomic conditions.It's never easy. Dire predictions of economic recession have haunted storage vendors' earnings reports lately. And some suppliers have taken it on the chin, as a jittery market reacts with a flurry of downgrades or holds.

Our final caveat: The companies on our list are the result of our editorial decision making, based on extensive reporting and talks with users, analysts, and suppliers. If you're looking to praise or blame, look no further than our byline.

As before, we have not ranked our winners in any way except alphabetically, eschewing any hint of preferential order.

Now, we know you won't agree with all our picks. And, believe it or not, we'd like to know what you think. Is there a great startup we missed? Were we on target? Keep in mind that we update this list quarterly (we plan to, anyway), so there's time to suggest a firm you think may be worth our perusal for the next list.

Hit the message board, write to us individually, or email us at [email protected].Enjoy!

The List:

Next Page: Fusion-io

Imagine being able to add a multi-rack disk array to your network -- without buying a new system. That's the idea behind Fusion-io's still-nascent ioDrive.

The ioDrive is a NAND-based PCI Express (PCIe) card equipped with a technology called ioMemory (short for Indexed Object Memory). It combines the ability to run high-density NAND chips in parallel with high-speed switching and networking protocols. According to Fusion-io, the result is a storage network on a card.Fusion-io says ioDrive is not an SSD, although it's clearly going to compete with a range of SSDs and related technologies that also are designed to surmount speed and capacity obstacles of traditional hard disk drives.

Examples include startups such as Pliant and Nanochip, and larger vendors like EMC that are using or pondering alternative storage technologies.

When the ioDrive becomes generally available, which Fusion-io targets for the end of this quarter, it will be offered in 80 Gbyte, 160 Gbyte, and 320 Gbyte versions priced at about $30 per Gbyte. A 640 Gbyte ioDrive is on the drawing board for an unspecified future date.

Fusion-io says the ioDrive plugs directly into a server and increases memory capacity and performance by 100 times. The vendor says each PCIe-based ioDrive is capable of delivering 87,000 IOPS (input/output operations per second) using random 8 Kbyte packets.

"We have validated those performance numbers with multiple beta customers," says company spokesman Mathew Fleming.Trouble is, Fusion-io is still in stealth mode, so even this claim of proof remains to be proven. But there are signs the vendor is on the right track. Founded in 2006 by Rick White, now CEO (ex-Linux and HPC expert), and David Flynn, CTO (ex-entrepreneur of a range of startups), the Salt Lake City-based firm claims to have over 100 paying customers for early versions of its cards. Its technology is also listed on HP's BladeSystem Solution Builder portal among storage developers. There are also unconfirmed rumors that Fusion-io will be a Dell developer, too.

Fusion-io is said to be close to closing a Series A round of funding -- amount undisclosed, but allegedly greater than the $6 million to $9 million figures originally posited by at least one publication.

So far, so good. But Fusion-io has much to live up to. Still, if it can, this startup could end up making big news.

Next Page: IOSafe

This disk backup vendor is another startup looking to tap into users' fears of the unexpected: Specifically, it builds NAS storage devices it claims can survive fires and raging floods.The startup, founded in 2005, offers two products: the four-disk R4, a 3 Tbyte RAID offering for NAS environments; and the S1, a 1 Tbyte, single-disk USB device. Both offerings have Gypsum-based casings, which can withstand up to 1700 degrees Fahrenheit for up to an hour, according to IOSafe founder Robb Moore, who is now the startup's CEO.

"Its kind of like the aircraft black box, but for computer data," he says, explaining that IOSafe also uses a rubberized, water-proof compound around each of the disks in its systems. "We can survive 30 feet underwater for 30 days. It's meant to survive a hurricane Katrina-style event."

IOSafe has also designed a cooling technology called FloSafe, which uses vents in its devices to remove warm air from the internal disks. These same vents close automatically when the outside temperature reaches 200 degrees Fahrenheit.

"If a fire starts, the system is protected from the fire, and from the sprinklers when they go on," says StorageIO analyst Greg Schulz, explaining that this type of technology is extremely useful for SMBs -- or any storage customers requiring on-site data all the time.

"The play for this is anywhere where you need to keep data local in case the network is severed. It's also useful for small environments where you don't have the ability to backup," Schulz says. "In a pharmacy, a bank, or a convenience store, for example, they need to keep certain information on the site in case the network goes down."IOSafe, aptly named, competes with manufacturers of actual lock-box safes, such as Sentry Safe and SchwabCorp.

IOSafe's Moore claims his firm has "hundreds of installations" for the R4 and S1 devices. These include Canadian telecom giant Rogers Cable, food manufacturer Cargill, and the U.S. Fish & Wildlife Service. "We have [also] delivered to various government entities, from cities to counties to federal government," says the exec.

To cope with demand, the startup is now looking to grow its 25-strong workforce. "We're rapidly expanding. I wouldn't be surprised if we had 75-plus employees by this time next year," says Moore.

The CEO is less forthcoming on other aspects of his firm's business, refusing to reveal too much of IOSafe's financials. "It's generally not out policy to discuss our finances," he says. "[But] we are privately funded,[and] at the beginning of this year we reached cash flow positive."

Next up for IOSafe is a new set of products, some of which will be enterprise-focused, some of which will be aimed at new markets. "It's a natural progression for us," says Moore, explaining that these will be targeted at the consumer and small business markets.Next Page: Marner

Secretive startup Marner makes it onto our list because it's tough. Claiming to have taken its core technology from U.S. military applications, Marner touts its SmartSAN hardware as storage for environments such as battlefields and earthquake zones.

Built around a steel chassis and steel hard drive mounts, Marner's flagship product is its SmartSAN 2240 controller, which can handle up to 4 Tbytes of data. The 1U box contains up to 2 RAID controllers and 4 Fibre Channel, SATA, or SAS drives.

What's this have to do with enterprise storage? Ask any government shop; the U.S. military has already urged storage vendors to "battle-harden" their systems. Or ask any data center manager in the weather-beaten southeastern U.S. or on the earthquake-threatened West Coast. Other prospects include users of ruggedized servers, such as certain models of IBM's BladeCenter, who require storage to match.

Martin Fenner, Marner's technical officer, claims demand for tough SANs is burgeoning. His firm's hardware meets the MIL-STD-901D standard for withstanding earthquake-level shock, and the SmartSAN hardware has already been deployed on 100 U.S. Navy ships, including two aircraft carriers, as well within the U.S. Army. "We also have a number of banks and insurance companies that are using it," he says. And he claims SmartSANs are also used in some state governments.Expandable up to 64 Tbytes, Marner touts the SmartSAN 2240 as a good fit for e-commerce, ERP, and XML transactions, as well as storing video images, something which has been identified as a key growth area for storage.

Spun out of Marner Microtechnology in 2005, Marner has not yet revealed its funding, though Fenner says the firm has received angel money from private investors. "We're in the process of getting more money as we speak. That will be professional, institutional money."

With data needs growing in multiple applications that require physical "disaster proofing," that financial input could be money well placed.

Next Page: Nirvanix

Since Nirvanix emerged from stealth mode in September 2007, it's worked fast to claim its slice of the burgeoning market for online storage services.Nirvanix claims to have signed 300 customers for its Storage Delivery Network (SDN) in six months -- all to the battle cry of "The Box Is Dead!" Included are a series of companies that use Nirvanix storage as a backend to their own online storage services.

Like its archrival Amazon S3, Nirvanix charges a monthly fee for the amount of data stored on its hardware, which is accessed via the Web. Unlike Amazon S3, Nirvanix offers SLAs, which accounts for its slightly higher pricing of 18 cents per Gbyte per month for stored data, compared with Amazon's 15 cents per Gbyte. The SDN itself is a 2-Pbyte storage cluster spread across four "nodes" in U.S. collocation facilities.

Nirvanix has said it will add an additional eight clusters or more over the next 12 months, in an effort to bring its total network to as many as 15 nodes.

Can Nirvanix achieve its goals, even as Amazon S3 is joined by other storage-as-a-service providers, including Symantec and potentially EMC?

There are a couple of hopeful signs. Nirvanix is scrappy. Its Web site features a point-by-point matrix comparing its service to S3's. And Nirvanix PR responded gleefully to last week's S3 outage, claiming it could never have happened to Nirvanix.Nirvanix is also solidly funded, with $17 million in funding from some well-known firms, including Intel Capital, which invested an undisclosed amount in Nirvanix in December 2007.

Despite its advantages, Nirvanix, based in San Diego with just 30 employees, has lots of work to do. With the growing roster of big players entering the services fray, startups like Nirvanix will be challenged to the utmost. And given the upcoming scramble for enterprise dollars, no one's future is guaranteed.

But if Nirvanix's efforts so far are anything to go by, this startup's got a fighting chance.

Next Page: Nuova Systems

Some might argue that Nuova Systems doesn't belong on a list of top storage startups, owing to its peculiar background: Since it is funded by Cisco and staffed with key players who helped Cisco break into the storage market, Nuova isn't on a level playing field with other bootstrapped firms.We disagree. Even with a head start, there are no guarantees for even the largest companies these days -- as the latest round of storage earnings demonstrates.

What's more, Nuova is tackling a problem that calls for the kind of sizeable economic and technical support that can come only from companies like Cisco.

That problem is how to consolidate I/O connections in data centers deploying Fibre Channel and Ethernet for backend storage connectivity. As data grows, so do the numbers of NICs and HBAs needed to support the extra volume of storage required. In some cases, that's putting a major strain on servers, not to mention the added energy costs required to keep two or three kinds of data center networks in top form.

The answer, as both Cisco and Nuova see it, is Fibre Channel over Ethernet (FCOE), a protocol that uses Ethernet for physical layer transport while replacing TCP/IP with Fibre Channel in the upper layers.

Nuova's made it clear from the outset that its mission is to develop FCoE technology. Key execs, such as Silvano Gai, have been active with Cisco staffers like Claudio DeSanti in shepherding the spec through the standards process.Nuova's actual product offerings include silicon for HBAs and switches, and the startup has scored at least three major OEM partners ahead of general availability. Last year, a partnership with NetApp and QLogic led to a demonstration of working products at the SNW trade show in October 2007. Another partnership with Emulex was also announced in October.

While Nuova is cagey about its revenues, funding, employee census, and other particulars, these partnerships offer proof of its traction. Also, the FCOE standards effort appears to be progressing with full backing from a range of major storage players.

A lot of work remains to be done. By most accounts, FCOE won't hit enterprise data centers with any force until 2010. But if any startup is in a position to score when the time comes, it's Nuova. This is one to watch.

Next Page: Racemi

Server blade vendor Racemi reinvented itself last year as an automation specialist and is now starting to grab the attention of users looking to provision servers across a SAN.Racemi's flagship software, called DynaCenter, eliminates the need for the heavy-duty processing that typically accompanies server provisioning in IT networks. Instead of sending a layered operating system-plus-applications image across a LAN or SAN to recover or provision a server, DynaCenter sends a basic image that boots up from the network and fools the server into thinking network storage is its own local drive.

"It's not a provisioning process, it's an application deployment process," says Brian Hoffman, Racemi's chief strategist. "Once we start the server boot process, we configure the OS, the network devices, and the storage. Then we map the application and start the application. It could be any type of application, from a single server-type application to a 100-node SAP application or an entire data center."

As an example, Hoffman says Atlanta-based Racemi is talking to one user that's looking to roll out an application across several thousand systems in Europe, North America, and Asia, encompassing multiple data centers.

"They are going to use DynaCenter to consolidate over 80 data centers to one in Europe, two in North America, and one in Asia," says Hoffman.

DynaCenter runs under Windows, Linux, HP-UX, AIX, and Solaris, and it can support virtual machines in VMware. It also supports virtual machines running in logical partitions on a range of systems.Thanks to its integration with virtualization, Racemi's software can help in configuration and provisioning projects that involve both physical and virtual servers. "We handle all the things that VMware doesn't," explains Hoffman. "When you deploy a VM in a disaster recovery environment, VMware does not configure the network and storage surrounding the VM."

Hoffman offers Racemi's partnership with BladeLogic as a further example of DynaCenter's capabilities. "BladeLogic manages all the configuration stuff, they document it, and we act on it."

The startup told Byte and Switch that it has racked up around eight customers for DynaCenter, including CDC Software and Acton, Mass.-based auditing firm Lumigent.

Racemi is looking to increase its 36-strong workforce to over 100 people during the next 12 months, Hoffman says, with a focus on software development, and sales.

The startup, which clinched $3.4 million in A-1 funding from Atlanta-based Pattillo Investments LLC in early 2007, is considering a large funding round this year to fund additional hires and marketing, according to Hoffman.Next Page: Reldata

In a world where SAN and NAS vendors push their particular hardware, Reldata stands out. While it sells disk arrays if you want them, the startup's core offering is a box that virtualizes backend storage for a range of other vendors' arrays.

"Storage is doubling every 18 months. Can storage administrator productivity double every 18 months? No!" declares Reldata CEO David Hubbard.

Reldata's answer to adding expensive storage to multivendor environments is the Unified Storage Gateway, which combines NAS with iSCSI and Fibre Channel SAN connectivity in a box that also supports remote replication across WANs, including synchronous mirroring. Block- and file-level data is fed into the unit, where it is virtualized for distribution across an IP network.

While other vendors, including FalconStor, ONStor, and Sanrad, offer gear that pools and manages a range of backend storage resources, Reldata's packed a lot into a relatively small unit tailored to the SMB/ROBO crowd. Reldata's flagship 9240 box features six 1 Gbit/s Ethernet ports, two Ultra 320 LVD SCSI ports, and two 4 Gbit/s Fibre Channel ports, among other interfaces. There's also an optional 10 Gbit/s Ethernet link for SAS connectivity.All this in a 35 lb., 2U device that starts at $35,000. (Double that amount for a system with integral SAS storage.) The vendor also recently unveiled a new GUI with easy-to-use storage wizards that can help relatively untrained users assign LUNs, set security and performance parameters for storage, and allocate the correct amount of iSCSI storage to specific applications.

On the downside, by virtualizing storage, Reldata users take the risk that if something goes wrong, vendors whose arrays have been attached to its system might point the finger at the virtualization box. And given an increasingly attractive set of solutions from EqualLogic, LeftHand Networks, and others, some SMBs may wish to buy brand-new iSCSI systems, or virtualization bundles in the case of LeftHand, rather than investing in yet more storage equipment.

Reldata's got its following, though. While Hubbard and his team refuse to give out specific numbers of employees, customers, or revenues, the company has racked up a variety of named deployments since its founding in 2005, including Harvey Mudd University, eDirect Impact, Innovative Process Administration, Interactive Media Associates, the University of London, Swiss Metal, and Cambridge University.

There's also a solid partner list, including Brocade, Dot Hill, LSI Logic, Infortrend, Nexsan, QLogic, Microsoft, and Fujitsu, to name just a few.

Bottom line? When it comes to SMB storage virtualization, Reldata's found and niche and intends to stay.Next Page: StorMagic

This iSCSI SAN vendor grabbed our attention last September with the launch of software for tying together server and storage resources in a SAN.

Called the SM Series, StorMagic's solution runs on a standard Windows-based Intel server connected to SAN or NAS arrays. It works with agents on other LAN-attached application servers, such as file, print, and Web servers, to create a SAN.

Unlike rivals LeftHand Networks, IBM, and NetApp, StorMagic's focus is solely on SMBs, which could be a shrewd move at a time of increasing competition in the iSCSI SAN space.

Founded in 2006, StorMagic only emerged from stealth five months ago, unveiling its first customer, Oxford University's Faculty of Medieval and Modern Languages, which uses the SM Series to connect 3 Tbytes of data held in a RAID array from Fibrenetix.The Faculty's IT officer John Edwards told Byte and Switch that StorMagic was chosen over NetApp based on cost, something which is crucial for smaller firms, particularly at a time of growing economic uncertainty.

Despite the fact that StorMagic is still in its relative infancy, the firm's founder and CEO, Hans O'Sullivan, has a solid pedigree of building -- and eventually selling -- startups. Prior to launching StorMagic, O'Sullivan was founder of storage subsystem specialist Eurologic and virtualization vendor Elipsan, which were both respectively acquired by Adaptec, in a $30 million deal in 2003 and a $19.5 million deal in 2004.

StorMagic is still keeping details of its financials under wraps, although the initial signs suggest that the startup is gaining traction. The vendor unveiled its channel program in December and recently clinched a deal to sell its wares to market research specialist Weiss Group.

The startup also has agreements in place with three "well-known" universities, according to Mike Stolz, StorMagic's vice president of sales and marketing. He adds that a partnership with a major European reseller is imminent. This will bring StorMagic's total reseller list to nine.

Earlier this month, the startup also moved into a new office in Eden Prairie, Minn., citing the demands of its growing sales, marketing, and support teams. "We're moving along in our hiring plans," says Stolz. "We have added four salespeople recently, bringing our total headcount to 25, and I am adding staff on a constant basis."Next Page: Teneros

In a world where corporate messages can generate legal exposure and even worldwide scandal, IT pros need to be sure they've got control. That's the idea behind six-year-old Teneros of Mountain View, Calif.

Teneros's stock in trade is its Application Continuity Appliance for Microsoft Exchange, which was unveiled in March 2005. The box sits between the Exchange Server and the network backbone, acting as a sort of uninterruptible power supply (UPS) for Exchange. The box sifts for corrupted data and then replicates Exchange in Teneros's own specialized instantiation of the program. If the appliance detects a problem with the Exchange server, it performs an immediate failover -- so smoothly that users won't detect the difference, Teneros claims.

Besides working with Exchange, Teneros's appliance replicates any backup, messaging, or unified communication app that relies on Microsoft journaling, including Blackberry, Goodlink, Microsoft Mobile, and Cisco Unity, to name a few.

On the downside, Teneros's one-box-per-Exchange-server model has established its reputation primarily as an SMB product up to now. Also, despite its support of virtualization within the box, there's no sign that Teneros plans to run as a virtual appliance anytime soon -- which may or may not affect its scaleability.Teneros competes most closely with block-based replication from Double-Take Software, Neverfail, and XOsoft (now part of CA), as well as with hosted disaster-recovery services. But at least one analyst thinks it has a clear differentiator.

"To me, there is a big difference between data recovery and application recovery," says Arun Taneja of the Taneja Group. He says Teneros, along with a handful of other vendors, including Sonasoft and Cemaphore, maintain "transactional integrity" in applications instead of just replicating block-level chunks of data.

So far, Teneros has managed well, even though it is not yet profitable. The company, founded in 2003, claims to have about 300 customers and 92 employees. And in January, the startup scored $40 million in VC funding, bringing its total to $84.5 million.

That's a big chunk of change. And if progress keeps up at Teneros, it may prove to be a solid investment.

Next Page: XsigoVirtualization startups have been a dime a dozen in the last few years, but Xsigo caught our eye with the launch of its VP780 I/O Director in September.

In a nutshell, the rack mount appliance virtualizes server I/O for both networking and storage purposes. Accompanying software creates virtual NICs and HBAs for servers and storage arrays, allowing "on the fly" setup and/or transfer of applications.

Xsigo isn't the only vendor throwing its weight behind virtualized I/O, which has already been targeted by 3Leaf, and is gaining traction.

Chosen as one of Byte and Switch's top storage products of last year, the VP780, has been certified by IBM, and, more recently, integrated with VMware's Infrastructure 3 technology. HP has also demonstrated interoperability between the director and its server and storage products.

Last year the startup also deployed its technology at Australian managed service provider Infoplex, which is using the directors in its Sydney and Melbourne data centers.Xsigo has since announced another customer, Eutelia, which is a telco service provider, and other deals are on the cards. "There are certainly deals in the pipeline," says Jon Toor, the startup's vice president of marketing. "Let’s just they say that they span service providers, finance, transportation, and telecommunications."

What really makes Xsigo interesting is its management team.

The startup first appeared on our radar in 2005 when Ashok Krishnamurthi, the founding CEO and chairman, had left his post as Juniper Networks' VP of infrastructure products to become Xsigo's founding chairman and CEO, and now serves as the firm's executive chairman.

This was a big deal given Krishnamurthi's status as a very early Juniper employee. Joining him at 100-employee Xsigo is his brother, S.K. Vinod, as vice president of business development. What really elevates Xsigo, though, is a board taken from the server hall of fame. Directors include Vinod Khosla, who helped found Sun; Ray Lane, a former Oracle bigwig; and Mark Leslie, a founder of Veritas Software.

Xsigo's investors include Kleiner Perkins, Caufield & Byers , Greylock Partners, Khosla Ventures (led by Vinod Khosla), and Juniper, although the startup has not yet made any funding announcements.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.

  • Brocade Communications Systems Inc. (Nasdaq: BRCD)

  • CA Inc. (NYSE: CA)

  • CA XOsoft

  • Cisco Systems Inc. (Nasdaq: CSCO)

  • Dell Inc. (Nasdaq: DELL)

  • Dot Hill Systems Corp. (Nasdaq: HILL)

  • Double-Take Software Inc. (Nasdaq: DBTK)

  • EMC Corp. (NYSE: EMC)

  • Emulex Corp. (NYSE: ELX)

  • EqualLogic Inc.

  • FalconStor Software Inc. (Nasdaq: FALC)

  • Fujitsu Ltd. (Tokyo: 6702; London: FUJ; OTC: FJTSY)

  • Hewlett-Packard Co. (NYSE: HPQ)

  • Infortrend Technology Inc.

  • LeftHand Networks Inc.

  • LSI Corp. (NYSE: LSI)

  • Microsoft Corp. (Nasdaq: MSFT)

  • Nanochip Inc.

  • Network Appliance Inc. (Nasdaq: NTAP)

  • Neverfail Group Ltd.

  • Nexsan Technologies Inc.

  • Nirvanix Inc.

  • ONStor Inc.

  • Pliant Corp.

  • QLogic Corp. (Nasdaq: QLGC)

  • Racemi Inc.

  • Reldata Inc.

  • Sanrad Inc.

  • The StorageIO Group

  • StorMagic Ltd.

  • Taneja Group

  • Teneros Inc.

  • Xsigo Systems Inc.

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