Software-Defined Storage Startups Win Funding update from November 2013

Primary Data and Coho Data garner substantial financing, but software-defined storage remains more hype than reality.

Tony Kontzer

November 8, 2013

2 Min Read
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Software-defined everything is hot and lately the needle is pointing toward software-defined storage, as two early-stage startups recently received significant infusions of equity.

Primary Data, which won’t even emerge from steal mode until at least the second quarter of next year, announced that it received $50 million in venture funding from Accel Partners, Battery Ventures, Pelion Venture Partners, Lightspeed Venture Partners and Wing Capital Group. The company is developing a data virtualization and mobility product designed to allow data to live outside of storage systems.

Meanwhile, Coho Data, which itself emerged from stealth mode just a few weeks ago, received a $25 million infusion from Ignition Partners and existing investor Andreesen Horowitz. Coho, which integrates applies software-defined networking to scale-out storage has now raised $35 million to date. It plans to make its product, Coho DataStream, available by the end of the year.

For all its hype, however, software-defined storage has yet to deliver on its promise. And with so much money pouring into the SDS space, it’s time for vendors to demonstrate that the hype is warranted, Greg Schulz, senior advisory analyst at IT consultancy StorageIO, said via email.

“Coho just came into the market a few weeks ago with their launch so we need to see how they actually stack up in the real world versus the software-defined demo,” said Schulz. “Software-defined storage has traction and momentum. On the other hand, when it comes to customer adoption or industry deployment, the jury is still out.”

[Read how to classify what makes storage software-defined in Howard Marks' Defining Software-Defined Storage."]

One of Coho’s investors suggested in a prepared statement that he expects that to change soon.

“The team has rebuilt the entire storage array to support the most demanding hyper-scale environments with new software and integrated networking to offer the fastest, most scalable storage system in the market,” Peter Levine, a partner at Andreessen Horowitz, said.

The company said it plans to use its newly attained funding to boost its R&D and go-to-market efforts.

In the case of Primary Data, which is even earlier in its development, Schulz said the diversity it promises to deliver through its technology should be well received.

“Flash, file and object storage, all software-defined of course, certainly plays well for industry adoption or conversations,” he said.

Still, with software-defined storage being defined so many ways, it’s too early to handicap the potential of SDS vendors relative to each other. “Often your best case scenario is an apples to oranges comparison,” Schulz said.

That said, Schulz isn’t surprised that Primary Data -- the brainchild of David Flynn and Rick White, who founded PCIe flash card market leader Fusion-io -- was able to raise so much money. Having a leadership team with an impressive track record certainly fueled its appeal, he said.

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