Storage Virtualization Startups Grab Cash

Storage virtualization continues to gain traction, as evidenced by fresh funding for startups Seanodes and Xkoto today.

Xkoto, based in Toronto, Ontario, announced a $7.5 million Series B round, bringing the database specialist's total funding to $10 million.

The round, led by GrandBanks Capital, also included existing investor GrowthWorks Canadian Fund and has already been earmarked to boost the firm's U.S. presence.

Xkoto, which develops grid software that virtualizes off-the-shelf databases, also reshuffled its management team to support this effort.

Former Novell exec David Patrick will take the CEO's reins from co-founder Albert Lee, who becomes Xkoto's chief strategy officer. The incoming CEO will be based in Boston, Mass., from where he will oversee Xkoto's U.S. push.French vendor Seanodes is another startup looking at U.S. opportunities, clinching $6.5 million in Series A funding today.

Seanodes' round, which was led by French VCs 123 Venture and GALIA Gestion, also included ELAIA Ventures and IRDI/ICSO, follows $3.5 million in seed funding and awards, bringing the startup's total cash haul to $10 million.

"The money will be used for two main purposes," says Frank Gana, Seanodes' business development director. "One is developing our business in the U.S.... [And] we will hire some more engineering and R&D people."

At this stage, Seanodes is barely a speck on the horizon compared to big-name vendors such as VMware and XenSource, but the startup nonetheless claims a new approach to virtualization.

Unlike other vendors, which virtualize servers' CPU and memory resources, using SAN and NAS as repositories for data, Seanodes claims to virtualize the local disk on application servers. This lets users share virtual data directly from machine to machine, limiting the need for external storage, according to Gana.Although Seanodes does not yet have any stateside customers for its flagship Exanodes software, Gana told Byte and Switch that the startup is currently in trials with a number of government agencies and systems integrators.

"We have about four beta sites and we have around five systems integrators who are very close to signing reseller agreements," he says, adding that a number of OEMs are also evaluating the software.

To support this effort, the startup recently opened an office in Boston and is now planning its West Coast base in Los Angeles.

"We will open that office in the next few weeks," says Gana, explaining that the 28-employee firm is recruiting on both sides of the Atlantic.

Within a year's time, Gana expects to have at least 50 people working for the company. Most of the new hires will be in R&D and engineering, and 10 will be based in the U.S., according to the exec.Since launching Exanodes in February 2006, Seanodes has racked up a total of 10 customers for its technology. The most notable of these is the French Nuclear Agency, which is using the software to support its hydraulic and thermo-hydraulic research.

Although French academic labs make up the bulk of Seanodes' clientle, the vendor has also been trialing its software with ISPs, according to Gana.

On the product side, the exec explained that the Series A round will be used to support the roll-out of an enhanced version of Exanodes later this month.

"We're going to be announcing a new version of our software in about a week or so," he says, explaining that this will support over 100 server nodes, compared to the 32 nodes offered by the current version of the software. "We will [also] have improvements in reliability and availability."

Shrewdly, Seanodes is not touting its software as a direct competitor to the behemoths of VMware and XenSource. "Server virtualization software could be bundled with our software," explains Gana. "XenSource and VMware organize and consolidate all the processing power, but don't touch the disk storage at all."The exec told Byte and Switch that Seanodes is currently in discussions with VMware, XenSource, and Microsoft around potential partnerships. "Nothing is signed, but there's huge interest."

Just how far Seanodes can work its way into these vendors' nascent storage virtualization strategies remains to be seen. XenSource, for example, has already teamed up with Symantec around storage virtualization, and VMware recently overhauled its flagship ESX Server with new storage features.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.