Tacit Takes In $16.9M

Funding's a vote of confidence in wide-area file services segment, startup says

May 25, 2004

3 Min Read
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Tacit Networks Inc., a company specializing in wide-area file services (WAFS) software, has scored $16.9 million in a second round of funding, bringing its total to $24.2 million (see Tacit Raises $16.9M).

Tacit's CEO Greg Grodhaus -- who's been with Tacit since founder Tim Williams stepped down from the CEO post last June (see Tacit Turns Up CEO) -- says the new input was "a greater than 60 percent up-round" and will be used to further develop the company's sales, marketing, and support.

He says the funding, which follows the company's first round of $7.3 million in December 2002, should bring the company to profitability by the end of 2005 (see Tacit Makes Funding Explicit). He thinks the WAFS market represents a $1.3 billion to $1.5 billion annual opportunity that's just starting to get tapped.

WAFS is specialized software that caches files and offers centralized, bidirectional access (read/write) to multiple remote sites. [Ed. note: It's also the Women's Auxiliary Ferrying Squadron.] The goal of WAFS is to overcome lags encountered when sending files to remote sites using traditional file protocols, such as NFS for Unix and CIFS for Windows.

Word of Tacit's funding was reported last month in Byte and Switch, and it's not the only encouraging activity in the segment (see Watch Out for WAFS). A small but growing cadre of competitors, including Actona Technologies Inc., DiskSites Inc., Riverbed Technology Inc., and Signiant Corp., also are getting new money and releasing new products.The Plainfield, N.J.-based Tacit contends that it's ramping up at least as fast as the competition. The company has added 13 employees in the past couple of months for a current census of 51. Its product was announced in 2002 and has been shipping since January 2003 (see Startups Take It to the Edge). Tacit claims 21 customers, including two consultancies, Mullin Consulting, a financial services outfit, and Northpoint Software and Services, which offers risk-management advice and software.

A series of new products that make for what Grodhaus calls "substantial additions and expansions to the product line" are set for release in June, and by 2005 the company plans to roll out a product it bought this past March from AttachStor that includes technology for caching email attachments (see Tacit Attaches Patent Portfolio).

Any part of the storage market requires good partnerships, and Tacit's working on that. Among a couple of other deals, the company has an OEM agreement with BlueArc Corp.; and IBM Corp. (NYSE: IBM) is reselling its software in Denmark. Puzzlingly, a surgical instrument firm called Stryker Endoscopy also has a reseller/user relationship with Tacit, though details are... well, tacit

Success isn't guaranteed, though, just because interest in WAFS is growing, as a series of startup failures attests (see Acirro Hits Zero, Storigen Ends With a Whimper, and Zambeelians Reemerge at StorAD). Tacit, too, has had its disappointments. It took nearly three years for its product to ship. And early on, the product was scoped but passed up for resale or acquisition by EMC Corp. (NYSE: EMC) (see EMC Eyes File-Caching Startups).

Grodhaus and others at Tacit say the key to success is product performance. While there's nothing inherently mindboggling about the technology involved, it's tricky to get WAFS packages to deliver remote files as though they were local. WAN protocols, outages, and disruption all need to be dealt with automatically.Leading Tacit's second round was a new investor, JPMorgan Partners. Another new investor, ChevronTexaco Technology Ventures, also joined; and there were contributions from previous investors Canaan Partners, RRE Ventures, and SAS Investors.

Mary Jander, Site Editor, Byte and Switch

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