Top 10 Storage Startups to Watch

Fall is back-to-school time, and we think our latest Top 10 Storage Startups to Watch have a few lessons to teach the storage world.

As you'll recall, we instituted this list last year, when memorializing the top private storage networking firms had become an exercise in rehashing the same players over and over again. (See Top 10 Startups to Watch.)

Indeed, each iteration of this list recognizes a fresh crop of startups to watch. (Check out how we view our track record for the first round we did. We'll be posting Part II sometime soon.)

There's plenty to pick from: Momentum in the storage market is at an all-time high. As users clamor for more efficient technologies to manage and store data, companies that can meet the demand are successfully launching IPOs or becoming acquired by larger firms. Their upward mobility makes way for dozens of hopeful upstarts.

Lots of these new companies have innovative and sometimes unique solutions for ongoing storage problems. They're also unhindered by considerations about installed base or cannibalization of existing products which certainly factor into the plans of the storage superpowers.This isn't to say we pick anyone that sounds good for our list. Sure, a company must have a really interesting gamble or a creative take on the myriad technologies that populate the storage market. But its impact must be current, meaning it's gotten new funding, launched new products, or added significant partnerships sometime within the last 18 months. All of our picks must also have achieved solid initial funding in the form of an angel round, spinoff support, or an official venture round. And last but not least, these are all companies with partnerships, customers, or contracts in place that prove they're more than vaporware.

One point to note: 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, 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: Agite Software AG

Backup reporting has never been the strong suit of backup vendors. Indeed, their resistance to delivering really comprehensive tools for tracking the status of the backup environment has opened the way for startups looking to cash in on their recalcitrance. (See Backup Reporting Tools Become DPM.)

Agite Software AG is among the most intriguing of these new companies. Founded as a consultancy in Switzerland in 1999, the company relaunched itself nine months ago with fresh funding from an anonymous European technology investor and a plan to bring its software to the U.S.Agite's product, BackupVisual, began shipping in 2002. It works with EMC NetWorker, Symantec Backup Exec, and Symantec NetBackup packages, delivering information on the utilization and performance of disk, VTL, and tape libraries. Data gathered from the backup utilities is stored in an underlying SQL or Oracle database, which, in turn, generates reports.

From its new digs in West Palm Beach, Fla., Agite claims to have added 60 North American customers since January. That brings its total claimed customer base to 200 installations to paid customer worldwide. These include several government agencies and banks in Switzerland, the Swiss branch of GlaxoSmithKline, the toolmaker Hilti, and others listed on the vendor's Website.

Another industry source, who asked not to be named, claims Agite has at least seven "Tier 1" U.S. companies as paying customers.

Agite has also formed a partnership with Sepaton, which acknowledges reselling its BackupVisual software to some VTL customers. Agreements with a roster of distributors that specialize in storage services are also reportedly in the works. These outfits would provide Agite's Web-based backup reporting as a service, in much the same way GlassHouse Technologies is offering Aptare's backup product, which competes directly with Agite's.

How will Agite compete against Aptare, Bocada, WysDM, and others? "We are extremely easy to use and deploy, and we show customers how to save money," says Vaughn Liley, VP of sales for Agite.Further, Agite could distinguish itself if it gets a foothold with large service providers like Arsenal Digital that can help extend the startup's range while leaving it free to be a maker of software.

On the downside, competition is increasing. While Aptare's sales through service providers is just a tiny slice of its business, that company is rapidly extending its reach into capacity planning and other areas. Agite, in contrast, has only eight permanent employees and a constellation of about 20 consultants.

Still, with a new U.S. venue and plenty of ambition, this startup could prove to be the mouse that roared.Next Page: Continuity Software Inc.

Execs at Israel-based startup Continuity Software Inc. live by the notion that every data center has a disaster recovery problem. What’s more, they say they can find the problem and offer a prognosis in 48 hours – or they’ll forfeit the assessment fee.

The company’s RecoverGuard software continually monitors data as it is replicated from the production data center into the secondary or backup center for disaster recovery purposes. The monitoring software alerts administrators immediately about where and why a problem has occurred.Typical issues involve what happens when people make changes to data centers, such as adding volume or removing data bases, that then alter the disaster recovery environment. “People make so many changes… and they test once a year to see if data is lost or not replicated correctly. They come to the test; they see what didn’t work; and then they have to go and fix every single item,” says Continuity CEO Gil Hecht, who was the founder and CEO of database virtualization company Savantis Systems and a VP at software security firm Aladdin Knowledge Systems before founding Continuity.

Hecht contends there are failures in data recovery as much as 75 percent of the time.

Continuity's RecoverGuard software sits on one side of either the production or disaster recovery environment and runs a detection engine similar to antivirus software. “It finds patterns or signatures of problems in the environment,” Hecht says. "It recognizes 1,200 different signatures of problems."

For a comparatively new solution – RecoverGuard was officially released in the beginning of this year, though some customers had been using it for a year previously – the challenge for the company is getting on the radar of CIOs. (See Continuity Intros RecoverGuard.) To do that, Continuity execs convince IT managers to give them 48 hours to monitor and assess their disaster recovery systems at a cost of $15,000, which is not charged if a problem is not found. That hasn’t happened yet, and most of those assessed have become customers, Hecht says.

Despite the claims of success, Hecht would not release an actual customer count. He says the company has users in the financial services, banking, insurance, and telecom markets, as well as in government, intelligence, and the military. Users pay $2,000 per server per year on an annual license.As for competition, companies like CA XOsoft offer solutions that enable companies to conduct more frequent ongoing tests of disaster recovery setups without disturbing the production environment. And still other companies like Tek-Tools offer products that also monitor the DR environment. Hecht also says some prospects choose to adopt an SRM tool or other software with a specific focus on one aspect of the DR setup. “Customers have limited budgets,” he says, adding that it sometimes boils down to choosing between Continuity and another product that might, for example, “check the pipes of a storage area network.”

Continuity is also pretty specialized, which could be a problem for the startup. "They solve an interesting problem, an important problem – but not an urgent problem. It's like SRM [storage resource management]. You can make a great case for it, but it's not urgent enough to get people to spend on it," says one industry analyst, who wished to remain anonymous.

Not everyone agrees. Steve Duplessie, senior analyst at the Enterprise Strategy Group, places the rate of failure of remote recoveries at 40 to 60 percent: "The business risk associated with non-recoverable recoveries is almost incalculable. If standard local backup recoveries fail at a rate of 20 percent plus, remote recoveries are probably two to three times that – and finding out during a real-time crisis is no way to live."

Continuity has garnered $6.5 million in funding, which mainly came from Israel's Giza Venture Capital, but was also supplemented by the Israeli Chief Scientist. As a result, the company, which has 30 employees, has sales offices in New York, Boston, Atlanta, and Hertzliya, Israel. The Israel office is also the base to serve Europe. Offices on the U.S. West Coast and in Europe will follow this year. In addition to building its own sales force, Continuity is working with large vendors like EMC to sell its software. In the coming months, the company expects to announce a number of partnerships with service providers.

What about the chance of acquisition? Companies are acquired, they don’t sell themselves, Hecht says. “We are not for sale.” Next Page: Desktone Inc.Little known desktop virtualization company Desktone made a splash in June when it snagged $17 million in funding from a group of venture capital organizations, as well as from Citrix Systems, which has itself made a play in the same arena. (See Desktone Secures $17M.)

The Series A round was co-led by Highland Capital Partners and SoftBank Capital and also included China-based Tangee International.

Citrix, China, big-name VCs… Clearly, something's drawing attention to Desktone. Specifically, it's the startup's approach of "owning the whole problem” of implementing desktop virtualization, instead of solving just one aspect of it.

Citrix, for example, offers server-based computing and a management system that enables virtualization, which are major parts of a desktop virtualization solution, but not the only necessary elements. Citrix is not yet able to offer the entire package as a hosted service. (See Wanted: Virtual Desktop Services.)

“Lots of companies only own pieces of the problem,” says Desktone COO Paul Gaffney. “If you were an in-house IT shop you would have to buy thin client devices from one vendor and make a choice about a virtualized platform. Then you would need to buy or build components between the user and their virtual machine." He adds that those are only a few of the pieces.In contrast, Desktone works with a web of companies to package all the pieces with its own software that ties it all together. Desktone’s vDesktop aims to virtualize storage, applications, client devices, servers, processing, and network technologies – and to control them all from a single management console.

Desktone, which was founded in 2006, is not the only company attempting to offer whole solutions for desktop virtualization. Other startups like Kidaro and Dunes have been dubbed “virtualization brokers,” but each company has its own approach. (See Desktop Virtualization Brokers Emerge.)

Dunes characterizes itself as a "process automation" supplier because it ties "runbook automation" software to virtually any business process. Kidaro offers a virtualization manager solution with what CEO Kevin Brown calls "an infrastructure to centrally deploy, manage, secure, and ensure the user experience." But neither Dunes nor Kidaro claims to offer a package to manage the entire desktop virtualization process.

Citrix appears to have ambitions of offering a comprehensive solution. Its recent $500 million acquisition of XenSource seems to be one aspect of this goal. Its support of Desktone is another. (See Citrix Bags XenSource for $500M.) “There is more than one way to skin a cat,” says Dana Gardner, an analyst at Interarbor Solutions. “The approach may be to fund companies and at the same time build out infrastructure that can support them.”

Desktone’s vDesktop solution can either be an appliance-like solution with pre-configured server hardware, software, and client devices, or it can be a hosted solution running the infrastructure in a third-party data center. Desktone’s vDesktop costs $65 per user, per month.“What they are spending now on physical desktops is dramatically higher than that,” says Gaffney, adding that the number of helpdesk calls drops dramatically when virtualization is implemented, and frequent reinstalls are much easier. In addition, he notes that thin clients are cheaper than desktops, and security becomes easier in the virtual environment.

Currently, Desktone claims to have sold 1,500 seats in just a few accounts – though Gaffney didn’t give an exact number. At least one or more are financial services companies, he says. Gaffney expects the number of seats to grow to a “high five-figure or low six-figure” number in about a half dozen accounts over the next two years. The company is also working to partner with larger business service providers like Verizon Business, IBM, and HP that have further reach into companies with desktops. If that works out, Gaffney expects the company to never need a large sales force of its own. Desktone now has about 20 employees in the U.S. and another 20 in offshore development in Shanghai.

As for competition, Gaffney says the biggest concern comes from in-house IT shops that insist on patching together all of the components themselves. “Somehow the technology community has gotten themselves enamored with understanding all the parts,” says Gaffney.

Like all good marketers, Gaffney offers an example. He says desktops are as crucial and as basic a necessity as telephones, but telecom managers are happy to let their service providers take care of the whole equation. “You never hear anybody asking what type of switches AT&T deploys to the street.”

Desktone’s CEO is Harry Ruda, who was the founder of application virtualization company Softricity, which was acquired by Microsoft last year. (See Microsoft Makes Virtualization Play.) He may have the right connections, and perhaps the right product, to make it work again. Next Page: Ocarina NetworksOcarina differs from other startups on our list because it's still in stealth mode. But we're reasonably sure this outfit's on track to compete effectively in the scramble to lessen storage bulk.

Ocarina execs won’t discuss the company’s core technology until its official launch, planned for late this fall, but sources tell us the company will debut with data compression technology for primary storage devices as well as ones involved in backup.

Analyst Arun Taneja of the Taneja Group says the closest competitor to Ocarina will be Storewiz, which compresses data as it travels from server to storage array.

If Ocarina proves a real competitor to Storewiz, that will be significant, given Storewiz's success so far: That vendor reportedly shipped 200 data compression devices to 80 customers around the world as of June 2007. (See Storewiz Notches $9M.) Among its customers are heavy hitters in the oil and gas industry like Halliburton, thanks to a reseller deal with systems integrator Landmark.

Like Storewiz, Ocarina will compress data used in primary storage applications, as opposed to data de-duplication, which reduces the bulk of backed-up data by breaking files into segments and backing up only changed segments. (See Insider: De-Dupe Demystified, Data Domain Goes Public, Storage Bubble Wrap, Quantum Gains on Rival's IPO, and De-Dupe Vendors Shake Hands.)So far, vendors promoting de-duplication, including Data Domain, Diligent, and Sepaton, haven't focused on primary storage devices, such as EMC's Symmetrix and Clariion boxes. (See EMC Talks Disk & De-Dupe, NetApp De-Dupes, and De-Dupe Deep Dive.)

If speculation holds true regarding Ocarina’s technology, there are ups and downs to consider. First, the downside: "Compression and compaction might give you a lower data reduction rate than de-dupe,” says StorageIO Group analyst Greg Schulz. Storewiz touts compression ratios between 2:1 and 5:1, depending on the type of data and application, compared to ratios anywhere between 20:1 and 50:1 for de-duplication. (See Sepaton Adds De-Dupe to VTL and Analysis: Data De-Duping.)

The upside of compression? “It will give you that ratio consistently." Schulz explains that users can typically get a more reliable level of performance from compression than data de-duplication. (See Experts Share De-Dupe Insights.)

"Compression is more streamlined today across wider ranges of applications and data types, levering algorithms and acceleration technologies that have had longer time to mature," says Schulz. "De-dupe is still relatively in its infancy. Over time, it will find its way more transparently into different technologies and across more applications, similar to how compression can and is being deployed today."

Ocarina, based in San Jose, Calif., seems to have the finances necessary to join battle with Storewiz. It recently got funding from Kleiner Perkins Caufield & Byers and Highland Capital Partners. Although Ocarina won’t release an exact financing figure, sources say it's between $10 million and $11 million.Ocarina's management team includes Murli Thirumale as CEO. Thirumale was the group vice president and general manager of Citrix's Advanced Solutions Group, where he was responsible for the Access Gateway and Application Gateway product lines. (See Citrix Widens WAN Strategy, Microsoft, Citrix Expand, and Intriguing Equation.)

Prior to joining Citrix, Thirumale was co-founder and CEO of SSL specialist Net6, which was acquired by Citrix for $50 million in 2004. (See Citrix Buys SSL Vendor Net6, Net6 Cooks Up New Batch of VPN, and Net6 Releases Hybrid-VPN Gateway.) This followed stints at telecom specialist Symmetricom and HP, where Thirumale spent seven years as a general manager.

Another former Citrix and Net6 exec, Gautham Rao, is Ocarina's CTO. Ocarina's Withers formerly ran business development at clustering specialist Isilon. (See Isilon: The Honeymoon's Over, Isilon to Power Nedstat, and Isilon Announces Results.) Another recent addition is Carter George, the one-time VP of corporate development at network file virtualization vendor PolyServe, who is now Ocarina's VP for products. (See PolyServe Pulls in $19.5M.)Next Page: Pivot3 Inc.

It’s been a busy couple of months for Pivot3 Inc. since it released its clustered IP storage devices in June. Courting the video surveillance vertical markets, which are not quite accustomed to large-scale storage just yet, Pivot3 has managed to sign eight customers and has a “strong pipeline” to a dozen others with its newly patented technology.

The Spring, Texas-based firm dubs its offering as the first distributed RAID system. In a nutshell, Pivot3 has developed block-level virtualization software, running on an Intel-based server, which it describes as RAID Across Independent Gigabit Ethernet (RAIGE). (See Startup Pivot3 Eyes Video.)Pivot3's concept is that the virtualization software removes the need for a traditional RAID controller, such as NetApp's filer head, while ensuring that data is written across servers in a cluster. Each server, or "databank," contains up to 9 Tbytes of storage and can be clustered with others. Pricing for the individual servers, or RAIGE devices, which are available now, starts at $22,500.

Jeff Bell, Pivot3's vice president of marketing, tells Byte and Switch that RAIGE offers up to five times the throughput of a standard RAID system. "We can drive higher performance by virtue of not having a controller that funnels all of the I/O through it."

Pivot3 has set its sights on a specific vertical market, for now. That market is the public safety arena, where video surveillance is used in police cars, interrogation rooms, and crime prevention programs. “City governments are beginning to offer better citizen protection through video surveillance, and there are new requirements in the chain of custody and maintaining video for a longer period of time when it comes to evidence. We’ve got a way of addressing that,” says Bell.

More and more storage vendors are eyeing opportunities in the video surveillance market, thanks largely to an upswing in Department of Homeland Security spending over recent years. (See Input: Cyber Security Spending to Grow.) Last month, for example, Cisco bought IP-based video surveillance software vendor BroadWare, which followed a flurry of announcements from the likes of Intransa, Neterion, and Fujitsu. (See Cisco to Acquire BroadWare, Fujitsu Intros Hard Drive, Intransa in Transition, Neterion Picked by Intransa, and Fujitsu Intros Hard Drive.)

Pivot3 has also found its way into the casino and gaming markets. “Casinos have new mega-pixel cameras, which are creating huge pictures and videos… They blow out their storage capacity,” Bell says. Previously, casinos stored video on DVR-type appliances or tapes, which are no longer able to handle the bulk of data required.Apart from these initial target markets, Bell claims to be talking to companies that offer data backup services for organizations with large backup streams. “It’s an easy switch as far as the technology, and we’re not going to turn down the business."

Pivot3 faces competition from iSCSI vendors like Intransa, LeftHand Networks, and EqualLogic, which also play in this space. (See iSCSI Gang Talks Big, LeftHand Adds 10-GigE SANs, EqualLogic: Thin Is In, EqualLogic Tops Offs SAS Series, and EqualLogic Unfurls iSCSI Flag.) Bell says the Pivot3 sales team also has seen some competition in the streaming realm from Isilon, and it has run into Nexsan in the storage space, though that company doesn’t have a clustered product.

In the video arena, the biggest competition, Bell says, comes from the old way of doing things. “The idea of putting in a scaleable, flexible network is new for video surveillance."

On the downside, Pivot3 is entering a market with lots of competition. "I think that we're in the infancy stages of iSCSI, but they are relatively late," says Taneja Group's Taneja. Still, it's possible Pivot3 could make up for lost time given its claim to support video and throughput-intensive applications with an emphasis on security. Also, Pivot3's claim to halve the amount of storage needed through its block-level virtualization could spell good news for users. "They do have some architecture advantages that will transfer into real money," adds Taneja.

The company plans to continue to upgrade its technology. Next on the roadmap is a 72-Tbyte RAIGE device, as well as “a lot of application integration.” Bell says the company will continue to identify “ecosystem” partners and engineer interoperability with their software.That will eventually lead to an expansion of the company, which now has about 50 employees. Bell expects to see a growth spurt in all parts of the company, including sales and development by the early part of 2008. With that, the company will begin to look overseas, including the U.K., which has a robust video surveillance market due to its history of terrorist attacks. Pivot3 also has received a lot of attention from Asian organizations and will address that with a marketing push further down the line.Next Page: ProStor Systems Inc.

Two years; more than $18 million in funding; two solid OEM deals. ProStor Systems Inc. has staked its ground among the mounting competition to provide fast, cheap, removable disk systems that offer an alternative to tape.

ProStor introduced its removable disk cartridge technology, dubbed RDX, as a way to combine the accessibility and speed of disk with the portability and low cost of tape. RDX debuted for small and medium-sized businesses in November 2005. But the company didn’t announce its first OEM deal with Tandberg Data until the following April. Tandberg sells ProStor’s 2.5-inch RDX drives with capacities of 40 Gbytes, 80 Gbytes, 120 Gbytes, and 160 Gbytes, the last just added in January. (See ProStor and ProStor Adds Removable Cartridge .)

Several months after the Tandberg deal closed, ProStor added another OEM, Imation Corp., which began marketing the RDX technology under its own brand name. This past April, Imation extended that agreement. To date, ProStor claims to have an installed base of more than 25,000 internationally.

It's all part of a larger plan that seems to be unfolding successfully. "Our strategy is to bring additional partners onto the RDX bandwagon and have this become a multi-vendor de facto standard in the industry," ProStor’s CEO Steve Georgis told Byte and Switch in 2006.Despite its success so far, ProStor can hardly claim de facto standardization. But it is not alone in its ambition. Quantum rolled out its GoVault removable disk drive and picked up IBM as an OEM partner in June 2006. (See IBM OEMs Quantum GoVault.) Earlier this year, Olixir unveiled its SC-1000, a hardware card that slots into the PCI-X slot on a server or PC. The card encrypts and compresses data, which is then sent to the startup's FastRestore backup device equipped with Olixir's removable Mobile DataVault drives. (See Olixir Gets Tough on Tape.)

To help distinguish itself from competitors, ProStor is aggressively seeking compatibility with data protection software from critical providers. Currently, ProStor's RDX disk systems are compatible with numerous recovery software products, including CA’s ARCserve Backup, EMC’s Retrospect, Symantec’s Backup Exec, CommVault’s Galaxy data protection software and Galaxy Express, EncryptX’s SecurMedia automatic encryption software, and Yosemite’s Backup.

Next on ProStor’s roadmap is to “migrate” RDX from SMBs to the larger enterprise. “Our market strategy was to start at the bottom and move up. Over the next several years, we will develop higher-capacity, higher-performance systems,” Georgis says.

The CEO says RDX drives will double every nine months or so, starting with a 300-Gbyte disk available this year.

Boulder, Colo.-based ProStor’s $18.4 million in funding came from Sutter Hill Ventures, New Enterprise Associates (NEA), and Boulder Ventures. The latter two were the company’s initial investors. (See ProStor Completes Funding.)The company now has 45 employees.Next Page: Qlusters Inc.Qlusters Inc. has taken on the likes of HP and IBM with its open-source management and provisioning software for virtual and physical systems. And it has managed to sign more than a couple of hundred customers and land $33 million in funding. (See Qlusters Closes $10M Series C.) But the company didn’t follow a direct path to its current status.

When it was founded in 2001, Qlusters set out to enable enterprise customers to migrate from mainframe servers to less expensive and bulky commodity servers running on Linux. (See Qlusters: Pioneer of the Linux Qlass.) But the rapid uptake of blade servers and a market shift toward virtualization caused Qlusters execs to rethink their strategy. To them, it seemed the “missing piece” they could contribute to the Linux world was strong management and provisioning software, particularly for clustering and virtualized environments. Around 2004, the company changed course, and in 2006 it released its OpenQRM application, which can manage up to thousands of servers in a large enterprise environment, as well as a large virtual environment based on software from Xensource and VMware. (See Qlusters Intros openQRM Pro.)

OpenQRM manages and automates various activities on physical or virtual servers. For instance, it monitors provisioning on physical servers, and it automates the deployment of a hypervisor layer on virtual servers. It can also allocate different applications to machines, both physical or virtual, according to set policies. Once the applications are running, the software continually monitors their use.

“One management console can manage virtual and physical environment technologies,” says company CEO Ofer Shoshan, who founded Qlusters.The open-source nature of the offering means that the software can interact with Linux, Windows, or Unix systems and can support both VMware and Xen, he maintains.

The ability to interact with a range of architectures could be a selling point for Qlusters against its competition, which includes IBM’s Tivoli Orchestrator and HP. Further, Qlusters says its software will not become obsolete no matter what the future holds for the company – an encouraging factor for customers who have taken a chance with the young startup. “I must say we have never lost a deal to a competitor,” Shoshan claims. "These guys are bigger and stronger, but we have a very solid and seasoned enterprise-grade solution."Analyst Joyce Becknell of Freeform Dynamics says there is no question that HP and IBM have “more mind share and customer experience” than a company like Qlusters. “However, [HP's and IBM's] products are frequently beyond the price range of many customers, particularly in the midmarket, and their solutions are also designed for large enterprises, so they aren’t always appropriate for mid-sized companies,” she notes. In addition, if an IT shop uses mostly IBM, “they are unlikely to consider HP, and vice versa. Qlusters is hardware independent so it becomes a viable alternative.”

While being open source has its lure, it can also have its downsides. “The main drawback of Qlusters lies in the fact that they are open source," says Becknell. "That isn’t really a technological problem per se, but it will cause some customers to hesitate. Some companies still think that open source means free software that isn’t as good as software owned and developed by a single vendor. That’s perception, but it exists. These are issues that the entire open-source industry faces.”

Qlusters has tried to battle this perception. In an effort to encourage growth and integration of open-source systems, the company founded the Open Management Consortium, with an initial goal of getting several vendors’ management systems to interoperate. Unfortunately, the initiative did not work out as well as Shoshan expected, for reasons he doesn't disclose.

Shoshan hasn't given up. In a few months, the company will announce another working group with similar goals. “In the past, the big systems management vendors came with the approach that they would provide the complete umbrella, which is not the right approach to integrate and leverage what you already have in your data center. With open architecture, the goal is integrating with other vendors,” says Shoshan.

In July, Qlusters announced it had received $10 million in Series C funding, led by its existing investors Benchmark Capital, Israel Seed Partners, Duff Ackerman & Goodrich, and Charles River Ventures.Shoshan says this latest round of funding will be used to expand all aspects of the company. “We are going to use the funds to continue to grow and penetrate into more accounts faster, and we are planning on reaching for stability,” says Shoshan, adding that right now the company, which has 50 employees and is hiring, is focused solely on the North American market. As for technology, the company will work on stronger integration in both virtual and physical realms.Next Page: 3Leaf Systems Inc.

Garnering $32.5 million in funding, 3Leaf Systems Inc. marched solidly into the storage market this May with a product that virtualizes control of I/O among SANs, LANs, and NAS. (See 3Leaf Sprouts Up.)

3Leaf's goal is to streamline the utilization of x86 servers, which are typically deployed as less expensive alternatives to mainframe and Unix boxes. Despite widespread use, these servers are often not used to capacity, and their reliability is frequently questioned.

3Leaf's V-8000 Virtual I/O Server aims to improve this profile by creating what the startup calls a Virtual Compute Environment (VCE) using rackmounted commodity x86 servers. The V-8000 assigns a worldwide name or MAC address to the LUNs and NICs in the rackmounted servers, then load balances across the VCE. The load balancing automatically ensures each server gets adequate I/O processing, but the function can be configured according to user-defined policies as well. Hence, one application can be tagged to get more I/O than others.

Each V-8000 comes with two AMD Opteron dual-core processors and two 250-Gbyte SATA II disk drives. The box connects to a maximum of 20 commodity rackmount servers supporting any OS via a 10-Gbit/s fabric (either InfiniBand or Ethernet). Typical setup calls for multiple V-8000s configured redundantly.On the client side, each V-8000 can be configured with four to 12 Ethernet ports at 1 Gbit/s, or two to 14 Fibre Channel ports at 4 Gbit/s.

"The solution is aimed at users such as hosted service providers that require mainframe-style availability, which has long been lacking in x86 servers. We're trying to bring the capacity of large systems to low-cost commodity x86s," Sash Sunkara, chief business officer and co-founder of 3Leaf, told Byte and Switch in April.

Despite this aim at cost consciousness, 3Leaf's product isn't cheap. The V-8000 is priced at roughly $100,000 for two units capable of supporting 20 to 40 servers.

3Leaf's onto something, though. Both HP and IBM are 3Leaf partners, and, early in August, the startup announced interoperability of the V-8000 with IBM BladeCenter servers. (See 3Leaf Joins BladeCenter Alliance.)

This doesn't preclude the big boys from threatening 3Leaf with their own wares. HP offers a capability similar to 3Leaf's in its Virtual Connect product for the HP BladeSystem, and IBM is reportedly working in this area.There is also the challenge of competing technology that may capture 3Leaf’s market with a different approach. One example is the Cachefx appliance by Gear6, which aims to improve file delivery by caching files from RAM. (See Gear6 Shifts Into Caching.) Still, at $400,000, that product is clearly a bigger threat to the IT wallet.

For now, 3Leaf seems to be picking up business. The company has signed six customers since the box began shipping in May, and company execs say they expect to have 20 users total by year’s end – though they decline to specify any clients. Thus far, enterprise users have been financial services companies or application service providers, execs say.

The next goal on 3Leaf’s roadmap is to bring virtualization to CPUs. In this extended technology, Intel processors will be incorporated in the VCE.

Notably, Intel Capital led 3Leaf's latest $20 million investment round, which closed in September 2006. Other investors include Enterprise Partners, Storm Ventures, and Alloy Ventures.

Founded in 2004, Santa Clara, Calif.-based 3Leaf has roughly 55 employees. It recently hired ex-Citrix VP B.V. Jagadeesh. Former CEO and co-founder Bob Quinn (ex-Network Virtual Systems, Unisys, and Exxon) will continue as chief technical officer. Other execs include chief business officer and co-founder Sash Sunkara (ex-Brocade and Precision I/O); technical director and co-founder Scott Lurndal (ex-NanoBiz and SGI); and technical director and co-founder Isam Akkawi (ex-Network Virtual Systems and Nvidia).Next Page: Trigence Corp.Application virtualization is steadily growing as an adjunct to the storage market, and so is software startup Trigence Corp.

Like other app virtualization wares, Trigence's AE product is meant to eliminate hassles and costs associated with having to configure and maintain applications on an increasingly numerous and diverse set of enterprise desktops and servers. AE is aimed at cutting expensive and time-consuming regression testing and migration services and reducing the amount of storage that needs to be used for backing up applications.

Trigence's AE works by isolating an application from a particular underlying operating system or server. It uses a combination of C, C++, and Java to “wrap” individual data center applications and, in response to GUI commands, move them to another location. AE runs under Windows, Linux, and Unix. (See Startup Shifts Applications and Trigence Intros AE 3.0 for Windows.)

Customers can purchase Trigence AE by subscription or on a permanent license basis. If doing the latter, they'll pay $25,000 for a "creator" element that enables the virtualization, plus an additional $5,000 for every application that's virtualized.

Trigence competes against a growing roster of suppliers, including Thinstall; Altiris, the Symantec subsidiary; Citrix, with the latest release of its Presentation Server, Platinum Edition; Endeavors Technologies; and Microsoft, via its SoftGrid product, acquired when Redmond purchased Softricity in May 2006. (See Microsoft Makes Virtualization Play and Application Virtualization Takes Hold.)Trigence aims to cover a broader range of environments than its competitors, and officials claim its support of both desktops and servers is a plus. Also, the vendor says it does not require application streaming, which is offered as a delivery mechanism by some competitors. And the virtualized application incorporates visibility into other applications, allowing Outlook users, for instance, to trigger related links in email messages. Apps also have awareness of services such as printer drivers.

On the downside, the company can't name a single customer, though in February of this year CEO David Roth told Byte and Switch that Trigence had roughly 20 paying customers in areas such as financial services, communications, and the government sector.

Despite the lack of customer identification, Trigence can point to a handful of impressive partnerships: Sun resells its package, and Novell, HP, and RedHat have joint marketing agreements with the startup. All this adds some credibility that's missing from the company's customer claims.

The next few months will be decisive ones for Trigence, as it looks to stay ahead in an increasingly competitive market, while expanding into Europe. The vendor, which is based in Ottawa and in Jersey City, N.J., has a roster of about 40 employees, which CEO Roth says will grow to roughly 50 this year.Next Page: Varonis Systems Inc.

Snagging 70 high-profile customers with more than 200 installations in just a couple of years, Varonis Systems Inc. addresses a problem that companies everywhere face – securing unstructured data and automating safe access to it.Don't be misled. Varonis is not a security package. Instead, it provides information that helps customers make security judgments.

Unstructured data is proliferating, and so is its nuisance value. Most companies have issues with overwhelming amounts of PDFs, spreadsheets, and other arbitrary files that clutter servers and can be randomly accessed by employees. Methods abound for storing these files on Windows servers, but these solutions don’t give visibility into security issues. Varonis’s product continually monitors user-to-file interaction and then recommends access privileges based on need.

The startup's flagship product DatAdvantage gives detailed reports about users who access files on Windows-based NAS systems and file servers. Access activity is broken out by individual, data grouping, time of access, or IP address, and recommendations for access privileges are made based on these criteria.

The third release of the software, issued in July, includes enhancements in search, scaleability, and reporting. (See Varonis Enhances DatAdvantage.) The new version also triples the number of file servers from which information can be gathered, enabling users to add new servers to the system as their businesses expand. Reports from the updated product are also more detailed, including sensitive folder access, inactive data sets, and inactive users.

Varonis DatAdvantage deploys agent software on file servers – something many IT pros don't like – and uses APIs on the NAS boxes to compile this data. According to Varonis, the software can also reveal when the files were created, reopened, or renamed. (See Varonis Goes for the Lockdown.)Former NetApp exec Yaki Faitelson, Varonis co-founder and CEO, tells Byte and Switch that the idea for the technology was born out of his past experiences in professional services: "One of our customers did a storage consolidation and deleted massive amounts of data. 'Who did this?' they asked."

Varonis’s clients now include publishing giant Condé Nast, New York’s Museum of Modern Art (MoMA), Juniper Networks, Massachusetts Financial Services, Sharp Healthcare, and Children's Hospital and Health System, as well as flash memory specialist Msystems, which was recently bought by SanDisk. (See SanDisk Buys msystems.)

As an early adopter of DatAdvantage, Steve Peltzman, MoMA's CIO, tells Byte and Switch that some high-profile security breaches of the last few years prompted the data lock-down. "We have sensitive art data and sensitive donor data. If that were to be touched, we would be in big trouble," he says.

Although he did not go into specifics, Peltzman explained that MoMA is using Varonis to identify data that hasn't been touched for long periods of time – in some cases, years. The museum is also using the software to identify unusual data access patterns, such as a specific computer bombarding a file server with requests for information.

Varonis says its key differentiator from competing suppliers such as CA and IBM is its ability to help determine who gets access to what. "Varonis is basically trying to automatically figure out who has access to data, and who shouldn’t," says Ted Friedman, research vice president at Gartner.The analyst warns that the startup faces a huge opportunity, but it needs to think seriously about expanding into structured data if it wants to make the most of it. "People also care about ensuring that they have access control on their structured data, too," says Friedman.

Though Varonis is now limited to Windows-based file systems, execs say the Unix and NFS versions of DatAdvantage will go beta this coming October and be released in the fourth quarter of 2007.

Pricing for DatAdvantage depends on the number of users, although a license for a typical deployment of 50 to 250 users starts at $25,000.

Started in 2005, Varonis has received $13.5 million in funding from Accel Partners, Evergreen Venture Partners, and Pitango Venture Capital. The company has 75 employees and is looking to double in size in the coming year.

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