Where Are They Now? A Look at Past Top 10 Startups

With spring and its promise of warm weather just around the corner, it seems a good time to revisit last summer's list of Byte and Switch Top 10 Storage Startups to Watch.

This is the third of a series of self-reviews. Over the last few months, we have revisited our first and second rounds of startup lists to see how the companies we picked as "top tenners" have actually performed.

It hasn't always been easy to pick up the track, as you'll see. But we've persisted, in an effort to sift the good from the better --- and the not-so-good -- in our past picks.

This article reviews the list we made in August 2008 -- an eclectic bunch, with offerings from security and removable media to application virtualization, all scrambling to make their presence felt in an increasingly tough economic climate.

As with our previous follow-ups, we've completed our soul-searching with rankings according to the following scale: 5 = outstanding choice; 4 = good choice; 3 = not a bad choice overall; 2 = what were we thinking?; 1 = egg facial.As ever, you may like or dislike what you read here. Feel free to hit the message board, write to us individually, or email us at [email protected].

The List:

Next Page: Agite Software AG

This is not the easiest of times for backup reporting specialist Agite Software AG, which this week announced that it had terminated its relationship with its U.S. distributor.

"We regret that this step has been made necessary," states a note on the Website of Switzerland-based Agite Software AG, explaining that its U.S. distributor and partner, Agite Software LLC, is no longer "authorized to sell, offer to sell, or represent any Agite products."When he was contacted by Byte and Switch earlier today, Agite Software AG's CTO Ueli Schweizer refused to say what led to the termination, other than confirming that the companies had "some contractual disputes."

In addition to the U.S., Agite Software LLC also distributed the Swiss vendor's wares in the U.K., Ireland, and South Africa, although Schweizer is putting a brave face on things. "We will sell direct from our Swiss office until we find out how we can go on," he says, but he admits that this is not a perfect scenario, particularly for the U.S. market, which is at least six hours behind central European time.

"I know that it's very difficult to serve U.S. customers from Switzerland, but we're in a position to find a solution," adds the exec, explaining that the vendor is already on the lookout for other American distributors and resellers. "We're definitely trying to set up a distribution channel in the U.S."

At the heart of this effort is Agite Software AG's flagship Backup Visual product, which competes with offerings from Aptare, Bocada, and WysDM. "I dont think that this is the end for Backup Visual in the U.S.," says Schweizer.

Backup Visual, which is also resold by Sepaton to some VTL customers, works with EMC NetWorker, Symantec Backup Exec, Symantec NetBackup, and Tivoli Storage Manager, 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.Despite its problems with U.S. distribution, Agite Software AG has been on a tear to expand its global presence over recent months, and is also eyeing Asian opportunities.

"We have just opened up a new distributor in Korea, and we hope that we can enter the Chinese market within the next three months," says Schweizer, outlining the vendor's plans to add to its Asian customer base, which already includes giants LG Electronics and Korean Telecom giant KTF.

The CTO estimates that more than 40 of its 350 Backup Visual licenses have been sold since last summer. The firm is also planning Backup Visual version 3, which will be launched in late April or early May.

"This will be a major version," Schweizer says, explaining that the vendor is adding support for HP's Data Protector and applications running on full 64-bit versions of Windows.

Clearly, there is still plenty of work to do before Agite Software AG establishes a real presence on this side of the pond.Rating: 2 out of 5

Next Page: Continuity Software

Disaster recovery specialist Continuity Software has been amongst the busier startups on the Top 10 list, ramping up its sales efforts and unveiling a new version of its technology.

Previously reticent about discussing customer traction, the American/Israeli vendor now claims "tens of customers" both in the U.S. and Israel, according to Avi Stone, Continuity's director of marketing.

"We have customers in the states that are some of the top 10 largest banks and we also have one of the largest electrical companies," he says, adding that several telecom firms are on Continuity's roster, along with several Israeli military and government agencies."Back in August, we only had customers in Israel and had just a few U.S. customers in the pipeline," explains Stone.

Launched early last year, Continuity's flagship RecoverGuard software sits on one side of either the production or disaster recovery environment and runs a detection engine similar to antivirus software.

RecoverGuard 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 then alerts administrators immediately about where and why a problem has occurred.

Last month, Continuity launched DR Assurance, a version of RecoverGuard aimed at companies that lack the resources to constantly monitor their own systems. "We launched it because some of our customers didn't have time or resource to allocate a professional to access RecoverGuard and go over the disaster recovery on a daily basis."

With DR Assurance, Continuity runs these checks from its own data center, sending users weekly and monthly reports, although the vendor will also notify its customers immediately if it notices a major problem.Continuity Software, which is based in New York with an R&D facility in Israel, is continuing to ramp up its global presence, according to Stone.

After opening offices in Boston, Texas, and Chicago, the startup is looking to expand its presence on the West Coast, as well as in Europe. "We get many, many requests from companies in Europe to test our offering, and [Europe is] very close to Israel," Stone says. "We're talking about having some partnerships so that the major players will resell our products there."

The vendor, which as a partnership deal in Israel with EMC, is also in discussions with a number of vendors to forge relationships in the U.S., although Stone would not say which companies are involved.

With $6.5 million in funding raised to date, Stone also confirmed that Continuity is on the prowl for more money. "We're in the process of second-phase fund-raising, but we can't provide you any more information."

There is a growing amount of attention focused on the disaster recovery market, thanks largely to NetApp's acquisition of Continuity's rival Onaro for a rumored $120 million earlier this year. This followed EMC's acquisition of Israeli startup Illuminator's IP last summer in a deal said to be worth under $10 million.Continuity's Stone said that, at this stage, Continuity is not acquisition bait. "We're not for sale," he says. "That might change if we get an offer that we can't refuse, but it's not our strategy now."

Whatever Continuity's exit strategy, the company certainly seems to be moving in the right direction.

Rating: 4 out of 5

Next Page: Desktone

Little-known desktop virtualization startup Desktone made it onto the August Top 10 list after snagging $17 million in funding from a group of investors that included Citrix and China-based Tangee International.The vendor's vDesktop offering aims to virtualize storage, applications, client devices, servers, processing, and network technologies -- and to control them all from a single management console.

Last summer, Desktone claimed to have sold around 1,500 licenses for its software in just a few accounts, some of which were in the financial services sector, although management has not discussed the company's latest customer figures.

The vendor has also been extremely quiet on the news front since the summer, making only a handful of announcements, none of which were product related.

Desktone is nonetheless said to be planning a major announcement next month that is expected to include significant enhancements to vDesktop.

Despite its low profile, Desktone should not be written off. Desktop virtualization is an extremely hot technology at the moment, as evidenced by VMware's acquisition of startup Dunes for an undisclosed fee last year and Microsoft's planned purchase of Kidaro, announced this week.Citrix has also been busy in this space, acquiring XenSource for $500 million last summer, part of a broader plan to tie server, storage, and desktop virtualization together.

Its funding by Citrix may lead Desktone to play some part in Citrix's long-term strategy, either as an acquisition or a technology partner. On the other hand, the vendor has been passed over so far in what seems to be an large-scale consolidation among desktop virtualization startups.

Rating: 2 out of 5

Next Page: Ocarina Networks

Data compression specialist Ocarina Networks is still in stealth mode, although CEO Murli Thirumale tells Byte and Switch that the vendor's first products are just around the corner."We’re getting ready to do the launch," he says, explaining that Ocarina's mysterious technology will finally be unveiled at SNW in Orlando, Fla., next month.

Unlike data de-duplication, which reduces the bulk of backed-up data by breaking files into segments and backing up only changed segments, Ocarina appears to be compressing data for a number of storage applications.

"We're not focused on backup, as in traditional backup optimization," says Thirumale. "We're really focused on online storage; things like primary, secondary, and nearline storage -- it's everything that is accessible real-time by the customer."

It is rumored that Ocarina will take a similar approach to Storewiz, which has already enjoyed some success by compressing data as it travels from the server to the storage array, although Thirumale refused to divulge any product specifics.

Some hints as to Ocarina's mysterious technology can be found on its job board. The vendor, for example, is currently recruiting for a senior software engineer, ideally with experience of NAS, SAN, replication, RAID, and clustering to help build a "storage optimization appliance."The startup is also looking to recruit a compression researcher capable of implementing "cutting edge compression algorithms for video and images," suggesting that Ocarina may wish to tap into the booming video surveillance market.

Ocarina, based in San Jose, Calif., at least seems to have the finances necessary to join battle with the likes of Storewiz. Last year, the vendor received funding from Stanford University, 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.

"We're well funded by well known VCs," says Thirumale. "It's sufficient for us, we're not in fund-raising mode at this time."

Bottom line? It seems to remain early days for the secretive startup. After nearly a year of hemming and hawing, it's clear that Ocarina is more hype (albeit the quiet, stealthy kind) than reality.

Rating: 1 out of 5Next Page: Pivot3

Startup Pivot3 made it onto the August Top 10 list by selling clustered IP storage solutions into the increasingly hot video surveillance market .

This message is clearly getting traction with users. Last summer the Spring, Texas-based firm had just eight customers for its distributed RAID system, although this figure has since leapt to 25, according to Jeff Bell, the startup's vice president of marketing.

"We have made customer progress in all of our major verticals: federal government, gaming, and public safety," he says, adding that the vendor's most recent wins include the city of Milwaukee and the Chumash Casino resort in Santa Ynez, Calif., which deployed half a Pbyte of RAIGE.

VC funding has also been flooding into Pivot3, and the vendor recently clinched $25 million in Series C funding, bringing its total financing to $46.5 million."It will be used both to grow our sales organization and to position the product to move into adjacent markets," says Bell, but he would not explain further, saying only that Pivot3 is targeting other data-intensive industries that require high bandwidth.

Still, it seems reasonable that likely prospects for Pivot3 include health care, an area experiencing massive growth in medical images, and streaming media, which is undergoing its own data explosion, thanks to the likes of YouTube .

Faced with stiff competition from iSCSI vendors like Intransa, LeftHand Networks, and EqualLogic, who see their own opportunities in areas Pivot3 is eyeing, Pivot3 has shrewdly set out to sign partner deals over the last few months, allying itself with security vendors Lenel, Genetec, and Milestone Systems, as well as a number of camera specialists.

After increasing the bandwidth of its RAIGE hardware last November, the vendor is also planning to boost the capacity of its 9-Tybte RAIGE offering sometime next month. "There will be a scalability announcement, and it will be more substantial than the November release," says Bell.

With the video surveillance market exploding, Pivot3 appears to be making solid progress, though there is clearly more work to do.Rating: 3 out of 5

Next Page: ProStor Systems

Removable media startup ProStor has been going from strength to strength since last August, thanks to its RDX technology, according to Bob Williamson, the vendor's vice president of marketing.

"Last year we ended up with about 52,000 loading docks installed -- that's around 150,000 of the RDX cartridges," he says, adding that this is more than double the vendor's installed base last August.

The vendor also introduced its largest offering, a 300-Gbyte drive, in September, and plans to launch a 500-Gbyte offering next quarter.In addition, ProStor took the wraps off its first archiving appliance, InfiniVault, in the fall, extending its reach beyond selling disk drives. "The initial target for the RDX device is really to be a low-end tape replacement," says Williamson, adding that ProStor will push this device to larger enterprises with the 500-Gbyte drives.

Much of ProStor's traction is tied to its partnerships with Tandberg and Imation, which OEM the RDX kit, although other vendors, such as Quantum, are also attempting to make their removable media the OEM of choice for major storage players.

Quantum, for example, has already picked up IBM as an OEM partner for its GoVault product.

Undeterred, ProStor has clinched around 33 resellers in the U.S., according to Williamson, and is also racking up compatibility deals with a number of storage vendors, including Kazeon and Arkivio.

The vendor, which has grown its workforce from 45 to 60 employees since August, also looks set to expand its family of storage appliances. "People should watch this space -- we have got lots of ideas about what to do with our RDX technology," says Williamson.Rating: 5 out of 5

Next Page: Qlusters

Qlusters, which sells open-source management and provisioning software for virtual and physical systems, has undergone major management changes since it was included on last year's Top 10 list.

Former Amdocs exec Dror Nemirovsky has taken over the company's reins from founder Ofer Shoshan, although Qlusters refused to discuss the CEO swap when contacted by Byte and Switch this week.

"The company is undergoing substantial change at the moment and is not in a position to disclose that yet," was the terse response from Nemirovsky when asked for an update on QLusters.Other new hires include CFO Hemed Aviczer and VP of F&D Ronny Sayag, who both joined Qlusters earlier this year as part of what is clearly a major management reshuffle.

The vendor's progress up to now remains something of a mystery, and few clues are offered on its Website. Qlusters has also been very quiet on the news front, except for a passing reference in a December press release from NetApp, which mentioned the startup as a partner in its Kilo Client grid computing project.

Whether Qlusters's restructuring was prompted by internal or external factors is also unclear. The startup certainly faces a tough challenge in the provisioning space, where its OpenQRM solution is up against HP's OpenView and IBM's Tivoli Orchestrator, although Qlusters claimed to have at least a couple of hundred customers last August.

The vendor, which is based in Tel Aviv and Palo Alto, Calif., also clinched a $10 million funding round last July, to boost its market presence at a time when more and more users are looking to manage and automate growing numbers of physical and virtual servers.

Despite growing demand for provisioning software, Qlusters's main focus, at least for now, appears to be on what is going on inside, rather than outside, the company.Rating: 1 out of 5

Next Page: 3Leaf Systems

I/O virtualization startup 3Leaf Systems first appeared on the Byte and Switch radar last May with the launch of its V-8000 device, which virtualizes control of I/O among SANs, LANs, and NAS.

Last summer, the vendor appointed former Netscaler founder and Citrix exec B.V. Jagadeesh as CEO, taking the 3Leaf reins from founder Bob Quinn, who now serves as CTO and chairman of the board.

"We have close to a dozen or so [customers] who are evaluating the product," says Jagadeesh, adding that these are "traditional enterprises" such as financial firms, as well as e-commerce companies.3Leaf has also unveiled new versions of its I/O virtualization technology, which was initially aimed at Unix environments. Support for Windows and VMware was announced earlier this year, and the CEO says that a device for virtualizing CPU and memory is the next big project on the horizon.

"We have made significant progress in terms of that product and we expect to bring it to the market in the 2009 time frame," he says.

With HP and IBM, which are both cranking up their own I/O virtualization strategies, signed up as 3Leaf partners, the future looks rosy, if expensive, for the startup.

After raising a total of $32.5 million in funding, Jagadeesh says that he needs more cash. "We're actually in the fund-raising mode right now, and we expect to close the next round by the mid-May timeframe. It will be about $30 million because we need to invest in building out sales and marketing, and further product development.

The Santa Clara, Calif.-based vendor has also grown its workforce from 55 employees to nearly 80 since last summer, although there is clearly still plenty of work to do before 3Leaf really establishes its presence.Rating: 2 out of 5

Next Page: Trigence

Trigence made it onto our August Top 10 list thanks to its efforts around application virtualization, an area which is rapidly growing as an adjunct to the storage market. By targeting specific applications at a level above the OS, the vendor claims the ability to move them quickly from one place to another without re-configuring either the application or the server.

The startup launched its flagship software, Trigence AE, back in 2004 but has recently undergone some major management changes.

Former HP exec David Roth left the company in January, and the search is now on for his replacement, according to Donn Rochette, the vendor's co-founder and CTO. "David is a great guy and we didn't want him to leave," he says. "We're in the process of looking for a CEO -- we have had a number of interviews and so forth."The former CEO's whereabouts are unknown, although Ron Warburton, chairman of the Trigence board, is currently serving as the vendor's acting CEO.

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. The software uses an API to interact with third-party tools and in-house tools to move the applications to another location.

The initial versions of AE worked with Linux and Unix servers and desktops, although Trigence added support for Windows servers earlier this year.

On the partner side, Sun resells Trigence's software package, and Novell, HP, and RedHat have joint marketing agreements with the startup. Discussions are said to be underway with a number of other companies, although no details have been released.

The vendor, which has raised $14.6 million in funding, is also looking to expand its presence into Europe, announcing a partnership with the Vienna-based Virtualization Consolidation Academy in January. This will be used as a training base for European end-users and partners, according to the Jersey City, N.J.-based vendor.The jury is still out on whether this will be enough to compete with a growing roster of competitors such as Microsoft, Citrix, and Symantec, via its acquisition of Altiris for $830 million last year.

Rating: 3 out of 5

Next Page: Varonis

Software startup Varonis, which secures unstructured data and automates safe access to it, is focusing its efforts on its core competencies, according to Raphael Reich, the vendor's senior product marketing manager.

"We're focused on unstructured data and we remain focused on unstructured data," he says, adding that the vendor has added around 100 customers to its 75-strong roster of clients since last summer. These include Atlas Air, Arnold Worldwide Services, and pharmaceutical company Regeneron."We're doing well, and we're growing nicely," adds Reich. "We plan to add employees, particularly in the area of sales."

Varonis first grabbed the attention of Byte and Switch with its DatAdvantage product, which 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.

Last month, distributed RAID systemunveiled a new version of DatAdvantage, which now includes support for both Windows and Unix environments.

"I would say that about half of our customers have Unix file servers, as well as Windows file servers," says Reich, adding that Unix has often been an Achilles heel for users. "Because of the way that UNIX sets up permissions to folders and files, it's difficult to see who has been given the right to access data."

Still, Varonis may not be the best fit for many users. In addition to using APIs on the NAS boxes, DATadvantage also deploys agent software on file servers -- something many IT pros don't like.The startup also has no immediate plans to shift its focus from just unstructured data, according to Reich. "About 80 percent of corporate data is unstructured data, so we still see that as a large, untapped market," he says.

Overall, Varonis's progress has been steady and the vendor seems well-positioned to tap into users' ongoing data protection fears.

Rating: 3 out of 5

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