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

It's almost a year to the day since we published our first list of Top 10 Storage Startups to Watch -- a list we recently refreshed. And given the sheer energy (and volatility) of the storage market, it's not too soon, we think, to revisit our first round of choices and see how the first set of companies we chose have actually performed.

Have the firms we highlighted lived up to their promise? Are they at least on track? As we dug for answers, we were in for a few surprises. And we thought it only fair to judge ourselves on our foresight -- or lack thereof.

With the benefit of 20/20 hindsight, we've therefore ranked our picks 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.

So without further ado, we look back unflinchingly at the first set of Top 10 Startups to Watch, listed alphabetically below and followed by an update -- and a self-grade.

Enjoy! And as ever, feel free to hit the message board, write to us individually, or email us at [email protected].The List:

ASEMPRA

Asempra made it onto our first Top 10 Startup list thanks to the fact that it shrewdly targeted the lucrative Exchange market for its initial CDP offerings. (See Asempra Launches Server , What To Do With $100M?, and Energizing Exchange.)

Since last September, Asempra has fleshed out its CDP story, adding support for VMware and 64-bit applications earlier this year. (See Asempra Makes Virtual Move.) The startup has also started to deliver on its promise of extending beyond Exchange, offering support for SQL and Windows file servers.

At least one analyst feels the firm has quietly ramped up its business while maintaining its core focus. "I am very optimistic -- Asempra has a product that has very strong application awareness," says Taneja Group analyst Arun Taneja, explaining that this helps differentiate Asempra from other CDP vendors.Recent months have also seen some major personnel changes at the startup, which swapped out founder Dan Fraisl for former McData sales boss Gary Gysin back in January. (See Asempra Exchanges CEOs and Asempra Names CEO.) Other new additions include another former McData exec, Michael Hughes, and Mike Morando, the one-time vice president of sales at Incipient, who became, respectively, Asempra's VP of sales and business development. (See Asempra Names New Execs and Incipient Sticks to Business.)

Asempra's vice president of marketing, Eric Herzog, claims Asempra has around 50 customers and has also grown its workforce from 48 to 58 over the last nine months. The startup is currently also in the middle of an office move, shifting its HQ from Sunnyvale to Santa Clara, Calif. "We can't really fit, so we're moving," he says, explaining that Asempra is on the lookout for up to 15 more staff, largely in sales, support, and engineering.

The startup has also been busy extending its partner footprint, signing deals with HP and IBM. Asempra also unveiled its reseller program back in April and now boasts 13 resellers in its stable. (See Asempra Shows Reseller Success.)

As far as funding is concerned, Herzog says the firm is unlikely to add to its $29 million haul anytime soon. "We have got plenty of money to get to a minimum of Q3 next year and probably to the end of 2008."

Our self-rating on this choice: 5ATTUNE

Attune first grabbed our attention as a Windows-based alternative for users looking to perform file virtualization. (See Attune Launches Virtualization and File Virtualization's Red Hot.) After failing in its first attempt as Z-Force, Attune reemerged in May 2006 with its Maestro File Manager appliance used to manage aggregate NAS systems. Faced with stiff competition from Acopia, NeoPath, EMC, and Brocade, Attune shrewdly allied itself closely to Microsoft, becoming a Redmond OEM partner just over a year ago. (See Attune, Microsoft Partner, EMC to Buy Rainfinity, Acopia Files Away $20M, and Brocade Bags NuView.)

While this time last year, the Santa Clara, Calif.-based firm did not have any announced customers, this situation is starting to change. (See Attune Puts Software on Trial.) The firm recently clinched deals with a number of users for its flagship Maestro File Manager, including the Central Florida YMCA, healthcare firm Insulet, and financial services firm Forward Management. (See YMCA Picks Attune.) To date, Attune has nine publicly announced customers. (See Temple Schools Pick Attune and Granite Deploys Attune.)

The startup has also been picking up funding, garnering $14 million in a round led by RWI Ventures last year, which brought total funding to $34 million. (See Attune Racks Up $14M and Attune Gets $14M.)

Long-term, it remains to be seen what Attune's "exit strategy" will be, although the possibility of getting snapped up by a larger vendor remains a distinct possibility. Cisco and F5's acquisitions of NeoPath and Acopia, respectively, have left Attune as one of the few firms in this space still standing on its own. (See Cisco Nabs NeoPath, Cisco Buys NeoPath, F5 to Acquire Acopia, F5 & Acopia vs. Cisco & NeoPath, and Acopia Files Away $20M.)Our self-rating on this choice: 4

To Page 2

GEAR6

This time last year Gear6 was still in pseudo-stealth mode, playing its technology cards very close to its chest. The startup was nonetheless attracting plenty of attention as a result of its plans to address the performance gap between servers and storage. (See Gear6.)

Founded as Engineered Intelligence by former HP exec Matt Oberdorfer back in 2002, Gear6 initially developed clustering products for the high-performance computing space before changing focus in early 2006 to target the enterprise. (See Gear6 Adds Execs and Gear6 Secures $10M.)It's taking Gear6 a long time to get off the ground. Last October, the firm began adding some flesh to the bones of its product strategy, confirming that it was beta-testing a storage caching appliance. (See Gear6 Shifts Out of Neutral.) Sitting in the data path on an Ethernet link between NAS filers and storage, the CACHEfx device uses high-speed RAM to increase the rate of I/O. (See Gear6 Unveils Appliance.)

The startup finally started shipping the product just under four months ago, claiming the ability to deliver 250,000 I/O operations per second (IOPS), 2- to 16-Gbit/s throughput, and microsecond response time. (See Gear6 Shifts Into Caching and Gear6 Unveils Appliance.)

Although priced at a whopping $400,000, Gear6 has nonetheless managed to clinch a handful of high-profile deals for its appliance. Last month, for example, Sony Pictures Imageworks deployed a CACHEfx appliance to accelerate image rendering for digital film production.

Other Gear6 early adopters include seismic monitoring specialist GX Technology and technology development specialist D.E. Shaw Group. (See GX Selects Gear6.) "We have more [customers] than that, but we have not disclosed the details," says Gary Orenstein, the vendor's vice president of marketing.

Since last September, the startup has also forged partnerships with Network Appliance, Sun, and Oracle. "I think that we will see some more partner activity from us through the end of this year," notes Orenstein.There certainly appears to be a market for any product that can significantly bump up performance of NAS, although it is clearly still early days for this particular startup, and so far, the actual ramp-up hasn't matched the build-up. (See The Outer Limits of NAS.)

Our self-rating on this choice: 4

POWERFILE

With users wrestling with ever-increasing archiving demands, PowerFile is touting an alternative to tape by offering libraries filled with industry-standard DVDs and CDs. (See PowerFile Pushes DVD Archiving, Powerfile Intros Appliance, and PowerFile Intros Appliance.)

These libraries, which it calls Permanent Storage Appliances, sit behind a server running archiving software from the likes of C2C Systems. Instead of archiving to a virtual tape library (VTL), users can instead store their data on the DVD and CDs via the server.The startup has been cranking up its product strategy since making the Top 10 list, recently adding Blu-Ray disk technology from Panasonic to the A3 appliances it announced last year, claiming a major efficiency boost compared to the likes of SATA. (See Tape Alternatives Roll Out and PowerFile Adds Archiving.)

PowerFile also fired a shot across the bows of Massive Array of Idle Disk (MAID) vendors such as Copan, Nexsan, Fujitsu, and NEC with its Blu-Ray announcement, claiming that the A3 appliance consumes one fifth of the power of a similarly-sized MAID system. (See Copan Gets New MAID, Copan Validates MAID, Nexsan SATABeast Roars , Fujitsu Adds NAS to Eternus, and NEC Intros D-Series.)

The startup, which announced its reseller program last fall, appears well positioned to feed off users' current plethora of compliance and data security concerns. (See PowerFile Courts Resellers, Washington University Medical School, Compliance Controls Data Loss, and Users Open Up on Optical.)

Our self-rating on this choice: 5

SCENTRICThe ambitious data classification startup first caught our eye with its plans to tackle structured, unstructured, and semistructured data. (See De-Classifying Data Classification.) The vendor started shipping its flagship Destiny software in April 2006, touting prepackaged data classification policies for specific verticals like financial services and healthcare. (See Scentric Rolls Out Suites and Scentric Launches Tool.)

But Scentric, which cited around eight customers earlier in the summer, lost its CEO earlier this year and is yet to replace him. Jeff Hornung left the company in April after just seven months on the job. (See Scentric Appoints CEO.)

Despite initial expectations that the startup would end up a strong challenger to the likes of Kazeon, recent months have seen speculation that Scentric may now be on the block. (See Sale Speculation Surrounds Scentric and Kazeon Gets $21M Venture Boost.) Rumor had it that the vendor was up for sale, supposedly after a failed attempt to raise cash. Although Scentric's SVP of marketing, Larry Cormier, denied the firm had failed in funding, but he did confirm that Scentric had been approached by "several interested parties."

A sale could make sense. So far, Scentric hasn't shown much traction, and as an emerging market, the data classification space is in a state of flux, with larger vendors looking to combine classification functions with other capabilities, like archiving, search, and e-discovery. (See Classification & Search Converge and Classifiers Grab Search Partners.)

Our self-rating on this choice: 2To Page 3

SILVER PEAK

The WAN optimization market has seen a flurry of activity in the last few years. Silver Peak Systems claims to save WAN transmissions by storing byte patterns, so devices don't have to send the same data over a WAN link repeatedly. The vendor says this approach makes it faster and more scalable than competing solutions, particularly those that marry traditional WAN optimization techniques with wide area file services (WAFS) and caching. (See WAFS Goes Into Orbital.)

This message appears to be getting through, even though the startup is unwilling to divulge the size of its customer list, confirming only that it currently has more than 100 customers. The startup has also been raking in the cash, picking up a $17 million Series C earlier this year, bringing its total funding to $42 million. (See Silver Peak Raises $17M.)

Some think the startup should bolster its branch office strategy if it wants to compete with the likes of Riverbed, Cisco, and Expand Networks, although Craig Stouffer, Silver Peak's VP of marketing, says this is not where the firm is heading. (See Silver Peak Pockets $17M.)"We have a device that goes down to a [typical branch office] T1 link, but that's not our primary focus -- our focus is very much fat pipe, high-end enterprises," he says.

Underlining this point, Stouffer adds that Silver Peak is unlikely to emulate the likes of Expand Networks and add features such as DNS, DNHP, and print serving to its technology. "These are features that are very specific to small branch offices. We're focused on areas where customers have bigger problems, such as moving Tbytes of data from NetApp or EMC filers."

The WAN optimization space has consolidated substantially, and Silver Peak is one of just a handful of vendors left standing, although Stouffer says that M&A is not part of the firm's exit strategy. (See WAN Optimization Gone Wild, F5 to Acquire Swan Labs, F5 Acquires Acopia for $210M, Cisco to Acquire Spans Logic, Packeteer Picks Tacit, and Cisco Chomps FineGround.) "Were not building a company with the intention of having it acquired in the short term," he says. "We have to build a successful company and have the market determine what happens."

Is Silver Peak making good choices? We think that remains to be proven.

Our self-rating on this choice: 3TRUSTED DATA, a.k.a. DATA ROBOTICS

Trusted Data, which was set up by BlueArc founder (and funding maven) Geoff Barrall, was still deep in stealth mode this time last year, although the CEO was making noise about a RAID-style storage system "for regular people." (See BlueArc Wins $72M Round and Trusted Data Pockets $12M.)

Since last year's top 10 list, the startup has changed its name and morphed into an outfit called Data Robotics, which is also headed by Barrall. Based in Mountain View, Calif., Data Robotics finally stepped out of stealth four months ago, unveiling what it describes as "the world's first storage robot." (See Data Robotics Intros Drobo.)

"Drobo," as it is known, is a 6.3-inch-high desktop device that contains four 3.5-inch SATA drives and connects via a USB port to a MAC or PC. Drobo uses red and yellow lights on the box's exterior to notify users when a drive is either 85 percent or 100 percent full, and the vendor says that no software is needed to set up the device.

"Trusted Data just sounds like another storage company," says Jim Schaff, Data Robotics' director of marketing, explaining that the startup wanted to better reflect its technology through its name change. "We're fully automated," he explains, adding that his mom could easily use Drobo.The vendor has already racked up "thousands" of customers since launching Drobo, according to Schaff, thanks largely to a network of around a dozen direct market resellers.

The startup's typical customers are SMBs and individuals buckling under the strain of digital content. "I have regularly talked to photographers with 15 Tbytes all on USB drives," says Schaff.

Backed by Greylock Partners, RRE Ventures, and Sutter Hill Ventures, Data Robotics has clinched a total of $28 million in funding, although Schaff told Byte and Switch that another round is unlikely anytime soon. "We will be profitable by the time that we get through that [$28 million]," he says, adding that the startup hopes to reach profitability by 2009.

Data Robotics has yet to publicly announce any customers, although a number of storage-related startups are now targeting the desktop space. (See Insider Eyes Virtual Desktops, Pano Logic Locks Onto Desktops, Desktop Virtualization Brokers Emerge, ClearCube Announces Partners, Bank Deploys ClearCube PC Blade, and Desktop Virtualization Brokers Emerge.)

The startup's Website reveals that former SonicWall and Sun exec Mark Walden is now serving as the startup's vice president of operations. (See A&E Does Dynamic Ads and SonicWall Unveils CDP Appliance.)Our self-rating on this choice: 1

WOVEN SYSTEMS

Although still in stealth mode this time last year, mysterious 10-Gbit/s switch vendor Woven Systems first caught our eye as a potentially disruptive data center technology. (See Woven, Woven Unveils 10GigE Fabric Switch, and Woven Weaves 10-Gig.)

After nearly two years in the shadows, Woven Systems finally unveiled its core technology at this year's Interop event, taking the wraps off the EFX 1000, a low-latency 10-Gbit/s switch it touted as an alternative to InfiniBand. (See Woven Readies 10-Gig Switch and Woven Intros 10-Gig Switch.) Aimed at Web hosting companies and Internet firms such as Yahoo and YouTube, the EFX 1000 is up against stiff competition from vendors such as Cisco, Foundry, and Force 10. (See Get Users Involved, Says Yahoo Boss, The Web Data Dilemma, Force10 Round Hits $113M , Foundry Speeds Apps , and Cisco: Storage Stars in Earnings.)

Woven's claimed differentiator is an algorithm called V-Scale that speeds up packet throughput, although the firm is yet to publicly announce any beta customers or partners, with the exception of Sandia National Lab, which has been testing the EFX 1000. "We have completed five customer trials," says Derek Granath, Woven's vice president of marketing, revealing only that these involved users in the Web services, financial services, and high-performance computing spaces.The startup has nonetheless been busy fleshing out its operation, recently appointing former Force10 exec Mike Langley as its vice president of sales and swapping out its CEO. (See Force10 VP Walks to Woven and Woven Names Sales VP.) Last month, former Broadcom and 3Com exec Jeff Thermond took over the Woven Systems reins from Harry Quakenboss, who remains an "significant shareholder" in the firm.

"Harry was the one who invited me on -- he just felt that the company would be better served by having someone who had been through similar growth transitions," says Thermond, who managed the sale of semiconductor specialist Epigram to Broadcom and also worked as general manager of 3Com's enterprise router business.

The CEO said that the 40-person startup is now on a recruitment drive, particularly in sales and marketing, although he would not reveal specifically how many staff he will bring on board.

The exec also told Byte and Switch that Woven has managed to turn at least one of its customer trials into revenues but would not go into specific figures.

Despite limited customer traction, there is clearly a niche for Woven Systems among users wary of InfiniBand. Enterprises have given InfiniBand something of a mixed reception, citing cost, lack of visibility, and limited interoperability with other technologies as major issues, although some proponents are hopeful of wider adoption. (See Interop: Mixed Messages on InfiniBand.)Like Gear6, it is still early days for Woven Systems, although users' demands for a high-speed link between servers and storage should play to the vendor's strengths. (See Narad Targets Cable.)

Our self-rating on this choice: 3

To Page 4

ZETERA

Touting its Z-Series technology as a form of low-cost storage building block, controller vendor Zetera aims to contribute to everything from grid applications to home storage networks. (See Proprietary Gear Seeks Foothold, Zetera Picks Up $13.5M, and Nasdaq Warns Occam.)The Irvine, Calif., company, founded by CEO Chuck Cortright and two Western Digital Corp. engineers, bases its technique on the User Datagram Protocol (UDP) rather than the Transmission Control Protocol (TCP) used in iSCSI, with UDP obviating the need for TCP offload engines, thereby boosting performance.

Shortly after appearing on last year's Top 10 Startup list, Zetera revealed that more than 100,000 devices based on its Z-SAN technology had been sold worldwide. This figure is now north of 175,000, according to Jeff Greenberg, Zetera's vice president of international business development. (See Zetera Breaks Out New Platform.) "More and more people are becoming aware of it [because] we have more distribution outlets."

The exec would not divulge specific customer details, although he told Byte and Switch that the vendor's Z-SAN message is getting through as users start to consider the alternatives to Fibre Channel and iSCSI. (See MIT to Construct Giant IP SAN.) "We eliminate the need for costly, specialized, low-volume hardware."

Zetera also appears to be delivering on its plan to ramp up its partnerships. This time last year, Zetera had just three OEM partners; Netgear, Bell Microproducts, and StorCase Technology, although this figure has more than doubled with the addition of a European OEM and three new Asian partners. (See Huaqi, Zetera Partner, Choiceway to Sell Zetera, Zetera Adds Taiwan Partner, and Bell Intros Z-SAN Family.)

OEM Netgear also added a second Zetera product to its portfolio a couple of months ago, and the startup recently clinched a joint marketing and certification deal with replication specialist Double-Take. (See Netgear Intros SC101T and Zetera, Double-Take Partner.)Based on these announcements, and continued user uptake, Zetera looks well positioned to continue reaping the benefits of low-cost IP San.

Our self-rating on this choice: 4

XENSOURCE

Of all the startups on last year's list, XenSource has unquestionably made the biggest impact over the last 12 months, effectively pulling the worlds of server and storage virtualization together. (See XenSource, Egenera OEMs XenSource, XenSource Reveals Upgrade, and Storage Virtualization Edges On.) In July, the vendor took this effort to a new level, clinching an OEM deal with Symantec to embed its Storage Foundation software within the XenEnterprise product. (See Symantec Drifts Into Xen and XenSource Signs Symantec OEM.)

A clear shot across the bows of rival vendor EMC, the Symantec OEM deal was also seen as reducing the testing burden on IT managers by merging two core pieces of data center software. (See Up the V Stack and Storage Afterthoughts.)Last month, networking specialist Citrix threw its own hat into the virtualization ring, snapping up XenSource for a cool $500 million. (See Citrix Bags XenSource for $500M and Citrix Acquires XenSource.) Citrix has not yet revealed its roadmap for integrating the XenSource product line, although it has confirmed that the startup's offerings will be built into its own products in desktop and application virtualization. (See Citrix to Buy NetScaler for $300M, NetScaler Acquired by Citrix, and Wanted: Virtual Desktop Services.)

With more than 500 customers at the time of the Citrix deal, XenSource's message was clearly getting through to users, although the Citrix acquisition was about much more than getting hold of a customer list. Although there has been some concern that Citrix will struggle to integrate the virtualization vendor, the deal nonetheless proves the growing importance of virtualization. (See Desktops' Virtual Dance and NetApp's Virtualization Boss Speaks Up.)

Our self-rating on this choice: 5