Agami Plots Upgrade

NAS startup Agami Systems has picked up a quick $11 million to help push its next release out the door.

Hercules Technology Growth Capital provided the money in debt financing to go with $38 million in VC funding Agami raised over two past rounds.

The debt financing may merely be a bridge until Agami completes a third round of funding, although VP of product marketing Paul Speciale says the firm still hasn't used up the $13 million it picked up in its B round last year. He describes the new funding "like a home equity line of credit." Agami can take the money as needed, but the funding does not change the company's valuation, and Hercules does not receive an equity stake in the company.

"It takes lot of time and energy for a company to do an equity round," Speciale says. "It can tie you up for two months. This was an expedited process. It's a couple of weeks of work versus a couple of months work. And this leaves our options open for Series C funding later this year."

Speciale says Agami plans to add about 20 employees to its current headcount of around 100 by the end of the year. Agami is planning a new release of its NAS servers in early 2007 that adds universal namespace and lets customers pool storage across boxes, which alleviates their current lack of scalability. Agami's biggest current system, the AIS6000, holds 24 TBytes, but you can't cluster Agami appliances. (See Agami Systems.)Agami execs say they concentrated on performance rather than scalability with early releases. (See Agami Publishes Results.)

"Virtualization's on our roadmap for '07," Speciale says. "Our early products were based on the core intellectual property acquired [from Zambeel] when we started. And our plan was to grow into higher end functions. By the time customers are ready to scale up, we'll be ready." (See From Zambeelians to Chameleons.)

At least one user is looking forward to the new gear. Ron Leedy, director of managed services at Ketera Technologies, a supply chain and business intelligence services provider, is ready to add another two Agami systems to the two he already has. He replaced gear from Rackable Systems in 2005 and passed on NetApp because, he says, he thought Agami offered more functionality at a lower price.

Has Leedy been influenced in his choice by the fact that Katera shares a venture capital backer, Kleiner Perkins Caufield & Byers, with Agami? "No, other than the fact that it made Agami visible to me as an option," he says.

Analyst Greg Schulz of StorageIO Group agrees Agami's early focus was on performance, but he says it needs to catch up in scalability. While Network Appliance and EMC have dominated the NAS space, others who have made inroads such as BlueArc, Isilon, and OnStor have done so with products that scale well."It's a crowded space," Schulz says of the NAS market. "Agami's playing a game around speed, but they need the ability to scale to put them in the category with other NAS players."

Speciale says he doesn't think the lack of scalability has hurt so far. Agami has lined up more than 30 customers with more than 60 systems in production in 10 months of shipping products, he claims. He points to NetApp, which just rolled out its own clustered Data Ontap GX operating system in June after months of industry speculation. (See NetApp's GX Targets HPC.)

"NetApp became a $2 billion market cap company without clustering, so we thought we could get into the market and then build up to a scalable architecture," he says.

Other items on Agami's roadmap include iSCSI connectivity and eventual support for InfiniBand and 10-Gbit/s Ethernet.

Dave Raffo, News Editor, and Mary Jander, Site Editor, Byte and Switch