Kazeon Gets $21M Venture Boost

New round of funding signals demand for unstructured data search solutions

August 4, 2006

4 Min Read
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Startup Kazeon has scored $21 million in Series B funding, spotlighting momentum in the unstructured data classification and search market. The round, led by Menlo Ventures, included Focus Ventures and all of Kazeon's previous investors.

The three-year-old company, whose total funding is now $44 million, will use the money to expand both partnerships and direct sales in a market that sources say is booming.

Indeed, in addition to Kazeon and a handful of startup rivals, EMC may soon offer a product in this space -- and rumor has it the Hopkinton humongoid will choose to partner rather than start from scratch. (See EMC Intros IIM.)

While an EMC spokeswoman denies any knowledge of such talk, the rumblings in this space are getting louder by the day. Fact is, regulations and legalities have users concerned about being able to tag specific items in the masses of data they're forced to save. (See Lawyers Urge Doc Management.)

Appliances like Kazeon's help by sifting email, Word files, presentations, and other unstructured corporate detritus, enabling storage managers to organize data quickly -- and most importantly, isolate specific items that lawyers and regulators may need.Partnerships have been key to progress in the space, since classifying and searching requires a system integrated with stored data. Kazeon, for instance, has built much of its success so far on an OEM deal with NetApp, which resells Kazeon's appliance and software as its Information Server 1200 with SnapSearch and Recovery, along with Kazeon's backup and migration packages. (See NetApp Taps Kazeon and Kazeon Pairs With NetApp.)

Kazeon has made its wares compatible with EMC's Centerra platform, has partnerships with HDS and Symantec, and has joined a Google integration project related to that company's ambitions in enterprise search. (See Kazeon Joins Google Program and Google One-Ups Intranet Search.)

Could an EMC alliance be on the way? It's not likely. For one thing, Kazeon's NetApp partnership is solidly entrenched. For another, Kazeon CEO Sudhakar Muddu seems bent on playing the field as widely as possible. "We will beef up our direct sales," he says.

There are also plenty of other companies with which EMC might choose to partner. Index Engines and StoredIQ also provide out-of-band appliances. Vendors Njini and Scentric offer software solutions -- Njini's for in-band use on servers, and Scentric's for out-of-band use. Other players include Abrevity and Arkivio, which bill their products as ILM building blocks. (See De-Classifying Data Classification and Native Trials With Storm.) Then there's Fast Search & Transfer (FAST), which OEMs its classification and search technology to a range of vendors, including EMC for its CenterraSeek program. (See FAST Primps for Storage OEMs.)

Table 1: Selected Unstructured Data Search Startups

Vendor

Announced Customers

Key Partnerships

Differentiators

Funding

Employees

Kazeon

Zoran Semiconductor, L3 Communications

NetApp

Out-of-band appliance; focus on speeding up complex searches

$44M; Clearstone Venture Partners, Focus Ventures, Goldman Sachs & Co., Menlo Ventures, Redpoint Ventures

65

Index Engines

N/A

AMD, EMC, NetApp

In- or out-of-band appliance

N/A

24

Njini

N/A

N/A

In-band appliance

$6.4M; Accel Partners, Add Partners

21

Scentric

N/A

Archivas, HDS

In-band server software

$10.4M; HIG Ventures, Valhalla Partners, Imlay Investments, ATDC

70

StoredIQ

Ascension Health Network, Atlantic Healthcare, Berkshire Hospitals, Blue Cross Blue Shield of Arizona, Medline

Google; SAN Holdings Inc.

Out-of-band appliance; focus on healthcare vertical; security emphasized in marketing

$6M plus undisclosed recent sum; Arch Venture Partners, S3 Ventures, Techxas Ventures, others

30

Like all of these companies, Kazeon has its take on the market. Though it focuses on unstructured data right now, Muddu says it's just a matter of time before that expands. "Our approach is to extend beyond unstructured data to support industry-leading applications, to provide customers with indexing, search, and classification of information residing in many repositories," he states.

Kazeon has a full plate for now, though. Muddu says his company has 25 paying customers and another 34 evaluating the product. What's more, he thinks there are at least three "killer applications" for classifying and searching unstructured data. These include litigation and "e-discovery," laptop data management, and tiered storage.

New funding should help Kazeon keep digging these paydirt areas. The startup will need help, with EMC entering the picture. Still, Muddu is unfazed. "This [funding] will last us for a long time... two to three years," he estimates. After that, he says, the goal is to turn profitable and make an IPO.

Mary Jander, Site Editor, Byte and Switch

  • Abrevity Inc.

  • Arkivio Inc.

  • EMC Corp. (NYSE: EMC)

  • Focus Ventures

  • Index Engines Inc.

  • Kazeon Inc.

  • Menlo Ventures

  • Network Appliance Inc. (Nasdaq: NTAP)

  • Njini Inc.

  • Scentric Inc.

  • StoredIQ Corp.

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