Cloud Storage: Two Days, Three Startups, $30 Million

November 11, 2010 Off By David
Grazed from GigaOM.  Author: Derrick Harris.

Cloud storage startups have received lots of investor love this week. In the past two days, three cloud storage companies raised a total of $30 million, with Gluster bringing in $8.5 million, Zetta scoring $11.5 million and and Nirvanix receiving $10 million. It’s further proof that organizations are looking for scalable (and, ideally, inexpensive) methods for storing their growing data stores, and that cloud computing is becoming an ideal model to do that.

This week’s funding announcements aren’t the beginning of any trend, merely a continuance. All told, Gluster, Zetta and Nirvanix have raised a disclosed total of $75.7 million, with Nirvanix leading the way with $45 million. Zetta’s new money makes it the latest addition to the $20 million club; the company has raised $22.5 million overall. Both Nirvanix and Zetta target enterprises with cloud-based backup and archiving offerings.

Further, the past year has brought some entirely new cloud-storage startups to market. In December 2009, Nasuni announced an $8 million initial round, and brought its cloud file system to market in February. In September, Cirtas Systems exited stealth mode with $10 million and its Bluejet Cloud Storage Controller. Nasuni targets SMBs looking to manage primary storage in the cloud, whereas Cirtas targets enterprise retention with an appliance that intelligently directs data to the cloud.

Proprietors of cloud, or scale-out, storage software — which is where the open-source Gluster plays — have had a good year, too. In March, Om highlighted a number of big scale-out storage investments. In April, NetApp continued a trend of scale-out acquisitions by purchasing Bycast. In the past few months, IBM bought Storwize and Overland Storage bought MaxiScale. Lately, talk has been of Isilon Systems marketing itself for a 3PAR-style auction (although it appears initial frontrunner EMC is out as the buyer). Scale-out file systems, in particular, are popular among individual organizations, as well as cloud providers building scalable, multi-tenant storage infrastructure.

Financially speaking, the only big loser in cloud storage appears to have been one-time VC darling ParaScale. After raising $11.4 million in 2008, ParaScale couldn’t raise additional funds, resulting in Hitachi Data Systems saving ParaScale from bankruptcy by buying the company in August. It’s tough to assess why ParaScale got shut out of additional money, but it might have something to do with the sheer amount of competition.

With all this money flying around cloud-storage platforms and software, it’s difficult to speculate who’ll get bought or who’ll get the next big injection of venture capital, but it appears certain the action isn’t slowing down.