Wednesday, August 22, 2012

Nutanix raises $33M for a new type of scale out storage

Nutanix raises $33M for a new type of scale out storage:
Nutanix, a startup building an appliance to virtualize storage networks, has closed a $33 million Series C round of funding, which brings its total cash raised to $71.6 million. The latest round, which brought in new investors Battery Ventures and Goldman Sachs, also included existing backers Lightspeed Venture Partners, Blumberg Capital and Khosla Ventures.
That’s a lot of money for a storage startup, especially one that’s pursuing the appliance model in an era of build-it-yourself- commodity hardware, but investors are so confident the round was “massively oversubscribed,” and the valuation led the U.S. Securities and Exchange Commission to hold up the financing while it investigated the round, confirmed Nutanix President and CEO Dheeraj Pandey.
So what has investors so excited? Nutanix’s appliance allows companies to do two things that are important to companies on the leading edge of the scale out and virtualization shift: it allows companies to eliminate separate storage networks by virtualizing them and allows companies to move their storage closer to their compute power, which speeds up a company’s applications or response times. As my colleague Derrick Harris wrote in April of 2011 when Nutanix launched:
The key to Nutanix is virtualization, which provides the abstraction and the additional storage connections necessary to give Nutanix the performance edge it claims. The company is big on solid-state drives for performance and consolidation, but Pandey says legacy storage systems are limited to the amount of SSDs they can handle. With a virtualized computing layer, however, each virtual server and each physical node provide the requisite housing and connection to an additional SSD. The Nutanix appliance combines both SSDs and hard disk drives to achieve maximum levels of performance and affordability, Pandey said.
Nutanix has proved that customers want its appliances, noting that it has shipped 150 systems, including 600 servers attached with more than 3.3 PBs of spindle and Fusion-io storage. The additional money gives it the wherewithal to continue selling its product to more and more companies, likely with the aim for going public in the not-too-distant future.
“This round takes us to $50 million-plus in the bank, and that means we can build a company of lasting value,” said Pandey. “That’s why Goldman is involved.” Of course, when I asked Pandey about the timing of the IPO he declined to speculate.

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