Coraid Gets $10 Million Funding To Embrace Storage Channels4:32 PM EST Mon. Jan. 25, 2010
Ethernet-based storage vendor Coraid on Monday said it closed its first-ever round of funding and beefed up its executive team in moves aimed in part at jump-starting its indirect sales channel to prepare for future growth.
The company said it has closed a $10 million Series-A financing round with Allegis Capital and Azure Capital Partners.
Coraid also formally introduced a new management team, including CEO Kevin Brown, as well as Josh Leslie, vice president of channels and business development. Leslie is the son of Mark Leslie, who is a member of Coraid's Board of Directors and the founding Chairman and CEO of Veritas Software, which was later acquired by Symantec.
Coraid, Redwood City, Calif., develops software and appliances based on the open source ATA over Ethernet (AoE). AoE allows data on commodity SATA drives to be directly accessed over Ethernet networks without the overhead that the TCP/IP protocol used with iSCSI in order to build local and cloud-based storage infrastructures.
The company was founded in 2000, with a focus on the Linux market. It started introducing products based on AoE in 2005, Brown said.
It was the success of VMware in the server virtualization market which made Coraid realize that it needed funding nearly a decade after it opened its doors.
"The company grew up in the Linux environment," Brown said. "We had a boot-strap model. And that was fine with our boutique business. But then the market went to VMware in 2008 and 2009. Suddenly, everybody's hair is on fire, and we were being pulled right and left."
Coraid currently has over 1,100 customers, some of which have already implemented over one petabyte of AoE-based storage using the company's products, which depend on off-the-shelf technology such as Supermicro servers, Brown said.
Between 20 percent and 40 percent of its business goes through indirect sales channels despite the fact that the company has never put in place a formal channel program, Josh Leslie said.
"The mix has been happenstance so far," Leslie said. "We haven't really gone out and recruited partners. But we're doing a pretty significant overhaul, and designing a 100 percent channel business."
This is a big move for Coraid, Brown said. "The market is really pulling us on this," he said. "We're getting $10,00 to $50,000 deals which are perfect for partners."
Coraid is investing in future growth at a time when storage customers are feeling the strain of too many storage devices and a fast-growing number of virtual servers, Brown said.
"A customer may have 50 'pizza box' servers, each running 30 virtual machines," he said. "That's 1,500 servers. That puts a lot of strain on storage."
Coraid simplifies and increases the performance of such environments by letting customers and partners build low-cost, high-performance, and scalable SANs using Ethernet, Brown said.
It uses Gbit Ethernet and 10Gb Ethernet as its backbone, but cuts out the TCP/IP protocol used with iSCSI storage in order to move raw data to and from SATA disks, Brown said. This works because 90 percent of storage never travels more than 10 feet.
"We use port flooding," he said. "Dropped packets are handled in our firmware, not on the NICs (network interface cards). So we get rid of two-thirds to three-fourths of the headaches related to multi-pathing, change management, high availability, and more. Our founders says, it's like pouring ball bearings down a pipe."
Coraid sells storage in 8-TB blocks for about $4,000. Those "building blocks" can be connected together to increase capacity and bandwidth. The company also sells 48-TB appliances as a customer's storage capacity requirements grow, Brown said.
The company's products are suitable for customers looking to build their own storage infrastructures, as well as those who want to build a high-speed, scalable storage cloud for external customers, Brown said.
He noted that Amazon charges 15 cents per GB of storage capacity per month to customers of its storage cloud, going down to 5 cents as customers scale their capacity.
"That's where the bar is," he said. "You can't do that with enterprise-class storage. That's what you have to compete with. We can take the customer down to 10 to 15 cents per GB per month, and still leave partners plenty of margin."