Storage VAR GlassHouse Gets $7.1M In 3rd VC Funding Round

GlassHouse Technologies, a solution provider that focuses on implementing storage solutions but does not resell storage hardware or software, received $7.1 million in its C round of funding.

Kodiak Venture Partners led the investment, and was joined by returning investors including Sigma Partners, GrandBanks Capital, and Globespan Capital Partners. Total investment in GlassHouse to date including this round is about $15 million.

The Framingham, Mass.-based solution provider will use the funds to continue its market momentum, said GlassHouse Technologies president and CEO Mark Shirman.

The company, which was founded in August of 2001, is already a profitable organization with revenue growing over 70 percent quarter to quarter, and was not looking for more investment, said Shirman.

"But we took it because we have a market momentum," he said. "It came down to our wanting to invest to keep slightly ahead of the technology curve, invest in our IP, and to be as acquisitive as possible. ... We want to invest in our back-end without pulling money from the business. Anyway, the terms we got from the investors were too good to pass on."

If GlassHouse can expand its geographical presence or its business offerings, it will consider acquisitions, Shirman said. However, the company would consider acquiring a hardware or software solution provider only if that company had a top-quality services business. "If we acquired such a company, we would probably jettison the hardware business," he said. "But I'm not 100-percent sure."

Last July, GlassHouse acquired Auspex Customer Services, the worldwide services and support business of Auspex, the bankrupt NAS vendor which in years past was a leader in the enterprise NAS space.

Unlike other national storage solution providers like Minneapolis-based DataLink and Castle Rock, Colo.-based Storage Area Networks (SANZ) have a big hardware and software practice, GlassHouse does no reselling at all, said Shirman. "Because of that, we can come in as a trusted adviser to the customer," he said. "We make recommendations, and customers appreciate that, but we don't resell what we recommend. ... If we recommend a vendor, we don't get a dime from it."

Shirman said GlassHouse currently has no plans to go public, even though this is a common question from his company's Board of Directors. However, Shirman said, he is no stranger to IPOs. He was an executive of Convergent Group, a solution provider in the utilities and government market which went public in 2000, two months before being acquired by Schlumberger, a worldwide integrator now known as SchlumbergerSema.