Storage Vendor Pivot3 Bags $25 Million Funding Round

Pivot3 this week showed that investor interest in the storage and virtualization market continues to grow with the news that it raised $25 million in a new round of venture funding.

The $25 million round of funding, led by Focus Ventures, which also was an early investor in storage vendors EqualLogic and Isilon, gives Pivot3 the ability to expand its market and channel reach, said Lee Caswell, founder and chief marketing officer for the Palo Alto, Calif.-based company.

Pivot3 was founded in 2003, and in 2007 launched its first products based on its Serverless Computing platform which provides for the ability to run applications on virtual servers that are embedded in the company's iSCSI storage appliance.

The company has focused on the video surveillance market, where building and facilities customers need to do video streaming and require high availability, scalability, and low cost, Caswell said.

"We provide high availability at the price of Dell servers with virtualized servers embedded inside our platform," he said. "'We're one of the only companies to bring storage and virtualized servers into a single appliance."

The new funding will allow Pivot3 to expand its market to address customers beyond the surveillance industry, Caswell said.

The company is in the process of making its storage appliances more suitable to a wider range of customers. For instance, it is adding what it calls "RAID 6X" protection which allows up to five hard drives to fail without disrupting a customer's operations.

The company is also adding Intel's Nehalem processors to the appliances in order to run up to four virtual servers per appliance, up from the current limit of one virtual server. And it is introducing Flash memory-based cache in order to increase storage performance, he said.

The new version of the appliance is expected to be available in late March, Caswell said.

The company is also using some of the funds to expand its channel relationships.

"The new funding allows us to bring out new demo units which resellers can use this Summer to prime the pump for new channel moves in the Fall," he said. "We currently have 50 resellers in the U.S. now, and are adding another 50 this Fall."

The new Pivot3 funding is only the latest in a series of investments in the storage and virtualization industries so far this year.

Pano Logic, a Menlo Park, Calif.-based developer of desktop virtualization devices, late last month said that it closed a Series C round of funding to the tune of $20 million.

HyTrust, a Mountain View, Calif.-based developer of software that provides policy management and access control for virtualized infrastructures, reported closing a $10 million Series B round of funding which included the participation of strategic partner Cisco Systems.

Ethernet-based storage vendor Coraid in January closed its first-ever round of funding to the tune of $10 million to jump-start its indirect sales channel for its software and appliances based on the open source ATA over Ethernet (AoE) protocol.

Meanwhile, GlassHouse Technologies, a Framingham, Mass.-based IT services provider with a strong storage focus, in January filed for a $75 million IPOabout one year after it withdrew a previous IPO plan.

Nexsan Technologies, a Woodland Hills, Calif.-based developer of low-cost, high capacity storage, late last month also filed for an IPO, the first by a storage vendor since 2007.

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