Storage Vendors Still Winning VC Funding

EqualLogic closed its Series B round of funding with an extra $15 million in the bank, said Peter Hayden, CEO and co-founder.

Nashua, N.H.-based EqualLogic develops storage arrays featuring iSCSI connectivity and Serial ATA drive technology. The PeerStorage arrays offer automated self-management storage capabilities, Hayden said.

As new arrays are added to a network, they treat each other as peers and become self-managing across all the servers with such features as automatic load balancing, performance balancing and data consumption balancing, Hayden said. "Solution providers and data administrators don't need to spend time on such management tasks," he said.

EqualLogic has its arrays in several pilot installations, including three Fortune 500 financial institutions, where they are used to replace server-attached storage devices with IP-based SANs, Hayden said. Actual product shipment is scheduled for the first half of 2003.

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The company has a small sales team to evangelize its arrays and help push sales through the channel. Hayden said the company expects 100 percent of its business to be sold or fulfilled via solution providers.

Arsenal Digital Solutions also closed a round, its fourth, for a total of $10 million, company executives said Monday.

Arsenal, Cary, N.C., is a storage management services provider that manages client storage needs in remote data centers. Unlike the failed SSP model under which a vendor would invest heavily in storage infrastructures and sell capacity to clients on a per-Gbyte, per-month basis, Arsenal provides the services that allow Internet data centers to host such storage, said Frank Brick, chairman and CEO.

As a result, the company has about one-tenth the capital investment of the typical SSP, Brick said.

Arsenal's revenue in 2002 was up some 215 percent compared with 2001, while the company's customer base increased more than 260 percent, he said. Brick expects revenue to continue to double yearly over the next five years.

The new funds will aid Arsenal in establishing its partner channels, Brick said. The company originally focused on face-to-face relationships with customers, but is expanding its presence to telcos starting this quarter, he said.

Meanwhile, executives of Silicon Image, a Sunnyvale, Calif.-based developer of high-bandwidth semiconductor and system solutions, said the company plans to acquire TransWarp Networks, a developer of switching components.

Silicon Image plans to use TransWarp's switch, CPU and memory design expertise to create components required by that company's storage architecture, "which builds upon our early success in Serial ATA and enables storage solutions with an unrivaled price/performance mix," Steve Tirado, Silicon Image president, said in a statement.

Silicon Image plans to issue 2.4 million shares of common stock and options to purchase another 700,000 shares in exchange for TransWarp. Silicon Image's share prices closed down 14 cents at $4.52 per share on Monday.