Hyper-Converged Infrastructure Developer Gridstore Closes $19M Funding Round

All-flash hyper-converged infrastructure technology developer Gridstore on Wednesday said it closed a new funding round and beefed up its management team.

The new funding round brings Gridstore an additional $19 million in capital to help it drive its market and product growth and bring in new engineering talent, said George Symons, CEO for the Mountain View, Calif.-based company. That brings the total funding for the company to $45.5 million.

For now, Gridstore is more focused on growing the company, and less on quickly becoming cash-flow positive, Symons told CRN.

[Related: Elastifile Raises $35M In B Round For Flash-Optimized File, Block, Object Storage]

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Gridstore, which started as a developer of scale-out grid storage software, now focuses exclusively on the hyper-converged infrastructure market, Symons said. Its primary solution is an appliance that combines the company's software stack, which integrates storage, compute and networking capabilities with a commodity 2U server and all-flash storage, he said.

"We sell it as an appliance," he said. "We're a software company, but we deliver the solution as an appliance. We believe our channel partners and our customers don't want to do the integration."

Symons said Gridstore in 2015 saw its revenue grow 340 percent over 2014's, thanks to the introduction of its hyper-converged appliance in the fourth quarter of 2014. He declined to provide specific revenue numbers, but said revenue for 2015 was in the $5 million to $10 million range.

Symons acknowledged that Gridstore is in a very competitive hyper-converged infrastructure market, but said his company is unique in its Microsoft-centric approach.

"We focus on the Microsoft Hyper-V space," he said. "Only one other player is in this space: Nutanix. Others will come in. But we were early. We went where others didn't go."

Gridstore is also unique in that it uses RAID striping instead of mirroring for data protection, resulting in half the storage requirements of competitors, Symons said. The company also runs its software stack on bare metal instead of in a virtual machine for faster performance and lower latency than its competitors, he said.

That focus on the Microsoft Hyper-V technology is what turned one of Gridstore's channel partners into a fan.

Dave Kawula, founder and managing principal consultant at TriCon Elite Consulting, a Calgary, Alberta-based consulting firm that focuses primarily on the Microsoft virtualization stack, works with only a handful of vendors like Gridstore that have a Hyper-V focus.

Kawula told CRN that his company learned about Gridstore from its Microsoft partners, and signed with the company after it introduced its hyper-converged infrastructure solution.

"We worked a bit with Nutanix and others," he said. "But we stuck with Gridstore because it has such a focus on the Microsoft stack. We don't want to work with partners where Microsoft is an afterthought checkbox."

That Microsoft Hyper-V focus was tough for Gridstore initially, Kawula said. "VMware has had the majority of the virtualization technology business, but now Microsoft Hyper-V is growing fast," he said. "Microsoft is investing billions of dollars on its Azure cloud. And guess what? Azure runs with Hyper-V at the core."

Kawula said Gridstore could see an impact from other hyper-converged infrastructure vendors as they move to focus on Microsoft environments, but that it will take time. "Gridstore's focus on Microsoft was a detriment three or four years ago when VMware was 80 [percent] to 90 percent of the market," he said. "Now VMware is not 80 [percent] to 90 percent of the market."

Gridstore is primarily a channel-focused vendor, Symons said.

"We're almost 100 percent channel," he said. "Like a lot of companies, we started direct to see where the market is. Now our [Europe, Middle East, Africa] business is 100 percent channel, and our U.S. market is moving that way quickly."

Gridstore on Wednesday also unveiled a number of additions to its executive team.

James Thomason, Gridstore's new chief strategy officer, joined the company from Dell, where he served as chief technology officer for the Dell Cloud Marketplace. Phillip Lavery, Gridstore's new vice president of sales for the Americas, was most recently the Bay Area practice director for Bridge Partners Consulting.

Kevin Rains, Gridstore's new CFO, just joined the company after serving as CFO for a number of small and midsized organizations.