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Cloudian Gets $25M In Venture Funding And $100M In Financing To Develop Consumption-Based Storage Hardware Business

Cloudian, which has recently moved to adopt a multi-cloud model for its scalable object-based storage, wants to extend it to include providing its hardware on a pay-for-use basis.

Cloudian, developer of a scalable enterprise object storage platform, on Wednesday unveiled it had recently closed a $25 million round of funding. The new investment includes equity and financing aimed at helping the company develop a new line of cloud storage hardware that can be offered via a subscription model.

The new funding, which comes in two separate chunks, total's about $125 million, said Jon Toor, chief marketing officer for the San Mateo, Calif.-based company.

The first part is the $25 million funding, which brings Cloudian's total venture funding raised to date up to $104 million, Toor told CRN. "It's part and parcel of life as a storage vendor," he said.

[Related: The 20 Coolest Cloud Storage Vendors Of The 2018 Cloud 100]

The second part is the financing to help the company prepare a new business model for its storage appliances, one that lets its hardware be purchased on a consumption model, he said.

Cloudian has been offering subscription pricing on its software for some time, but now wants to extend that model to the hardware side of the business as well, Toor said. "We're lining up packages to be available later this year," he said. "We want to let customers pay for storage as it's consumed."

The new consumption-based hardware model is for on-premises storage, giving customers the opportunity to pay for capacity as it is used in a cloud-like fashion, Toor said. The new financing round will give Cloudian the means to pay for the hardware its customers will use up-front, he said.

Customers can choose either Cisco hardware or Cloudian's own hardware, Toor said.

The Cisco relationship goes beyond just offering a hardware platform on which to run Cloudian. One of Cloudian's equity investors, Digital Alpha Advisors, has Cisco as one of its limited partners, giving it access to Cisco pipelines and opportunities, Toor said.

However, he said, while Cisco, along with Lenovo and Intel, are investors in Cloudian, they are not considered strategic investors.

The move to bring hardware to customers on a consumption basis will help advance the convergence of cloud and on-premises computing, Toor said.

"People think of them as different," he said. "But most people will end up in between. They want the flexibility of the cloud with the stability of on-prem. We are now adding financial flexibility for on-prem."

The funding in preparation for launching hardware on a cloud-like consumption model comes just a month or so after Cloudian unveiled its commitment to multi-cloud storage environments via the company's new HyperStore 7 object storage controller.

HyperStore 7 is a multi-cloud controller that lets customers scale their storage environments from on-premises to the cloud via a single management framework, and is available for customers using Amazon Web Services, Microsoft Azure, and Google, Toor said.

With HyperStore 7, data is stored in the cloud using that cloud's native format, Toor said. "On AWS, we use S3," he said. "On Azure, we use Blob. We store the data in the native format of that cloud. This is important, because, for instance, if you store data on Azure as an Azure Blob, you can work with the data using that cloud's compute services.

While Cloudian is not yet cash-flow positive, it is growing both its technology and headcount, Toor said. Over 75 percent of the company's sales in the last quarter came through channel partners, with the remainder going via direct sales and OEM partners, he said.

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