Storage/servers/generic IT

Acopia Files Away $20M

Acopia has picked up $20 million in funding, which its CEO sees as a declaration of independence for the file virtualization startup.

With most of its competitors cozied up to large storage vendors, Acopia CEO Chris Lynch says the new funding allows his firm to remain independent and makes it a better choice for virtualizing heterogeneous devices.

Acopia's ARX switches sit inband between servers and NAS systems and provide a global namespace that makes all the NAS devices appear as a single client to users. (See Acopia Ships Its Switch and Acopia Reaches Out.) Acopia and its competitors sprang up because NAS systems from market leaders EMC and Network Appliance did not support global namespace, making it hard to manage multiple devices.

NetApp and EMC have moved to fix the problem by acquiring file virtualization startups; however, their solutions only virtualize their own hardware. NetApp paid $300 million for Spinnaker in 2003, and EMC plunked down $80 million for Rainfinity last year. (See NetApp Annexes Spinnaker and EMC to Buy Rainfinity.)

Switch vendors have also gotten into the game. Brocade acquired NuView for $60 million in March, and Cisco was the lead investor in NeoPath's $11 million funding round last month. (See Brocade Bags NuView and Cisco, NeoPath Make It Official.) Industry sources expect Cisco will OEM NeoPath's virtualization product.

That leaves Acopia and newcomer Attune Systems standing on their own. (See Attune Launches Virtualization.) Lynch admits that he once thought a partnership or acquisition was the way to go, but now he's pushing Acopia as a cure for vendor lock-in.

"My strategy has shifted in the last six months," he says. "I think customers like that we're not part of EMC or NetApp. We let customers create multivendor environments that work, and they can switch painlessly if it doesn't work out."

Despite all the movement in the segment, file virtualization is still immature. (See Users Wary of FSV and Insider: Users Cite Virtual Savings.) That leaves room for any contender that gets it right, says analyst Brad O'Neill of the Taneja Group.

"There's still room for lots of approaches," O'Neill says. "You have the distributed software approach that Brocade takes with NuView, the out-of-band controller from EMC and Rainfinity, and various flavors of inband devices -- Acopia, Attune, and NeoPath. For distributed file servers, NuView and Attune are natural fits. If you have a bunch of NFS or CIFS NAS boxes, than you look at Acopia, NeoPath, or Rainfinity."

Lynch says Acopia's revenue grew more than 40 percent sequentially last quarter, with new customers including Yahoo, Dreamworks SKG, Novartis, and Industrial Light and Magic. Acopia also lists Merrill Lynch, Bear Sterns, and Goldman Sachs as customers.

On the downside, while Acopia has won acceptance in large shops, critics say its approach of using a proprietary hardware box is too expensive and complicated for mass acceptance. Some suspect that's why Acopia has not been embraced by the large storage companies.

"That's right, we have a purpose-built switch," Lynch admits. "We didn't take a PC and throw software on it. If you could accomplish what we do with software on a Dell server, customers would be happy to buy that because it would be cheaper. Our systems support customers that run billions of files."

Acopia's largest box -- a 24-port switch -- costs more than $100,000. Acopia also has six-port and two-port versions. According to Lynch, the big box is the company's main focus.

He says the funding will be used primarily to expand his sales team. Acopia has already increased its sales force by 20 percent since the end of last year, and the company now has 120 employees.

Meritech Capital Partners led the funding round, joined by Acopia's previous investors. The D round brings Acopia's total funding to $85 million.

— Dave Raffo, News Editor, Byte and Switch

Organizations mentioned in this article:

  • Acopia Networks Inc.
  • Attune Systems Inc.
  • Bear Stearns & Co. Inc.
  • Brocade Communications Systems Inc. (Nasdaq: BRCD)
  • Charles River Ventures
  • Cisco Systems Inc. (Nasdaq: CSCO)
  • Goldman Sachs & Co.
  • EMC Corp. (NYSE: EMC)
  • Meritech Capital Partners
  • Merrill Lynch & Co. Inc.
  • NeoPath Networks
  • NetApp Inc. (Nasdaq: NTAP)
  • Taneja Group
  • Yahoo Inc. (Nasdaq: YHOO)

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