Deals

Scale Computing raises $17M to sell storage one terabyte at a time

Scale Computing, a provider of small-scale computer storage databases, announced today that it has raised $17 million in its third round of funding to triple its staff over the next three years.

Scale Computing sells servers loaded with the company’s custom storage software for small businesses that don’t necessarily need the petabytes of storage that massive companies need. The company offers 3TB nodes for $12,000, 6TB nodes that cost $15,000, and 12TB nodes that cost $21,000. The technology is designed to be plug and play, allowing businesses to plug in additional storage nodes without having to bring down their services or migrate data.

The Indianapolis, Ind.-based company’s funding comes at a particularly strange time, since cloud-based storage solutions are beginning to dominate the small- to mid-sized business space. Cloud computing products are typically much cheaper than building and maintaining databases in-house. They also charge per gigabyte of storage, so companies don’t end up paying for any wasted space.

There are some concerns with storing information on the public cloud — particularly in regards to security. Most major companies have strict security standards that can’t be fulfilled with public cloud storage services. That’s not to say cloud storage providers like Rackspace aren’t able to keep the data secure. It just means that the companies’ compliance requirements are often too high to effectively use the service.

There are also some performance concerns, because the information still has to be streamed through the internet from cloud storage servers onto a local device. That can lead to some lag, and the lost time can pile up after a while. Devices plugged into a local network are always going to be faster than having to stream information through a broadband connection. But as cloud computing becomes more advanced in the form of compression techniques and faster broadband infrastructure, those concerns are quickly disappearing.

Scale Computing’s most recent round of fundraising was led by Scale Venture Partners and Northgate Capital. Existing investors, which include Benchmark Capital, also participated in this round. Rob Theis, managing director of Scale Venture Partners, will join the company’s board of directors as part of the deal.

Scale Computing has secured more than 200 companies as customers and shipped 1,000 of its storage nodes. Scale Computing has raised a total of $31 million including the most recent round of fundraising.

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