The deal will bring 50 NexGen employees into Fusion-io to help the company expand its products and market in the small and medium-sized business space with data storage solutions that provide the speed and reliability of all-flash solutions, while still participating in some of the cost efficiencies of tradition disk memory.

The two companies had already partnered on storage solutions.

“Many SME businesses have lean IT teams and budgets, making it critical to offer an integrated and affordable entry point for flash powered application acceleration that delivers consistent performance, even under demanding workloads,” David Flynn, Fusion-io chief executive said in a statement.  “The hybrid NexGen solution combines memory attached flash and disk on leading server platforms to provide a system tuned to deliver performance, price, and capacity.”

Fusion-io had just reported earnings earlier today, announcing $87.7 million in quarterly revenue with a net loss of $20 million, and a drop from last quarter of 27 percent and from the previous year’s quarter of seven percent.

But the company has plenty of coin on hand for the acquisition: $355 million in cash and equivalents.

With Fusion-io’s software and NexGen’s hardware, Fusion-io says that it will now provide:

• independently provisionable performance and capacity with a software-defined architecture
• dynamic real-time flash write caching, read caching, and tiering
• enterprise reliability with more than 250 times more data written over the system’s lifetime than SATA and SAS SSDs
• application performance three times faster than SSDs integrated behind legacy storage controllers
• transparent movement of data between high performance and low cost storage media as needed

As part of the deal, Fusion-io is covering all existing stock agreements and vested equity of NexGen employees.

photo credit: Leonardo Rizzi via photopin

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Storage may not be the sexiest space, but it’s catching the attention of Silicon Valley’s venture capitalists.

Mayfield Fund has led an investment in SwiftStack, which helps large companies roll out their provide cloud storage. Mayfield investor Navin Chaddha said the firm has a long history of investing in storage startups; most recently, StorSimple.

Cofounder and CEO Joe Arnold said companies see benefits of using the public cloud, but want to deploy storage on-premise in their own data center. “The reason why is they want more control over their data,” he said. SwiftStack’s software defined storage solution can run on commodity hardware, and is cheaper than building a storage system from scratch.

Arnold and a few other members of the founding team previously worked at San Francisco-based Engine Yard, and built out the first widely used platform as a service (PaaS) products, which ran on top of Amazon. “We had a front row seat to see how the cloud could be used,” Arnold explained.

The current project is based on OpenStack, and core contributors have joined the team. OpenStack is a cloud operating system that kicked off two-and-a-half years ago to enable any organization to create, and offer cloud computing services running on standard hardware.

SwiftStack is attacking incumbent players like EMC and NetApp, but Arnold admits that it’s a “very early market.”

With the funding, the company will expand its sales and marketing team, and continue to build out the product.

Today, the startup closed a $6.1 million funding round led by Mayfield with additional participation from Storm Ventures and UMC Capital, bringing its total funding to $7.6 million.

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A software-defined storage startup called Nexenta has closed a $24 million funding round, proving that storage is increasingly an area of focus for IT.

In Silicon Valley, data centers are heating up with startups like Pure Storage and Nimble Storage pulling in massive funding rounds and Michael Dell announcing a storage-focused investment fund. 

Nexenta executives say the funding will help them educate the market so that potential customers view it as a trusted storage partner rather than a disruptive startup. Since it was founded in 2005, the company has competed with legacy players like EMC and Netapp, who have been around for decades. However, Nexenta’s early success with customers led executives to make the audacious claim that it would be the “most successful storage startup ever.”

“Nexenta’s software runs on any industry standard server, whereas EMC or NetApp lock buyers into building out storage using only their branded hardware,” said Mark Lockareff, the company’s new CEO. He’s a former investor in Facebook and an adviser to nearly a dozen enterprise startups, including data analytics provider ParAccel.

“By making use of commodity hardware, Nexenta is able to offer its customers increased flexibility, openness and unmatched performance at a previously unattainable cost,” he said in an interview.

Lockareff will replace former CEO Evan Powell, who will assume a new role of chief strategy officer. In other executive moves, former NetApp exec Bridget Warwick has joined as CMO. 

The company’s rapid growth must have been appealing to investors — the round was oversubscribed. Nexenta has experienced triple-digit growth for three consecutive years and see use from over 5,000 customers, the majority of whom are cloud, software-as-a-service, and hosting companies.

Its previous round in January 2012 was also sizable. The company raised $21 million in funding.

Nexenta’s fourth round of financing is led by new investor Four Rivers Group, with participation by existing Nexenta investors Menlo Ventures, TransLink Capital, Javelin Ventures, Sierra Ventures, Razor’s Edge Ventures, and West Summit Capital. In addition to Four Rivers, Presidio Ventures and UMC Capital participated in the funding.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Infrastructure may not be the sexiest space, but Silicon Valley’s investors see ample opportunity to fund startups and chip away at dominant players like VMware and EMC.

One such startup is PernixData, a company that provides software to virtualize server-side flash memory. The first product will be launched in the next three months, and is aimed at large enterprises that use virtualization in their data center.

The company raised its first round of financing from Lightspeed Venture Partners’ Bipul Sinha last year. Sinha and I discussed VMware’s shift back to infrastructure in a recent interview. He warned that the virtualization giant now faces competition “that will come up and disrupt them,” particularly from startups like PernixData.

The company was founded by CEO Poojan Kumar (pictured, left), a one-time head of data products at VMware and the cofounder of Oracle Exadata, and CTO Satyam Vaghani, the former technology lead for VMware’s storage solution.

Kumar said in an interview that the problem they are trying to address is that storage and performance barriers limited the penetration of virtualization within data centers. PernixData can help with that — and it embeds itself in the existing environment, so customers can leverage their existing data center investments.

“We allow enterprises to overcome the biggest impediments for fulfilling their vision for virtualized data centers and we do it with zero disruption,” said Kumar. PernixData addresses this using software rather than proprietary hardware, which can cause vendor lock-in. Its solution stitches together flash memory across many servers.  

“It was time to continue where VMware left off,” Kumar explained, adding that he hopes the startup is considered to be the “VMware of server flash.”

PernixData competes with myriad existing players, including Netapp and EMC, but the founders are confident given the positive response from the first 20 customers signed on to the beta.

The San Jose-based company has raised $7 million to date from investors including Sinha, who is also on the board, Mark Leslie, the co-founder and CEO of Veritas and early board member at VMware, John Thompson, former CEO of Symantec, and Lane Bess, the former CEO of Palo Alto Networks.

Top image via Shutterstock

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Aaron Levie, the chief executive of Box, the fast growing online file sharing company that aims to go public next year, said he’s in no race to beat competitor Dropbox to an initial public offering.

“That’s a race we’d be fine to lose,” Levie told me.

Moreover, Box is preparing to release a new feature that allows its enterprise partners to “release entirely new products” directly from within Box’s application. The product, to be announced in “about ten days,” is aimed at bolstering Box’s security and enterprise strategy, Levie said in an interview with VentureBeat. He did not provide more details.

Dropbox, a competitor to Box, is talking with bankers about preparing its own IPO, and could plan it for the second half of this year, according to rumors reported yesterday by Quartz. Earlier this week, Dropbox released some enterprise features, to help it compete with Box in the enterprise. Rumors peg Dropbox’s private valuation at about $4 billion, and Box’s at about $2 billion.

Levie said Box’s own soon-to-be-announced features aren’t designed to respond to Dropbox, but said they are “going to create energy in this category.” He continued: “We are only speeding up our velocity in this area. We’re going to see a lot of stuff.”

Box also competes with companies like Microsoft, Google and Egnyte, all targeting the enterprise with online file storage and sharing products.

“You have to focus your energies”

Levie said he’s comfortable with Box’s differentiation from Dropbox, which is the company most often compared with Box. While they are listed as competitors, and their names even sound alike, they are often used simultaneously by employees at big companies, Levie said.

And there are big differences between the two. Dropbox’s strength and focus has been in ease of use, and user interface, in part because of it early traction with consumers. By contrast, Box has chosen to target the enterprise, and therefore has developed richer features in areas such as security (user authentication, for example) and integration (with other enterprise apps).

“You have to focus your energies somewhere, and you tend to put your focus on where your strength is,” Levie said.

Box knows that it needs to keep its user interface simple to keep customers happy, Levie acknowledged. But Box has more settings, because of its enterprise focus, which can pose challenges. Levie said he’s working hard here, and has doubled his design team in the last three months. He did not specify exactly how big the team is, but said it is relatively small — easily below 100 — because even the impact of a few very talented designers is significant. 

Box recently just raised another $150M, at a rumored valuation of $2 billion, as it expands into international markets this year. Levie said he isn’t too concerned yet about profitability, because the goal is to grab market share. The relatively virgin market is vast and growing quickly — and it’s important to grab now, he said. Economies of scale are significant: It’s much more efficient, Levie said, for 500 engineers to build technology for 100,000 customers than for 10,000 customers.

When asked if he can keep up last year’s growth rate at 150 percent, he said he thinks Box “will more than double this year, and we would like to do that again the year after. We’re still in a double compounding growth period.”

After Box expands this year to major international markets, it will expand into emerging markets the following year. Then Box will focus on expanding into “different kinds of verticals” the year after that, Levie said.

It’s been a heady year for the colorful Levie, who loves to wear orange shoes, and is often holding a cup of coffee, even though his high energy levels suggest he doesn’t need any.

He’s making his first appearance on the Charlie Rose show this evening.

Bare-knuckle competition

The gloves have come off recently between Dropbox and Box, as the two companies try to distinguish themselves. Box has raised slightly more money ($284M, compared to Dropbox’s $257M) and has spent considerably more time and money at marketing.

However, Dropbox has recently started speaking up too. In November, the company’s vice president Sujay Jaswa told the audience at our CloudBeat event that Dropox had a bigger clientele, even among enterprise customers, than Box.

Dropbox has customers at 95 percent of the Fortune 500, said Jaswa, and that’s higher than the 92 percent number Box has quoted in recent months. Moreoever, Jaswa said that Dropbox usage is 200 times larger than Box, citing data from Palo Alto Networks, which tracks the actual bandwidth of files being stored behind firewalls at 1,636 corporate networks (see slide).

However, Box’s Levie said such data figures don’t reflect the true distribution and value of their respective services. Dropbox has a lot of customers who share photos, videos and other personal media, and they often do so without explicit permission from their employers, Levie said.

“Dropbox’s model is very consumer focused,” Levie said. “It tends to see consumers using tools at home and at work. The volume and scale is very different.”

Box, by contrast, shows up being used behind a firewall only after it is approved by an IT manager — and data stored by its application is not as data-intensive as the rich media files shared by Dropbox users, he said.

In Box’s case, users are more collaborative, Levie said. Every member of a company’s sales team may use Box to share marketing collateral, for example. By contrast, Dropbox customers often use storage primarily to synchronize their media between all of their devices. Levie said the gap between box and Dropbox in data usage is unlikely to close over time.

Box vs. Dropbox traffic

Palo Alto Networks spokesman Mike Haro agreed that the amount of data being shared by an app doesn’t provide any real gauge of how it is actually being used.

Traffic by DropBox users is now 54 times larger than Box, Haro said, citing a new report to be released by Palo Alto Networks next week. That report is based on patterns from among the company’s 3,000 customers.

Haro said it was important to keep in mind, however, that Box doesn’t have a consumer version, and consumer services tend to drive far more traffic. He used the case of MegaUpload to explain. That company, which was ruled illegal because of copyright infringement by its customers, most of them consumers, was at least 20 times larger than that of the next biggest application that Palo Alto Networks tracked at the time, according to Haro.

Levie said the economics around enterprise are also better. Large companies are willing to pay more for a service with security and other enterprise features than consumers are. “The enterprise market is where the largest and most viable business remains,” he said.

Levie said the release by Dropbox of new enterprise features this week was expected, but nothing surprising.

“It’s baseline functionality you need in order to go in and compete in the business market,” he said. “That said, there’s quite a bit of distance from what we’ve built from what they’re building.

He said Box can handle enterprise companies that have 10,000 to 50,000 employees using Box in the cloud. “This requires a lot of features. You have to build them, manage them, and you need data and visibility of what employees are doing with that content at scale.” He added that you also have to support an ecosystem of other partners that need to tie into your application.

And this is just the beginning. “We’ve only done a blip of what we want to do,” Levie said.

This company officially emerged out of stealth mode, is within days of shipping its first batch of devices, and announced $6 million in its first round of funding. Connected Data manufactures the Transporter, a piece of hardware that is “online, but off-cloud” for privately sharing, accessing, and protecting files.

The investment was led by a diiptych of gates- Floodgate and Northgate Capital, who are paving the way for Connected Data to distribute their product nationwide.

The Transporter’s $100,000 Kickstarter campaign launched in December and successfully brought in $260,000 from 1,055 backers. Since then, Connected Data signed a deal with a large technology distributor and partnered with national retailers to bring the Transporter to market.

Using the Transporter, people can communicate and shares files with computers and other Transporters from anywhere in the world. It enables communication and global access, while also ensuring security. Traditional hardware storage is not connected to the internet which makes it challenging to share and sync data, while cloud options can be expensive and unreliable for people with large storage needs. The Transporter bridges the gap between the two.

Connected Data was founded in 2011 by “storage professionals” who were frustrated by the available options. Now, there are three versions of the Transporter available. A $199 device with no storage built in, a $299 device with 1 TB, and a $399 with 2 TB of storage.

The team is based in Santa Clara, Calif. Read the company’s blog post. 

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

In Silicon Valley, a growing number of venture capitalists are breaking away from the larger firms to form smaller, highly specialized funds.

Sunil Dhaliwal, managing partner of Amplify Partners.

The newest is Amplify Partners; its managing partner Sunil Dhaliwal is formerly of Battery Ventures, where he invested in hot enterprise companies like Splunk and Netezza (acquired by IBM). Dhaliwal has succeeded in raising a $40 million fund to invest solely in emerging IT infrastructure companies.

“Technical founders working on IT infrastructure startups have far fewer options for funding compared to digital media, consumer Internet, or even application software startups,” said Dhaliwal in an interview. He was inspired to start the firm after meeting entrepreneurs in this space who felt that angel investors and larger firms didn’t have the time to provide “senior level attention.”

Dhaliwal believes that incumbent IT infrastructure vendors are “vulnerable” in a way the industry hasn’t seen for 25 years. And with hundreds of billions of dollars to be made, “it was pretty clear that I should fill that gap,” he said.

Amplify’s startups are all led by “technical founders who would rather write code than PowerPoint.” The three key themes the firm is looking for are scale-out architectures, data growth, and real-time infrastructure. The entrepreneurs tackling these problems must be focused on efficient business models from day one.

Dhaliwal revealed that Amplify Partners will make initial investments ranging from $50,000 to $1.5 million, and retains the necessary capital to fund its entrepreneurs through several rounds. Current portfolio companies include AppNeta, Continuuity, Datadog, Fastly, Wibidata, and several startups in stealth mode. Amplify Partners has offices in Cambridge and at Sand Hill Road in Palo Alto.

If you like to get your money’s worth out of your purchases, it’s best to stay far away from the 64GB Surface Pro.

Microsoft is confirming to various news outlets today what we’ve for so long feared: In terms of free storage, the Surface Pro is a really bad deal.

Owners of the device will be left with a paltry 23GB of usable space after the installation of system files and onboard apps, which together take up over 60 percent of the device’s 64GB. 

While the situation is a bit better with the 128GB Surface Pro (which leaves users with 83GB of storage), the 64GB model’s numbers are actually worse than those of the 32 GB Surface, which only offers 16GB of useable storage.

Microsoft isn’t alone here, of course, as just about every device ships with less storage space than advertised. The problem is that the Surface Pro takes that trend to a more troubling extreme: $800 for 23GB of usable space is simply an awful deal for consumers.

To rectify the problem, Microsoft recommends that Surface Pro owners turn to things like USB storage, microSD cards, and SkyDrive. Those solutions, however, don’t address the all-too-clear reality: Microsoft is misleading customers by advertising one product and selling them something very different.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Big changes are afoot at VMware as it refocusses its efforts on what it knows best: infrastructure.

The virtualization giant recently lost its founder and CTO, and yesterday it revealed that it will cut 900 jobs and shutter certain business units in a bid to streamline its operations.

The company released an SEC filing announcing a “planned exit of certain lines of business and consolidation of facilities” by the end of 2013. This will put VMware in a position to focus on its more “compelling” products.

According to Lightspeed Venture Partners’ Bipul Sinha, these compelling products will probably not include its cloud-based applications, as the company has realized that it can’t do “the whole shebang.” He explained, “The reason for the changes are likely because they want to go back to the basics of infrastructure and not the whole stack.”

Three or four years ago, VMware intended to offer software tools and services at every layer — including applications and infrastructure — in a manner akin to Microsoft. An aggressive acquisition strategy followed: VMware picked up hot cloud startups like SlideRocket, a software-as-a-service app for building business presentations stored online.

But as we reported in December, VMware and its parent company, EMC, launched a new cloud and “big data” unit led by former chief strategy officer Paul Maritz. The new organization is semi-autonomous, and sources tell us that in future, it will most likely spin out into a separate company focused on the application layer.

With competition from scrappy startups and legacy vendors on all fronts, it is a pragmatic move for VMware to shift its product focus to the virtualized data center. And it will bolster its core offering thanks to a $1.05 billion acquisition of software-defined networking startup Nicira.

VMware expects to incur costs of $20 million to $30 million to execute these planned changes. A company spokesperson declined to comment.

Enterprise storage and security business Imation has agreed to buy smaller storage provider Nexsan for $120 million in cash and stock, it announced today.

Imation has struggled over the past six years to dominate in the enterprise storage market and has had five years in a row of net losses. (We expect 2012 will also be another year of losses.) Its acquisition of Nexsan could help reinvigorate the company, with new storage and security products targeting medium and small businesses.

“Imation’s acquisition of Nexsan is an exciting next step in our strategic transformation, which includes investing in growth platforms in data storage and security solutions, where we are targeting markets with strong growth rates,” Imation CEO Mark Lucas said in a statement. “Our strategy includes focusing on the underserved SMB market with purpose-built storage systems and appliances. This is a market that Nexsan knows well. Nexsan’s management team has grown this business from startup to more than $80 million, with strong gross margins.”

The deal is worth $105 million in cash and 3,319,324 common shares worth about $15 million. Nexsan has 200 employees and generated about $82 million in revenue in 2011, with gross margins around 40 percent.

Thousand Oaks, Calif.-based Nexsan will continue to operate under the same management, with Nexsan CEO Philip Black becoming an Imation employee.

Storage concept image via Kletr/Shutterstock

Today, almost every mid to large-size company is grappling with storing massive amounts of data cheaply.

This has led to a resurgence in interest in the once-stodgy enterprise data storage market. Exablox, a stealthy startup that just raised $22 million in a highly-oversubscribed funding round, is one of the hot startups in this space.

“Nearly every company has a multi-terabyte storage problem,” said Doug Brockett, the company’s CEO in an interview.

The Mountain View, Calif. based company has been heads down for two years developing its cloud-based solution to securely store unstructured data — texts, emails, documents and so on. The founding team is currently working with a small number of customers and partners to better understand their pain-points. The founders claim the suite of current suite of products are often tricky for IT departments to install and manage, and do not adequately protect sensitive data.

According to the founding team, the emphasis will be on user experience. “Existing storage products require intimate knowledge,” said Tad Hunt, the company’s CTO. “We’ve started from scratch and we’ve written a new school storage stack that will enable customers to manage and protect their information without having a PhD.”

The founders will not reveal further details of the technology until the public launch early next year.

Investors see major opportunities in software defined storage – in a recent interview, Lightspeed Venture Partners’ Bipul Sinha said the space had undergone a “tectonic shift” away the old guard, primarily due to virtualization. “The incumbents [companies like EMC and NetApp] are slow to respond and the startup activity is at an all-time high,” he said. Likewise, Norwest Venture Partners’ Matthew Howard said the firm has evaluated “several opportunities in this sector.” He added, “The NAS [network attached storage] market is expected to grow to more than $12 billion by 2016.”

This funding round was led by Norwest Venture Partners, DCM and US Venture Partners.

Building blocks image // Maxx-Studio, Shutterstock

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The service, which has already been tested in beta by web startups such as Flipboard, big data stalwarts such as NASA, and massive streaming media service Netflix — an Amazon competitor — is available today in limited preview. It’s designed for companies with datasets in the hundreds of gigabytes to the petabyte range, and it’s intended to reduce the price of big data warehousing and analysis by an order of magnitude.

“Enterprises are tired of paying such high prices for their data warehouses and smaller companies can’t afford to analyze the vast amount of data they collect (often throwing away 95% of their data),” Amazon’s VP of database services, Raju Gulabani said in a statement.

With RedShift, Amazon promises to reduce data storage costs below $1,000 per terabyte per year, a tenth the price of most data warehousing solutions, it says. Amazon’s talking about data warehousing companies such as Teradata, but also about its own solutions, saying that RedShift is just 10 percent of the cost of existing Amazon Web Services solutions.

On-demand pricing starts, Amazon announced, will start at $0.85 per hour for a 2-terabyte data warehouse, which will scale linearly up to a petabyte. In other words, more data doesn’t mean a better deal. Customers who choose to purchase reserved instances to guarantee access get lower pricing: $0.228 per hour, which translates to under $1,000 per terabyte per year.

But it’s not just about the cost. It’s also about speed.

“Our internal tests have shown over 10 times performance improvement when compared to standard relational data warehouses.” Gulabani added. “Having the ability to quickly analyze petabytes of data at a low cost changes the game for our customers.”

Customers can buy in at the 2TB level — a single RedShift node — and scale up to one hundred 16TB nodes, a total of 1.6 petabytes. Amazon, of course, handles all provisioning, backup, and maintenance tasks. All data is continuously backed up to Amazon S3, the company said.

Amazon worked with data analytics technology company ParAccell to build the new solution. ParAccell enables high-performance analysis of massive datasets — more than a thousand JOINs in an SQL database, for example — and features real-time mid-query integration with Hadoop and other technologies.

It looks like the data storage and management industry just changed again.

Image credit: Star Wars

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

The technology industry is entering a phase of transformation as significant as the advent of the Internet itself: It is about software defining everything.

As Marc Andreessen noted in 2011, “software is eating the world.” More and more every year, our life is becoming software: our communication with others is software, our productivity comes from software, our entertainment is software, our maps are software, our health is software, our wars are software, even our cars and planes are software.

You all know of Google’s driverless car, which might even be safer than human drivers. But I did not know about planes. Last week I had a chance to talk with the pilot of my 777 flight. He explained to me that the time is long gone when there were actual cables between the control wheel and the rudder, ailerons, and elevators. What the pilot feels in his hands is software-driven. And if on a Boeing, the pilot can still force a decision, according to my pilot, on a modern Airbus the plane’s software is the ultimate decision maker.

All this digital activity has profound implications for the information technology industry.

IT will need to scale at a much different level, to support billions of humans creating, exchanging, and tracking millions of pieces of information apiece every day. With such scale, the advent of the cloud and the “software defined datacenter” is ineluctable.

The IT industry will transform as fast as possible, which probably means over a time span of 15 years. When you think of a $3.5 trillion industry turning itself on its head, 15 years is extremely fast: It means that over $200 billion of spending will change form every year, from devices to software, from to data center design to infrastructure.

With such disruptive changes, some established players will die, and some innovative start-ups will win. One small example: Nicira, which was acquired for $1.26 billion by VMware earlier this year. Now, $1 billion is a tiny drop in the overall transformative flood, but it is a huge success for a start-up.

Look at the telecommunications industry, which went through similar transformation with the move from PSTN networks to full data in 15 years. None of the giants of yesterday have survived. AT&T is still called AT&T, but it has little to do with the AT&T of our parents’ generation.

There are still people who wonder if it will really happen, and people who continue investing in the old paradigm. HP’s write off of $8.8 billion of its Autonomy acquisition comes as no surprise to me. One of our telecommunications customers tried to deploy Autonomy in the context of its cloud offering. Eventually, they gave up. It was simply too complex, and with the wrong business model.

In the 1990s, I met many people doubting that the Internet could become a ubiquitous replacement for all networks (including wide area network data, enterprise, voice, and video distribution). Many felt it was insecure and unreliable, not suited for mission-critical applications. Yet the trend was already visible, and proved to be inescapable.

The same is happening today with those resisting the cloud and the software-defined data center.

Let’s look at the segment closest to my heart, storage. Within IT, the storage market is about $100 billion. It has traditionally been considered as part of the “hardware” category by analysts, who typically sub-categorize it into high-end, mid-range, and low-end. The market includes SAN (higher-end storage area networks) and NAS (network-attached storage, now increasingly also a consumer technology). This industry has been essentially stable for the past 20 years, with successive refinement of these paradigms.

Now the storage market is about to go through a complete disruption.

In the software-defined datacenter era, storage is going to be a software application running on generic servers. These servers will leverage different technologies and storage media to provide the right performance profile at the right cost.

Two designs will co-exist in the software-defined datacenter:

• The converged architecture model, offered by start-ups like Nebula and Scale Computing, will combine the storage, networking, and compute components into a single appliance, which can be horizontally scaled out. We expect this model to prevail for most applications, which do not require a huge amount of storage.
• For the 20 percent of the use cases, those in which storage is the determining scaling factor, compute and storage will be separate, and the storage will be provided as a multi-form, unified, and scaleable storage pool.

At Scality, we have been working on software-defined storage long before the term was trendy. Our vision is that for a large scale datacenter what is needed is a storage pool which delivers scalability, control and cost effectiveness. The old, siloed paradigm of a dedicated storage for each application is dead. What is required a storage pool which is multi-form, can connect to applications without requiring them to be re-written, can deliver the performance and capacity profile required by each application, while protecting each application from one another.

Without going into too much detail, we have built just that: a flexible, powerful architecture, which we’ve been delivering as Tier 1 storage for two years.

When we started building towards our vision, the servers required to deliver such unified, enterprise-class storage service at a cost-effective price did not even exist. But with recent announcements from HP, SGI, Penguin Computing, Super Micro, and others, we now have all the hardware we need, for now and for years to come.

As the scale grows, saving energy will become more and more critical, and we see hard drives that can be stopped and started on demand on the horizon, essentially achieving long-term storage for close to zero watts.

We are not the only ones to have this vision. Ashish Nadkarmi, who is a research director within IDC’s Storage Systems research practice, just posted an article sharing pretty much the same vision, and I continue seeing new start-ups coming out of stealth and singing the praise of enterprise class, software-defined storage.

The world is changing. Our data centers need to get ready for it.

Jérôme Lecat is the chief executive of Scality, a large-scale storage management startup. He is a serial entrepreneur and business angel with 15 years of internet start-up experience.

Disclosure: Scality is one of the sponsors of CloudBeat 2012.

Top photo credit: Leonardo Rizzi via photopin

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Sourcebits is offering a 50-50 Partner Program where participating status can pay half price for its services. Sourcebits builds custom mobile, cloud, and web applications, with a focus on “design-led engineering.” The platform significantly cuts down on the time and resources a business must expend to roll out an app. Any friends and family or angel-funded startup can join today and pay just 50% of the cost for the total design and development of their project, as well as receive guidance and support. To learn more, click here. 

CrashPlan

CrashPlan is offering its “Biggest Sale Ever” on one-year plans. CrashPlan is a data storage company that provides hardware and cloud backup solutions for personal use, small businesses, and enterprises with cross-platform needs. Clients include Google, Netflix, Groupon, LinkedIn, Cisco, Pandora. Starting at 6:00 am CST this morning, CrashPlan is free. Every two hours thereafter, the price will increase until Monday November 26 at 2:00 CST, when the purchase is discounted by 42% where it will remain until the sale ends at 11:59 pm CST that night. To learn more, click here.

Appsumo

Appsumo is running a marathon of its “all-time best 12 products.” Appsumo seeks out the “greatest, geekiest products for entrepreneurs” and features them on the site. It is basically a Groupon for software, packing software subscriptions and giving a group discount for a short time. Beginning at midnight CST, a selection of deals will be available for two hours each:

• 12 AM – 2 AM: Piktochart — Easy infographics – $49
• 2 AM – 4 AM: CanvasPop — Amazing wall art – $25
• 4 AM – 6 AM: Email Templates — Get your inbox on – $25
• 6 AM – 8 AM: Copywriting Checklist — Writing 101 – $5
• 8 AM – 10 AM: HitTail — SEO simplified – $49
• 10 AM – 12 PM: SideProject Book — For the freelancers – $5
• 12 PM – 2 PM: Backblaze — Backup everything – $25
• 2 PM – 4 PM: Treehouse — Learn programming – $99
• 4 PM – 6 PM: AppSumo Hiring Secrets — Hire away – $25
• 6 PM – 8 PM: Prey — Never lose your laptop- $39
• 8 PM – 10 PM: Sumo Business Blueprint — Start a business – $39
• 10 PM – 12 AM: Double Your Freelancing Rate — Cha-ching strategies – $10

Entrepreneurs are advised to time their shopping and pigging out accordingly. To learn more, click here. 

Udemy

It is said that the greatest gift is the gift of education, and online education portal Udemy has dozens of discounts for people looking to improve their knowledge of programming and expand their skill base. Aspiring developers, designs, and entrepreneurs can find special Black Friday offers on Ruby on Rails, Python, and HTML5 (among others), as well as on marketing and sales, data analytics and business strategy. These courses are even available as gifts. To learn more, click here.   

Adobe

Adobe is offering multiple Black Friday deals on its software from November 22 through November 28, with savings as large of 40%. Commercial customers can save 40% on the full version of Elements family products, 20% of Photoshop Lightroom 4, and 15% of Acrobat XI Pro or Standard. To learn more, click here. 

TurnKey Internet

Hosting is an important part of the holiday season, whether it be of the Thanksgiving dinner, Christmas soiree, or web variety. TurnKey Internet is offering an “Early Bird Exclusive” on its IT and Cloud-Hosting services for enterprise. Businesses can receive up to 75% off on dedicated servers, virtual private servers, cloud servers, SEO hosting, reseller hosting, or web hosting. Just like deluxe waffle makers, the offers are pony good while supply lasts and the sales end on midnight of November 26th. To learn more, click here.

DesignModo

Designers and web developers, rejoice! If Victoria’s Secret buy-one-get-one free bras and free tote bags aren’t your thing, do not despair. There is still Black Friday fun left for you. Design and development blog DesignModo is putting on a week-long sale, featuring 6 products to make websites as beautiful as possible. Techies can get up to 75% off on the personal or developer licensed version of The Bricks, Impressionist UI, Pandora UI, Futurico UI, Dark Amber UI, or Magnoia Graphics. To learn more, click here.

If you know of other tech companies running special Black Friday deals, contact Rebecca@venturebeat.com.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

SolidFire, a promising solid-state storage maker for cloud services, has finally launched into general availability and announced its first customers after a year of relatively low-profile activity.

The company came onto our radar a year ago when it raised $25 million in fresh funding on a simple promise: Its hardware and software would turbocharge a cloud’s performance. SolidFire sells powerful solid-state hard drives to cloud service providers, which in turn boost performance and reliability of those services.

“Sometimes people label us a cloud company, but we’re really selling the systems to cloud providers,” CEO Dave Wright told VentureBeat. “We’re an infrastructure company at the end of the day.”

SolidFire’s first public customers are ViaWest, Databarracks, Calligo, and CloudSigma. While SolidFire solid-state drives can speed up all kinds of cloud applications — whether they are IaaS, PaaS, or SaaS — Wright said the majority of interest has been from infrastructure-as-a-service providers.

Wright identified EMC as SolidFire’s single largest competitor. And while it might be easy to throw SolidFire into the same category sold-state drive startups like Pure Storage and Nimble Storage, it differentiates itself from those because SolidFire offers much larger amounts of storage to companies. Wright said SolidFire can scale up to a 1 petabyte solution. “Their largest systems are about the size of our smallest systems,” Wright said.

Boulder, Colo.-based SolidFire was founded in 2009 and has 75 full-time employees, more than double the amount it had a year ago. SolidFire has raised about $37 million to date from investors including New Enterprise Associates and Valhalla Partners. Wright says that the company might pursue more funding in the next year.

Road Runner image via NickLaw-Artes/DeviantArt

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Michigan-based Yottabyte claims to have a cloud-based operating system to control and manage virtually anything.

The startup is coming out of stealth mode today with a plan to build private, public, and hybrid enterprise cloud storage, creating Google- and Amazon-like clouds that runs on an existing storage area network (SAN). Its OS has been in beta for months.

Yottabyte was founded in 2010. It has raised just under $10 million in private investment and competes with Mountain View, Calif.-based Nimbula.

The product’s concept originated when the founders, Gregory M. Campbell and Paul Hodges, were sitting in a conference room tossing around ideas. “If we could put these together in a suite or a single system, we could actually deliver on the original intent of the cloud,” Campbell, the company’s CTO, explained. “The big, scaled out, successful public cloud companies like Google and Amazon built their infrastructures with inexpensive, no-name equipment and custom software built by gifted teams of Ph.D-level engineers employed to build these complicated, scalable systems.”

Most business can’t afford to employ these full research teams. Yottabyte aims to be a lower-cost software alternative that still runs on commodity hardware. It’s a nice idea, but analysts fear that it may be “overly ambitious.”

Yottabyte does not currently support public clouds such as Google Cloud Storage and Microsoft Windows Azure. It has its own data centers on each coast and a third in Bloomfield, Mich., where the company is based.

Image via Shutterstock

DNA is a fantastic medium from a storage perspective. Its storage density is one million gigabits per cubic millimeter. A gigabit is a billion bits, and one gigabit equals 125 megabytes. So a million gigabits, if I’m not such a math idiot as some have said, is 125,000 gigabytes … in one cubic millimeter.

That’s a little more storage than fits in your new MacBook Air.

The Harvard scientists followed a four-step process: encoding the book into the zeroes and ones of computer storage, and then into the language of DNA. To read the data, they then synthesized the DNA and decoded the gene sequences:

Source: Harvard

Storing data in DNA

The key, according to author George Church, is that “most non-DNA methods store on a plane what DNA stores in a volume.” That 3-D storage method is about as good as it gets: According to Sri Kosuri, one of the scientists who made it happen, the storage density compares “favorably with other experimental storage methods from biology and physics.”

In fact, it’s so good, according to a Harvard Medical School write-up, that all the data the world creates in a year could theoretically fit in four grams of DNA.

In addition, DNA is stable at room temperature, unlike other high-density storage methodologies such as quantum holography, which requires near absolute zero temperatures and massive energy expenditures. One downer: encoding is slow, and decoding is also.

And the book?

It may not exactly be bedtime reading unless you’re actually trying to sleep … “Regenesis: How Synthetic Biology Will Reinvent Nature and Ourselves” … but there are now more copies in existence, sort of, to make it far and away the biggest bestseller ever.

If only each one was paid for.

photo credit: kevin dooley via photo pin cc

Pure Storage, a flash player that aims to disrupt the business of storage arrays, has received a $40 million fourth round of funding, led by Index Ventures.

The Mountain View, Calif.-based company, founded in 2009, claims to offer an enterprise flash array that can drive down the cost of server storage. Pure Storage’s technology works by maximizing the amount of data that can be stored on solid state drives. The company uses a number of methods to reduce the amount of space on a hard disk, including deduplication and additional compression.

Pure Storage faces strong competition from XtremeIO, an Israeli flash company recently acquired by EMC.

At VMworld, an upcoming virtualization and cloud computing conference, the company will announce an update to its flagship product, FlashArray, which it claims will rival XtremeIO. The new features will tightly integrate with VMware, so it should come as no surprise that Helen Greene, cofounder and CEO of VMware, is a participating investor in the company’s Series D.

Pure Storage said it would use the funds to expand its operations to Europe and continue to scale operations in the U.S.

The latest funding round was led by Mike Volpi at Index Ventures, with participation from Greylock, Redpoint, Sutter Hill, angels from VMware and DataDomain, and others.

Backblaze is an extremely easy-to-use, cheap storage service that keeps data safe by continuously and automatically backing it up to the cloud. Founder Gleb Budman shook up Silicon Valley by sharing the secrets behind the company’s technology in 2009 and again in 2011. The company stores nearly 40,000,000 GB of data and backs up 100,000,000 files per day. It makes money by charging users a small monthly or annual fee for the service.

The revenue is apparently not enough to quickly achieve Budman’s ultimate goals and thus he set out to fundraising. He received the $5 million from British firm TMT Investments. The money will be given in two equal distributions. Read the full story (including a trip to Panama) on the Backblaze blog.

Backblaze was founded in 2007 and is based in San Mateo, Calif.

Storage servers are expensive pieces of infrastructure but are necessary for companies that manage large amounts of data. Tintri compresses information using solid state disks, rather than bulky hard drives, and makes use of flash technology so data storage is more compact and cost-effective.

“We use the same kind of technology that is in MacBook Airs, phones, and iPod Touches, which have been used extensively in the consumer space, but not in business,” said CEO Kieran Harty. “Almost all storage today is hard to build. We introduced compression and efficiency technology that reduces the number of servers they need in a data center by a factor of 10.”

Businesses spend massive amounts of money setting up data centers, networks, and servers, and Tintri’s virtualization technology not only makes storage more affordable but also easier to administer. The system can be up and running in 30 minutes, as opposed to two days. The appeal of greater affordability and simplicity is clearly appealing to the enterprise world, as Tintri has experienced rapid growth of 100%, quarter over quarter.

This also shows why Tintri is a compelling company for investors.

“Billions of dollars are spent each year on these pieces of infrastructure, and the industry has a $30 billion market cap,” said Harty. “We were interested in building a company that was not going to be a quick acquisition, but could grow to a billion dollar company or more. “

The money will be put towards expanding sales and marketing activities and scaling the product. Tintri already has over 100 companies using its technology, including Alliance Bank, gaming company Digital Chocolate, Northwestern University, and F5 Networks. The financing was led by Menlo Ventures. Existing investors NEA and Lightspeed Venture Partners also participated, bringing the company’s total capital raised to over $60 million.

The company currently has 85 employees and is based in Mountain View, Calif.

Storage hasn’t typically been an attractive space for entrepreneurs, but Michael Dell is willing to make a $60 million bet that it will fuel some of the most important strides in IT in the next decade.

“We see this as an area of continuing innovation,” Dell told attendees at Fortune’s Brainstorm Tech Conference in Aspen.

Today, Dell announced plans to launch a fund for early stage storage companies as part of its continued effort to become far more than a personal computer manufacturer. Dell‘s investing arm, Dell Ventures, will be on the lookout for companies that can manage the explosion of data driven by smartphone and tablet usage.

The fund will seed $3-$5 million in five to 10 promising startups that meet the criteria, and Dell will maintain an equity position. This fund will specifically be used to invest in storage companies, although Dell Ventures will continue to fund startups in its other key areas: cloud computing, virtualization, networking, Big Data, analytics, business intelligence, and software.

Of late, the computer maker has attempted to corner the networking and data storage market with a concerted M&A frenzy. The company has acquired over 25 young storage companies in the past four years, such as EqualLogic and Compellent.

Still, storage remains the smallest part of the business. Dell Ventures has made some of its most profitable seed investments in other areas and currently holds a stake in VMware.

Read the full transcript of Fortune’s interview with Michael Dell here.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Paul Maritz is reportedly out as the chief executive of virtualization software firm VMware. After four years at the helm of VMware, Maritz is expected to be replaced by Pat Gelsinger, chief operating officer of EMC, the enterprise storage giant and parent company of VMware.

Tech journal CRN cited multiple anonymous sources for its report on Monday. The report said it is unclear if Maritz will take another position within EMC or if he will leave the company.

Maritz is reportedly a candidate to lead Cloud Foundry, the platform-as-a-service (PaaS) division started at VMware. VMware is considering making Cloud Foundry into a wholly owned subsidiary of EMC. Maritz served from 1986 to 2000 as a top executive at Microsoft and a member of the company’s top management team. During his tenure, Maritz became famous in the antitrust investigation of Microsoft for reportedly saying that Microsoft would “cut off Netscape’s air supply” during the browser wars. He was also credited with originating the phrase “eating your own dogfood,” or convincing customers your product was real by using it yourself.

Solid-state array maker GreenBytes has raised $12 million in its second round of funding, with a goal of making SSD technology more energy-efficient while still keeping up performance, the company announced this morning.

The new round shows that the conversation around solid-state drives, which are much faster than traditional hard disk drive, isn’t letting up. Just a few weeks ago, EMC paid more than $400 million for flash-memory storage company XtremIO. GreenBytes’ stated goals are slightly different from EMC’s and XtremIO, but since they are all working on SSD arrays, there is some cross-over that will lead to competition.

Bob Petrocelli, CEO and CTO of GreenBytes, explained that he expects enterprise companies to quickly replace traditional hard drives in favor of SSD technology because they will see better data performance and other benefits.

“Primary storage optimization is accelerating the viability of flash storage in the enterprise, and we expect magnetic storage will be replaced with SSD technology faster than most analysts now predict,” Petrocelli said in a statement.

The second round of funding was led by Generation Investment Management, with participation from Battery Ventures and GreenBytes management.

“The explosion in the volume of digital data, combined with the performance demands of I/O-intensive applications such as virtualization and analytics, has escalated data storage to a mission-critical level,” said Greg Wasserman, partner at Generation Investment Management, in a statement. “Legacy storage technology and data centers with tightening power and rack space budgets simply cannot keep pace with today’s demands. With its cutting-edge utilization of innovative software optimizations and solid state technology, GreenBytes has engineered a storage platform that delivers a truly impressive mix of performance and price, while simultaneously reducing the energy intensity of data.”

Photo credit: wongwean/Shutterstock

Seagate, already one of the world’s largest hard drive makers, will buy the French maker of high-end storage equipment for consumers. Seagate will buy a 64.5 percent stake from LaCie’s founder, Philippe Spruch, for 4.05 euros per share, minus the cash and debt position of LaCie as the deal closes. Then Seagate will buy the rest of the company’s shares via a tender offer. The entire value of LaCie is expected to be about $186 million, including $65 million in cash.

The deal will close in the third calendar quarter, subject to regulatory reviews. The price is a premium of 29 percent to the company’s average closing stock price over the last 30 days.

“We see it as an opportunity to get good software talent,” said Seagate vice president of marketing Scott Horn in an interview with VentureBeat.

Cupertino, Calif.-based Seagate is also adding new geographic coverage in the consumer market and adds to its product offering. LaCie’s products include mobile cloud offerings, high-end business storage, and Porsche-branded hard drives for consumers. LaCie has several hundred employees.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Cloud security startup CloudPassage has raised $14 million in second-round funding, with an aim of helping businesses like Foursquare, StrongMail, and others secure their data in the cloud, the company announced Wednesday.

Security is one of the most important factors for companies who want to store data and operate using the cloud. Companies using Amazon for cloud computing, for example, get very basic security from Amazon but must go to other vendors if they want more advanced protections. That’s where CloudPassage comes in, offering companies things like server security configuration, host-based firewalls, intrusion detection, server account auditing, and event reporting and alerting.

“Security in the cloud has to be elastic and has to be able to scale,” Carson Sweet, co-founder and CEO of CloudPassage, told VentureBeat. “Our platform gives companies the ability to deploy much better security for their servers.”

Forrester Research predicts that the cloud security market will grow to at least $1.5 billion by 2015, suggesting that CloudPassage is an area ripe for growth. It has already attracted subscriber growth of more than 70 percent during the first two months of 2012, compared with the same period last year. The company will use the new financing to up their marketing and penetration of its HALO platform on which all of its services are built.

In terms of competition, the company faces Tripwire and Dome9, both of which offer some of the same services. Sweet also said there were other some other startups in stealth mode that are looking to offer a “complete solution” like CloudPassage.

The new round of funding was led by Tenaya Capital, with participation from previous investors Benchmark Capital and Musea Ventures. Brian Melton, Managing Director at Tenaya Capital, will join CloudPassage’s board of directors.

San Francisco-based CloudPassage has raised a total of $20.5 million to date. Other current customers include Exois, Avatar New York, and Izoox.

Photo credit: Pincasso/Shutterstock

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Enterprise cloud storage provider Box has launched a new product today called OneCloud that will enable businesses to keep files synchronized even when using third-party smartphone apps, the company announced today.

One of the biggest challenges mobile enterprise users face when it comes to file management is accessibility. When you save a file on your smartphone inside an application, it becomes a chore to access the file elsewhere or share with someone else. The OneCloud solution helps solve this by enabling third-party providers the framework for syncing with a Box account inside the app. For example, if I work on a presentation on my iPad using QuickOffice, I can now save my progress to a Box account shared with my colleagues. So no matter where a document is edited or saved, a copy is always accessible via Box.

The OneCloud solution only works on iOS for now, but it will eventually move to Android and Windows Phone as well. Box has signed 30 app partners up so far for OneCloud, including QuickOffice, PDF Expert, Nuance’s PaperPort Notes, and Adobe EchoSign. After a user enables it, all data on those apps is backed up to Box’s server. To discover more apps that work with Box, open Box on the iPhone or iPad and tap the cloud logo at the top menu.

“If [Box CEO] Aaron Levie was talking to you, he would be shouting that this is a huge deal,” Box VP of platform Chris Yeh told VentureBeat. “But I’m close to the technology and this absolutely is disruptive.”

Yeh said that this is an exciting development for the mobile cloud because no one has achieved anything like it yet. A close comparison, Yeh said, might be Apple’s iCloud solution. But iCloud is squarely focused on consumers rather than businesses and does not give users serious file management abilites.

Besides making OneCloud available for Android and iOS, Box hopes to also move the conversation ahead when it comes to mobile accessibility files besides documents.

“This could be used across other types mobile applications, not just documents,” Yeh said. “You could back up passwords using it, for example. We’re not limited by any boundaries.”

Applications for the third generation iPad are getting bigger. That means even you, users of lesser iPad models, will have to give up storage space to support the tablet’s new high-def screen.

When the next iPad is released to the hounds on March 16, it will come with a fancy new display, twice the resolution of its predecessor. The screen is 2,048 by 1,536 pixels, with 264 pixels to an inch, which makes for much crisper image details. Because of this, apps are getting a graphics boost, meaning the apps are getting significantly bigger.

Vietnamese tech blog Tinhte first found the increased sizes, saying (translated by The Verge):

“The applications developed by Apple have been upgraded to support the Retina Display. For example Keynote was previously only 115MB but its latest version is 327MB. Numbers is up from 109MB to 283MB, Pages moves from 95MB to 269MB, and iMovie from 70MB to 404MB.”

That’s a huge increase and a potential suck on data storage in even the newest 16GB iPad. Because Apple wants apps in the App Store to work universally with any of its mobile devices, the company isn’t going to make an exception for the new display. We checked the App Store to see if the Pages app had actually increased to 269MB, and indeed it has.

It wouldn’t make sense for Apple to release applications that work with older iPad models, of course. The point is to push consumers toward the newer technology. That’s the same reason older Mac computers only accept operating system updates until their technology doesn’t make the cut anymore. But even if you leap for the newest iPad, storage on even the 16GB version is going to become precious.

The tablet’s display is causing ruffles in its supply chain as well. The Wall Street Journal’s sources are saying iPad display provider Sharp has been left out of this first shipment of tablets. Sharp was reportedly unable to meet Apple’s criteria before the shipment deadline but is continuing to make the screens for the next round, according to the Journal’s sources. Apple’s other two display producers, LG Display and Samsung, seem to have come through, despite some early delays from LG.

hat tip The Verge

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Google’s long-rumored cloud storage solution, Drive, has been spotted on one user’s account. Not surprisingly, it looks about the same as Google Docs and a handful of the company’s other online services.

A reader forwarded the above screenshot to Geekwire, which also managed to dig up Google’s planned logo for the service (see right). Google refused to comment on the news, which is par for the course when it comes to rumors.

We heard last week that Google was close to launching Drive, so we’ll likely see the service popping up on more accounts soon. It’ll be interesting to see just how Google differentiates Drive from Google Docs, which allows you to upload files of all types and share them with others.

The screenshot above has an option to “Install Google Drive,” which is likely a way to integrate the service alongside your typical desktop folders.

With Google Drive, the search company will be going head-to-head with other cloud storage services like Dropbox and Microsoft SkyDrive. But given that Google is already holding plenty of important files for people via Google Docs, it wouldn’t be too difficult for consumers to trust Google with their other files.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Business owners, chief information officers, and even chief executives are looking at storage with new eyes. They see that storage is a critical component of managing data, “internet-of-things,” Big Data, cloud services, and analytics.  Smarter storage is necessary for businesses to stay ahead as data continues to explode. For example, research firm IDC estimates that online content will total 2.7 zettabytes in 2012, up 48 percent from 2011.

In fact, 57 percent of IT decision makers from a 2011 IBM survey stated their organization needs a new storage approach to manage future growth.

As we move forward in 2012 and storage becomes a key business driver, we’ll see new breakthroughs in storage research and business models coming from industries like entertainment and healthcare.

With these new storage challenges and opportunities there will be five storage trends that organizations can take immediate action to address as they emerge in 2012.

1) Storage breakthroughs will nip the “Digital Dark Age” in the bud

Since the early 1990’s, an increasing proportion of data that people create and use has been in the form of digital data. That’s brought unprecedented flexibility and fluidity to the sharing of information.

Yet, digital storage can in many ways be more perishable than paper. Disks corrode, bits “rot” and hardware becomes obsolete. This presents a real concern of a possible “Digital Dark Age” where digital storage techniques and formats created today may not be viable in the future as the technology we use today becomes antiquated.

We’ve seen this happen before. Take the floppy disk for example: It was a storage tool that was so ubiquitous people still click on images of this enduring icon to “save” their digital work. Yet most Millennials have never seen it in person.

New research shows storage mediums can be vastly denser than they are today. New form factors such as solid state disks will help us provide more stable longer-term preservation of data, and the promise of “the cloud” allows access to data anywhere, anytime.

Recently, IBM researchers combined the benefits of magnetic hard drives and solid-state memory to overcome challenges of growing memory demand and shrinking devices. Called Racetrack memory, this breakthrough could lead to a new type of data-centric computing that allows massive amounts of stored information to be accessed in less than a billionth of a second.

This storage research breaks previous theoretical limits to data storage, ensuring our digital universe will always be preserved.

2) Data curation will provide structure in midst of the data deluge

Once we have the capability to preserve our digital universe, we will need a way to make it useful. We need to take the next step past data preservation to data curation.

Data curation is the active and ongoing management of data through its life cycle. This smarter data categorization adds value to data that will help glean new opportunities, improve the sharing of information and preserve data for later re-use.

Social media is a great example of the power of curated data. Sites like FaceBook, Google+, and Pinterest compile our digital lives and give their users a platform to organize their content.

However, there’s also a lot of work involved in selecting, appraising and organizing data to make it accessible and interpretable. The key is bringing data sets together, organizing them and linking them to related documents and tools. If data can be stored in a way that provides context, organizations can find new and useful ways to use that data.

3) Storage analytics will open new business insights

With data curation allowing organizations a platform to better utilize their data, analytics will help turn that data into intelligence and, ultimately, knowledge.

With the information that historical trend analytics and infrastructure analytics provides, you can index and search in a more intelligent way than ever before. By doing analytics on stored data, in backup and archive, you can draw business insight from that data, no matter where it exists.

The application of IBM Watson technology for healthcare provides a good example. Watson collects data from many sources and is able to analyze the meaning and context. By processing vast amounts of information and using analytics, it can suggest options targeted to a patient’s circumstances, can assist decision makers, such as physicians and nurses, in identifying the most likely diagnosis and treatment options for their patients.

Through intelligent storage and data retrieval systems, we can learn more with the information we have today to improve service to customers or open new revenue streams by leveraging data in new ways.

4) Storage becomes a celebrity as new business needs push it into the spotlight

As our digital and data-driven universe expands, certain industries are able to reach new levels of innovation by having the capacity to house, organize and instantaneously access information.

For example, Hollywood is known for its big budget blockbusters, but the big storage demands required by new formats such as digital, CGI, 3D and high definition are affecting not just the bottom line, but studios’ ability to produce these types of movies. Data sets for movies have become so large that they’re at the petabyte level.

Filmmakers are beginning to trade in film reels for SSDs as just one day’s worth of filming can generate hundreds of terabytes of data. The popularity of these data-intensive formats means studios are looking for new storage technologies that can handle the demand.

The healthcare industry may even be facing an even bigger data problem than the entertainment business. Take a look at the Institute University of Leipzig, in Germany, which has a major genetic study called LIFE to examine disease in populations. LIFE is cataloging genetic profiles of several thousand patients to pinpoint gene mutations and specific proteins. This process alone generates multiple terabytes of data.

Even one 300-bed hospital may generate 30 terabytes of data per year. Those figures will only grow with higher-resolution medical imaging, and new tools or services such as making electronic healthcare records available online.

5) Data hoarders will need an intervention

In this era of Big Data, more is always better, right? Not so – especially when every byte of data costs money to store and protect.

Businesses are turning into data hoarders and spending too much time and money collecting useless or bad data, potentially leading to misguided business decisions. This practice can be changed with simple policy decisions. Companies can also implement existing capabilities in smarter storage technologies. Still, many companies are hesitant to delete any data due to the fear of needing specific data down the line for business analytics or compliance purposes.

Part of the solution starts with eliminating the copies. Nearly 75 percent of the data that exists today is a copy. By deleting and disabling redundant information, organizations are investing in data quality and availability for content that matters to the business.

Consider the effect of unneeded data, costing money by replicating throughout an organization’s information systems. This outdated data can also potentially be accessed for fraud.

Raising the quality of data is not costly—not getting it right is.

Steve Wojtowecz is Vice President of Storage Software Development for IBM. Steve has enjoyed a 20-year career with IBM in various management roles that has included all areas of software design, development, strategy, marketing, sales, support and services. He holds a Bachelor’s degree in Management Information Systems from Rensselaer Polytechnic Institute in New York.

Top photo: Shutterstock/Kovalchuk Oleksandr

Online backup has become a crowded and important market, now that both consumers and enterprises are generating a mountain of data, much of it stored in an unsecure manner on laptops, mobile devices and other gadgets. Code 42′s ambition is to expand its sales and marketing so that it becomes the storage backup of choice when you want to protect your data.

Matthew Dornquast, chief executive and founder at Minneapolis-based Code 42 Software, said in an interview that the company now has more than 100 petabytes of data backed up with its software and hardware. It has backed up more than 100 billion files and gets 250 million new unique files per day.

The services includes Crash Plan, an automatic backup system for consumers; Crash Plan Pro for small businesses; and the Crash Plan Pro hardware and software backup service for enterprises.

Code 42 has some interesting approaches to the business. It embraces a freemium model, allowing you to back up your data to friends’ sites for free and to back up your data from different locations for free. The backup to friends method helps with the viral spread of Code 42.

It’s a good time to expand because the number of devices in the home and the enterprise that need backup — from phones to video recorders — is increasing every day. Much of that data is personal, so it is increasingly important to store it in a secure way.

“There are all sorts of new devices that are generating data, and the question is how you can manage the data effectively,” Dornquast said.

In 2008, the company expanded into enterprise backup and it now has 4,000 enterprise customers. Many of those, including Google, have taken the company up on its private data cloud service, where the customer takes control of the management of the data in the cloud.

Ping Li, a partner at Accel, said in an interview, said, “Code 42 is a good example of the consumerization of IT. They span everything from the consumer, who likes the Apple-like user interface, but do so in a sophisticated way that gets them into the enterprise.” The investment is the first from Accel’s “Big Data” fund aimed at infrastructure and application companies associated with gathering huge amounts of data.

Rivals include Carbonite and Mozy in the consumer market and Iron Mountain, now owned by HP, in the enterprise. Rivals such as Box and Dropbox have more sharing and collaboration focus. Carbonite in particular is better known because it advertises all over the place.

“We come from a model of protection, while others focus on sharing,” Dornquast said. “A lot of our customers use us to build their own private clouds where they control it.”

Code 42 sells its software as a service or through perpetual licenses. For enterprises, that amounts to $5 to $10 a month for each computer and $6 a month for consumers.

The company has 86 employees and plans to double that this year. The company was founded in 2001 by Brian Bispala, Mitch Coopet and Dornquast and it never raised venture capital until this round with Accel. It has been profitable every year. In the last three years, revenue has grown 500 percent. Dornquast said his firm will use the money for a sales and marketing expansion as well as research and development.

Dornquast said the company is interested in acquisitions and made an acquisition last year of a mobile development team.