PernixData gets $35M to change the server storage space

PernixData uses software, instead of hardware, to increase server storage capacity

We see it all the time: Facebook or Google or some other huge tech company buys a huge new complex of servers to store all their data. Not only does it seem like a waste of space, but its also gotta be really expensive to keep building, and maintaining, those facilities. PernixData a server-side storage intelligence company, says that it has found the solution: a software solution, rather than throwing more hardware when storage reaches capacity.

It's a pretty revolutionary way to look at the problem, and the company has certainly peaked the interest of venture capitalists, having now raised a $35 Series C round of funding, it was announced on Tuesday. 

The funding was led by Menlo Ventures, along with new individual investments from Marc Benioff, chairman and CEO of salesforce.com; Jim Davidson, co-founder, Managing Partner and Managing Director at Silver Lake; and Steve Luczo, chairman and CEO of Seagate Technology.  Previous investors Kleiner Perkins Caulfield and Byers, Lightspeed Ventures, Lane Bess, Mark Leslie and John Thompson also participated. 

The company has previously raised $27 million including a $20 million Series B round in May of last year. This latest round brings the company's total capital raised to $62 million. 

led by Kleiner Perkins Caufield & Byers (KPCB) with additional support from existing investors Lightspeed Venture Partners and industry leaders Mark Leslie, John Thompson and Lane Bess.

The San Jose-based PernixData is trying to solve the problem of what to do with limited storage space, Jeff Aaron, Vice President of marketing at PernixData, told me in an interview.

While the traditional method of creating more space was to build more hardware, PernixData's flagship product, PernixData FVP software, decouples the hardware and the software. It virtualizes server flash and RAM to enable scale-out storage performance that is independent of capacity.

"There are several ways to use flash, including putting it right into the server, which vendors like Intel and Toshiba do. We believe that the way to get fastest app performance is to put some kind of storage in the back end to back it up," Aaron said. 

Most importantly, by using PernixData, no changes have to be made to VMs, servers or primary storage, allowing companies to save money.

PernixData allows apps to run, on average, ten times faster, as "keeping storage info in the same server as application means there's no distance to get that information," Aaron said. It also allows for better scaling, and, most importantly, lower storage costs.

"Customers can delay an upgrade, and they wont have to buy as much hardware, only the capacity they need."

With this new money, PernixData will be expanding internationally. It currently operating in North America, the United Kingdom, the Nordics and Australia, the company will add new markets in Germany, Asia and Latin America.

It will also be expanding its existing teams, hiring more sales, marketing and engineers. The company has seen 160% growth in its headcount in the last year, to 200 employees, and Aaron says that number will likely double by the end of this year. 

Finally, the funding  will go toward the company's channel program, allowing it to invest in new resellers, and  nuture its existing clients.

Founded in 2012, PernixData closed its first full fiscal year at the end of July, in which it saw 42% quarter- over-quarter revenue growth. It currently has 200 customers, which range from small businesses, to household names like Sega and Costco. 

"We can sell it literally to any environment with shared storage," Aaron said. "They don’t have to change apps or servers, and we price it different for small to large companies, so any size company can be a customer."

In addition to the funding new, it was also announced that Mark Siegel, Managing Director at Menlo Ventures, has joined the PernixData board in an advisory role.

"We definiutely see a future where our competitors will be embracing new decoupled architecture, where capacity stays where it is," Aaron told me. "It a distruptive model, and a funamental shift, since you used to buy one piece of hardware for evetrything."

"It's very easy to install software, so this is literally the most distruptive change, in a non-distruptive way, possible."