Analysis

posted on 21 February 2008 09:19

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A fifth round of funding for a SAN storage virtualisation vendor betokens either hope or desperation.

Incipient's iNSP (network storage platform) runs directly in Cisco storage area network (SAN) MDS9000 directors and virtualises the SAN storage arrays attached to it. It is akin to IBM's SVC in terms of fabric location and also EMC's slow-selling InVista. The other approach to SAN storage virtualisation is to run it in clever storage array controllers that can virtualise third-party arrays as well as the vendor's own. Think of HDS' USP and NetApp's V-Series.

A third approach is just to virtualise the vendor's own storage behind a clever controller; think 3PAR and Pillar. The iSCSI SAN virtualisers like LeftHand do virtualise third-party arrays as do SW-only SAN products like the DataCore ones. Incipient is a virtualiser of traditional Fibre Channel SANs. The runaway leader in that market is IBM's SVC, follwed by HDS' USP. BOth have 1,000s of installations. EMC has InVista customers counted in the low hundreds.

How many customers does Incipient have? Why has it needed a fifth round of funding, which has gained it $15.6 million and raise its overall funding to almost $95 million, a lot of money?

Its product can migrate data between arrays, tier the storage, and can run snapshots and replication services. A virtual tape library function has been hinted at.

It says it will expand global sales and marketing activities for its iNSP product which, it claims, is now being used by 'financial services organizations to automate and virtualize their data center operations'.

Ric Calvillo, CEO and co-founder of Incipient, said: “We are pleased with the continued steadfast support and confidence of this storage-savvy investor group participating in this latest round of funding.” You bet.

“Over the last year we have seen a dramatic increase in customer traction and interest in both our storage virtualization and automated data migration solutions within the financial services market segment."

Does this mean that Incipient has managed to persuade its investors that customers really do want its products and its time to build out a sales and marketing channel because Incipient needs bodies on the street to sell to customers? It's sales channel limited in other terms. I think it's likely that Incipient sells to very large acccounts that need a lot of sales hand-holding. It probably has relatively few customers buit they are pleased enough with the product to give Incipient confidence.

"We see this interest accelerating globally over the upcoming year as we uniquely address the desire by large financial services accounts to automate and virtualize data center operations to manage complexities associated with storage growth and business service requirements.”

Hmm. No mention here of VMware or co-operation and integration with it. No mention of thin provisioning either.

This writer reckons Incipient needs to broaded its platform to include Brocade's 48000 directors and DCX data centre switches. It must, absolutely must, have a rock-solid VMware integration story and had better support thin provisioning. This kind of development will need cash too.

Bill Helman, general partner, Greylock, an investor in Incipient, said: “The need to automate and virtualize data center operations is a top priority for global financial services entities and Incipient is uniquely well-positioned to capitalize on this rapidly evolving market opportunity. We look forward to working with and continuing to support Incipient as they execute on the major market opportunity they are now prepared to exploit with their enterprise-class solutions.”

Hmm again. 'Uniquely well-positioned'? I don't think so. Customers have to buy into the idea of running SAN virtualisation in Cisco MDS9000 director SAN fabrics, and then they have to choose Incipient over InVista, not impossible given EMC's lack-lustre InVista support, and then, they have to choose Incipient over IBM's SVC, with its thousands of customers. The product offer has to look better than either InVista or SVC.

The investors were convinced so they must think Incipient has something. It's likely that Incipent has to show solid progress by the end of this year or the investors could decide five rounds is enough and walk away. The VCap message is probably, in essence, strengthen the product offer, again, and get some real, tangible customer presence - or else.

You can read an ESG report on Incipient's technology here and a customer story here.