12 Hot Data Center Startups To Watch

Once upon a time a corporate data center included software and hardware from a handful of big-name companies and no one else.

But there’s a major revolution going on. Companies are shipping more and more apps into the cloud and they are revamping their own data centres to be faster, more efficient, using new forms of databases, building what is known as “private data centres.”

The result is a wide-open door for startups offering fresh technology.

With that in mind, we sifted through the buzz to come up with this list of hot companies. They offer interesting technology, or they have attracted big funding, or they have amazing founders … or they have all of the above.

Rex Computing: Low-power servers built by a child prodigy

Thomas Sohmers, CEO, REX Computing

Company: Rex Computing

Funding raised: Unknown, but Rex Computing's cofounder, Thomas Sohmers, is a member of Peter Thiel's startup accelerator, the 20 Under 20 Thiel Fellowship. The accelerator grants $US100,000 to kids to skip college and focus on their work.

Why it's hot: At the age of 17, Sohmers dropped out of high school to start this company with cofounder Kurt Keville. The two of them built a very powerful computer server using low-power ARM chips, the kind that run tablets and smartphones. ARM servers are a huge future trend for the data center.

Rex's servers were also designed for Facebook's game-changing hardware project known as the Open Compute Project. OCP is a project where big companies like Facebook and Microsoft have shared their hardware designs and opened the door for startups like Rex to sell to them.

CloudGenix: Stealthy Cisco networking startup

CloudGenix CEO Kumar Ramachandran

Company: CloudGenix

Funding raised: $US9 million from Charles River Ventures and Mayfield Fund.

Why it's hot: CloudGenix, founded in 2013, is still in super stealth mode. But we know that it's working on a new form of networking that will make it faster to share data between data centres and offices.

CEO founder Kumar Ramachandran is a 13-year Cisco veteran who previously worked with Cisco's wide-area networking products. Instead of competing with Cisco, his startups tech can be bolted on top of Cisco products, giving him a huge market of companies that want to keep their Cisco networking equipment while making it better.

Splice Machine: A new kind of Hadoop database

Splice Machine CEO Monte Zweben

Company: Splice Machine

Funding raised: $US19 million from Mohr Davidow Ventures, InterWest Partners.

Why it's hot: The 2-year-old Splice is trying to do what those in the know said couldn't be done: turn the popular big data storage technology, Hadoop, into a kind of database that competes directly with Oracle (in geek speak, a SQL RDBMS on Hadoop).

Hadoop was always billed as a new kind of big data technology that collected the kind of stuff that wouldn't be put in a traditional database (photos, tweets, documents). It was never intended to replace the traditional database that stores precise rows and columns of data.

But this month Splice releases software to turn Hadoop into a regular database, with 15 beta customers already trying it out, it said.

CEO cofounder Monte Zweben has a long history in the tech industry. He started at NASA working with artificial intelligence and the Space Shuttle. He also founded two pre-Internet bubble companies, Red Pepper Software and Blue Martini.

Igneous Systems: Secretive cloud storage startup

Igneous Systems CEO Kiran Bhageshpur

Name: Igneous Systems

Funding raised: $US26.6 million, led by New Enterprise Associates (NEA) with participation from Madrona Venture Group, Redpoint Ventures and Isilon Systems cofounder, Sujal Patel.

Why it's hot: They are stealth and say they won't talk much about their product until 2015 except to say that it has something to do with data center storage and the cloud. But they have already landed a healthy $US23.6 million round for the product and people are watching them.

The founders come from Isilon Systems, bought by EMC in 2010 for about $US2.25 billion, and NetApp.

PernixData: Making older storage systems faster, better

PernixData co-founder Satyam Vaghani

Company: PernixData

Funding raised: $US27 million, from investors like Kleiner Perkins Caufield & Byers, Lightspeed Venture Partners and angels like Mark Leslie, founder of Veritas Software, (bought by Symantec in 2004 for about $US13.5 billion).

Why it's hot: PernixData is also working on making enterprise storage faster and cheaper. But it's doing something different. With its software, and the purchase of ordinary flash storage, it makes the storage a company already owns faster and able to store more.

It was founded by two Valley data center A-listers, VMware's former top storage exec, Satyam Vaghani and Poojan Kumar, the engineer that created Oracle's super important product, Exadata.

Maxta: Turning ordinary servers into fast cloud storage

Maxta CEO Yoram Novick

Company: Maxta

Funding raised: $US35 million total, including a $US25 million closed this month, from Tenaya Capital, Intel Capital and Andreessen Horowitz.

Why it's hot: Maxta takes ordinary servers and turns them into sophisticated storage, eliminating the need to buy expensive storage from companies like EMC and NetApp.

There's a lot of startups doing the same, each in its own way. We like Maxta because of the track record of its founder CEO, Yoram Novick.

He previously founded Topio sold to NetApp in 2006 for $US160 million and he spent several years working on storage at IBM before that.

Coho Data: Well-known cofounders tackling data center storage

CTO, cofounder Coho Data, Andrew Warfield

Company: Coho Data

Funding raised: $35 million from Ignition Partners and Andreessen Horowitz

Why it's hot: Like others on this list, Coho Data is working on making enterprise storage faster and less expensive. The month after it came out of stealth, it closed a $US25 million Series B funding from Ignition Partners, and Andreessen Horowitz.

This is the new company from the folks who invented a technology called the 'Xen hypervisor,' an open-source alternative to VMware's flagship product. Citrix bought the commercial arm, XenSource in 2007 for $US500 million.

MemSQL: An alternative to Oracle's database with Facebook's roots

MemSQL CEO Eric Frenkiel

Company: MemSQL

Funding raised: $US45 million, including a $US35 million round in January from investors Accel Partners, Khosla Ventures, Data Collective, First Round Capital.

Why it's hot: MemSQL was founded by two former Facebook engineers Eric Frenkiel and Nikita Shamgunov, who walked away from their Facebook jobs, and a pile of pre-IPO stock options, to found their company.

MemSQL offers a commercial version of a database similar to the one Facebook built for itself. (Before Facebook, Shamgunov worked at Microsoft building its database product.)

This is an 'in-memory database,' meaning it runs really fast in a computer's memory. But it uses low-cost commodity servers, not expensive specialty servers that Oracle sells.

The young company, founded in 2011, has grabbed some impressive customers so far, including Comcast and Morgan Stanley.

Platfora: Making Hadoop a pleasure to use

Ben Werther, CEO, Platfora

Company: Platfora

Funding raised: $65.2 million, including a $US38 million round in March from Allegis Capital, Andreessen Horowitz, Tenaya Capital, the CIA's investment arm In-Q-Tel, Sutter Hill Ventures, Battery Ventures, and Citi Ventures.

Why it's hot: The big data trend relies on a new kind of data storing tech called Hadoop. Hadoop is open source and free. Unfortunately, it's really difficult to use. So many a company has cropped up to make Hadoop easier.

Platfora is one of those companies. Its software adds a search engine-like feature to Hadoop, to find data among massive amounts of it and to create charts.

It was founded by Ben Werther, who happened to be a college buddy of Larry Page. Sadly, he didn't join Page to help launch Google. But before doing this startup, he worked at Siebel Systems, Microsoft, and Greenplum, an early big-data analytics startup bought by EMC in 2010.

Tintri: Storage that offers amazing flexibility

Tinrti CTO and cofounder Kieran Harty

Company: Tintri

Funding raised: $US135 million total, including $US75 million in February on a $US600 million valuation. Investors are Insight Venture Partners, Lightspeed Venture, Menlo Ventures, and NEA.

Why it's hot: Like other vendors on this list, Trinti offers flash based enterprise storage for the data center. Trinti just came up with a unique way to move software between different vendor's server products, with a click of a button.

It allows an app to easily move from VMware to Microsoft Hyper-V. If it works as advertised, enterprises should love it.

Actifio: Ends wasteful storing of duplicate copies

Ash Ashutosh, founder Actifio

Company: Actifio

Funding raised: $US207.5 million, including a huge $US100 million round in March from Advanced Technology Ventures, Andreessen Horowitz, Technology Crossover Ventures, Tiger Global Management, Greylock Partners Israel.

Why it's hot: With that latest investment, Actifio was valued at $US1 billion. It came up with a new way to help enterprises find and delete duplicate copies of data while making sure that data is always available.

It's not the only company offering this tech, known as 'data de-duplication' but it has grabbed some powerful allies to sell its wares, including a partnership with IBM in February.

Pure Storage: Monster VC investment instead of an IPO

Pure Storage CEO Scott Dietzen

Company: Pure Storage

Funding raised:$474.9 million from investors including Sutter Hill Ventures, Redpoint Ventures, Index Ventures, Greylock Partners, Wellington Management, Tiger Global Management, T. Rowe Price.

Why it's hot: Instead of going public, Pure Storage opted to extend its time as a private company and do another investment round.

In April, it raised a whopping $US225 million round that valued the company at over $US3 billion. That valuation is bigger than the market caps of two of its public rivals: Fusion-IO and Violin Memory.

Pure Storage makes flash-memory enterprise storage systems and EMC has been looking over its shoulder at this startup. Over the course of 2013, EMC sued six former employees that joined Pure Storage, and then sued Pure Storage over the hiring of 44 former EMC employees.
$474.90

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