Deduplication Provider Diligent Gets Big VC Boost

 
 
By Chris Preimesberger  |  Posted 2007-08-20
 
 
 

More evidence that deduplication software continues to be a hot data storage property was revealed Aug. 20 when Diligent Technologies announced that it has completed $10.5 million in Series D venture capital funding, bringing the total amount raised to date to $46.5 million.

New investor Eastward Capital joins existing investors Matrix, Accel Partners and Gemini Investors to support Diligent in this round of funding. Diligent will use the funds to further its research and development of enterprise-class data protection technologies and to acquire additional resources across its sales, support and engineering staff, a company spokesperson said.

Diligent, based in Framingham, Mass., provides enterprise-class deduplication and data protection software for virtual tape libraries. Its target market is the Global 2500—companies that store and back up 10 terabytes of data or more each evening.

Diligent sells most of its software to large hardware companies. Hitachi alone accounts for 50 percent of Diligents OEM business, CEO and Chairman Doron Kempel told eWEEK.

Read more here about how deduplication is becoming a hot trend in storage.

Deduplication is a method by which all redundant copies of data and files are eliminated to improve overall data accessibility and drive down operational costs.

Deduplication can be applied at several points in the information-gathering process: as data enters the system, at the server level or at the storage level.

In recent months, deduplication provider Data Domain has gone public, and smaller companies such as Avamar and ADIC Rocksoft have been acquired by EMC and Quantum, respectively, for big money.

"We are experiencing a significant and rapid increase in demand for our ProtecTIER enterprise data deduplication platform," Kempel said.

"In order to meet this demand, we raised funds that will allow us to increase our coverage in the field, enhance and accelerate our R&D plans as well as meet the demands of new Tier 1 and Tier 2 distribution partners that we will soon announce."

Kempel told eWEEK that "we are hiring all the engineers we can find to move our development efforts forward. We also want to beef up our support teams."

Storage analyst Heidi Biggar of Enterprise Strategy Group told eWEEK that "this is great news for Diligent and is further testament to the strength of the company, its strategic partnerships, and its technology (both data de-duplication and VTL). The funding should help carry them to the next level."

On June 11, Diligent launched two new versions of its data protection platform aimed at midsize IT environments.

To read more about EMCs purchase of Avamar, click here.

With its ProtecTier Mid-Range packages, Diligent now has a small to midsize environment that can achieve enterprise-class, disk-based data protection at a lower price for smaller businesses, a company spokesperson said.

Diligent first introduced ProtecTier in 2005; it is powered by HyperFactor, its in-line data deduplication feature.

Does Diligent have the goods to compete with a pack of market sharks that include Data Domain, EMC Avamar, Quantum, NetApp, and several others?

"Absolutely, not only is Diligent a legitimate dedupe contender, but the company is positioned to take a real leadership position in the high end of the market," Biggar said.

"You have to remember VTL with dedupe is still an emerging market, and Diligent does have a head start in this area. Diligent has a ton of customers that are actually using their dedupe in the data center. Diligent has been dealing with the high end of the market that has to be concerned with a higher demand performance and capacity requirements.

"We dont see Data Domain and Diligent really competing in the market—they may have similar messages but right now are going after different markets."

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