Cloudian Sees Huge Opportunity, Muscles Up with $125M Investment

Company signs joint venture for $100 million in procurement options and a $25 million equity commitment to support expansion of sales, marketing and engineering.

New-gen data management and storage software maker Cloudian has seen the storage future and is moving in a big way to prepare for what it sees as a monumental opportunity in the enterprise market.

The San Mateo, Calif.-based has crafted a $125 million joint venture with investment firm Digital Alpha to put more development and sales/marketing muscle behind Cloudian’s enterprise object storage systems.

The joint venture includes a utility financing facility of up to $100 million from Digital Alpha and its limited partners to enable flexible procurement options to accommodate customers’ fast-growing storage environments. It also includes a $25 million equity commitment to support expansion of Cloudian’s sales, marketing, engineering and customer-support organizations.

Those are non-trivial investment numbers for a tech segment (storage) in which companies spend 40 percent or more of their IT budgets.

Ironically, Cloudian's name belies its original purpose in that it was designed as an on-premises storage system that has since branched out to embrace cloud storage. In Cloudian's system, all storage--no matter where it's located--looks exactly the same to an admin.

The $100 million financing facility will enable consumption-model procurement of Cloudian products. IT groups are under heavy pressure to deliver services on demand, free of up-front capital outlays. While the public cloud is right for some of these workloads, others are best kept on premises. Cloudian’s claim to fame is that it enables smooth movement of data workloads between physical on-premises storage and various clouds.

Through this partnership, the company said, users can take advantage of an on-premises solution that provides the data sovereignty, performance and control of enterprise storage together with the economics of a pay-per-use model.

Digital Alpha will also support the development of a partnership between Cloudian and Cisco Systems, which covers relevant data-center architectures. Cloudian's data-management features, integrated cloud-storage management and broad interoperability provide a differentiated solution that has helped the company double its installed base to more than 200 customers in 2017.

This joint venture plans to capitalize on the skyrocketing growth of object storage in 2018, which is driven by the convergence of massive data growth, the emergence of the Amazon S3 API as a de-facto industry standard and accelerating artificial intelligence/machine learning and Internet of Things (IoT) use cases.

The deal between Cloudian and Digital Alpha may be only the first of a series of new financing arrangements involving data management and storage companies. This is because the continued influx of valuable business and consumer data into enterprise storage coffers is far more than anyone had projected—and the projections, which started at the dawn of the cloud age in 2006, were pretty high right from the beginning.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor of Features & Analysis at eWEEK, responsible in large part for the publication's coverage areas. In his 13 years and more than 4,000 articles at eWEEK, he...