Search for information about Infinidat, the latest data storage company founded by industry legend Moshe Yanai, and you’ll come up with surprisingly little. At least, you would until today.
That’s likely to change after Infinidat announced Wednesday it has raised $150 million in a Series B round led by TPG Growth, the venture capital fund of the private equity firm TPG. The round values Infinidat at $1.2 billion post-investment, and it brings the total raised by the company to $230 million.
Infinidat, a five-year-old Israel-based startup with its U.S. headquarters in Needham, MA, makes data storage arrays that combine flash storage with conventional hard disk drives. The company says the system, which it calls the Infinibox, has room for 2 petabytes of data and throughput speeds of up to 12 gigabytes per second. Infinidat is targeting enterprise customers, such as firms in healthcare and financial services, managed service providers, and cloud vendors that run an increasing number of apps in the cloud and have massive data storage needs.
“Infinidat is on the verge of revolutionizing the enterprise storage market with a dramatically simpler, more cost-effective storage solution offering unparalleled performance, capacity, and reliability,” Yanai said in a release. “The Infinibox storage solution has already been customer-proven and is in production in multiple Fortune 500 companies around the world.”
The money from the Series B round will go to marketing, channel development, and building sales infrastructure.
A Google search turns up relatively little on Infinidat beyond Gartner’s “cool vendor in storage technology” report from early this year, and even that notes the company is “unusually reticent on its product architecture, capabilities and future roadmaps” and has paid little attention to marketing.
That was a strategic choice made by Yanai, company spokesman Gareth Taube said. He wanted Infinidat to have a well-developed product that key early customers had tested and validated before drawing attention to the company. Infinibox first hit the market in the second half of 2013.
“This is in production. We’re not a startup where we’re waiting to launch our first product. We are selling enterprise-class storage, and people are buying it,” Taube said.
Although the company has said relatively little to the press, it has worked extensively on product development, which was financed by an $80 million Series A round from a group of private investors.
“There’s a lot of new and patented technology in this system,” Taube said, and it’s not in the commodity hardware the company uses but in the software. Infinidat has filed for more than 100 software patents.
The combination of software-defined storage and cheap commodity hardware has resulted in a product with flash-level performance but without the cost, with greater reliability, the company said.
“We figured out where the optimal balance between flash and hard disk is, and we architected a system that gave us the best power, the best price, the best availability, the best performance given all of those variables,” Taube said.
Infinidat also thinks that hard drives won’t be going away for a long time. Spinning disks are cheaper than flash and still more reliable, Taube said, and most enterprises only rely on flash to run a handful of their applications. Customers will want cheaper options to run everything else.
“This allows them to have another alternative at an aggressively reduced price,” he said.
While Infindat has managed to keep a low profile, Yanai can’t. A search for Yanai’s name reveals stories attesting to his leading role in creating the data storage industry—along with colorful anecdotes about helicopter rides for employees and boardroom battles.
Yanai is credited with developing the data storage technology that EMC used in the 1990s to overtake IBM as the top dog in the storage industry. EMC rode the success to become a multi-billion dollar company that saw its stock price increase 800-fold in the ‘90s. Yanai’s importance earned him an unusual but very lucrative contract that gave him 1 percent of the revenue from the products he developed.
Yanai’s influence at EMC was so great during those years that Forbes reported employees would joke the company’s name stood for “Eventually Moshe’s Company” before he left the company in 2001 following a reported power struggle.
Yanai returned to Israeli where he founded XIV, a data storage startup that IBM acquired in 2008 for a reported $300 million in what the Wall Street Journal called an attempt to revive its storage business and regain ground on EMC. For good measure, Big Blue also bought Diligent, a data deduplication startup co-founded by Yanai and Doron Kempel, who went on to found SimpliVity, another Boston-area startup with a valuation in excess of $1 billion. Yanai and IBM parted ways in 2010 over what was reported at the time as a disagreement over strategy.
After having helped EMC and IBM fight each other, Yanai and Infinidat will now take on both at the same time—as well as others such as HP and NetApp—as they go after the business of Fortune 1000 companies around the world. Those companies are looking to replace and upgrade their old data storage systems or build out new data centers as more applications move to the cloud and the volume of data continues to grow.
Taube said Infinidat has a larger, faster, more reliable system that’s also cheaper and greener, which could cut down on the considerable power bills data centers create. He said reliability tests show the system will be down for less than 3 seconds a year. The company says the price per gigabyte works out to less than $1.
Taube claims the pitch is resonating with early customers and that Infinidat already is taking business from EMC and IBM.
“It’s a very interesting market right now in that you’ve got some very large incumbent players with architectures that are outdated,” Taube said. “Then you have players like us coming into the market trying to change the paradigm. It will be interesting to see how the big players will have to adjust.”
