Can Troika Triumph on Take Two?

Five-year-old Troika Networks took one step closer to getting its storage "super appliance" out the door, announcing that it has received $13 million in a fourth round of funding (see Troika Raises $13M).

A new investor, Anthem Venture Partners, led the round, which brings Troika's total funding to $67 million. Previous investors Draper Fisher Jurvetson, Dynafund Ventures, and Windward Ventures, as well as new investor Hamilton Apex Technology Ventures, also participated in the round.

"We think they have the best technology in their class," says Bill Woodward, the CEO of Anthem Venture, who adds that this is the VC's first investment in a storage array company. "It's got good people... and is in a really good place in the storage ecosystem."

Troika says it will use the latest cash injection, which was $1 million short of what it had been aiming for, to complete the development of its Network Storage Services platform [ed. note: ingeniously named!] and bring it to market later this year. The company was founded in 1998 (see Troika Strikes Back).

"We plan to make this our last round," says Troika CEO Bill Terrell. "The company is well funded to take itself to breakeven and beyond." He wouldn't say when the company might reach that elusive breakeven mark.The platform is Troika's second shot at making it big in the storage networking market. Its first attempt, which involved building SCSI-to-Fibre Channel host bus adapter software, ended in a $10.5 million fire sale of the product's intellectual property rights to JNI Corp. (Nasdaq: JNIC) (see JNI Buys Troika's HBA Software).

Terrell says the company's focus now is on the soon-to-be unveiled storage networking device, which Troika claims combines the scaleability of an intelligent switch with the software functionality of an appliance. The company says the product, which is still in the pre-beta stage, will enable customers to nondisruptively move storage applications like volume management, migration, mirroring, snapshots, copy services, and asynchronous replication, into the network. A single device also apparently has the ability to host multiple and disparate applications at the same time, according to Troika [ed. note: not to be confused with Troika Entertainment, producers of Cats, the longest-running frightful musical in Broadway history].

That may well be, but there's still the very real question of how well the new platform will actually work, as the product isn't even in beta yet. Then Troika will have to prove it can stand up against the host of intelligent switch providers in the market, which include Brocade Communications Systems Inc. (Nasdaq: BRCD), Candera Inc., Cisco Systems Inc. (Nasdaq: CSCO), Maranti Networks, MaXXan Systems Inc., Sun Microsystems Inc. (Nasdaq: SUNW), and Sanera Systems Inc.

Terrell says he's not worried. The flexibility of the platform will not only override doubts connected with its novelty, he says, but could also turn would-be competitors into customers.

"It's not, strictly speaking, a switch. It has storage-array-like ports," he says, claiming that this allows customers to integrate it into any existing Fibre Channel fabrics and with any of their existing SAN switches. "The platform is very friendly to legacy installations... It doesn't have the compliance constraints of the fabric switch."Enterprise Storage Group Inc. analyst Steve Duplessie agrees that the platform's flexibility should make it attractive. "The place where they're playing has been massively overlooked," he says. [Ed. note: is "massive overlooking" possible? Just axin'.] He adds that Troika's device sits outside the data path, so the risk of deploying it is less than it would be for an intelligent SAN switch.

While the industry will ultimately move toward the IP vision Cisco encompasses, says Duplessie, there are still many legacy Fibre Channel SANs out there, and companies don't want to just throw them away. "They need to go get the software guys to understand that they can wait two years to put their stuff on Cisco, or they can put it on [Troika's] platform today," he says.

Terrell wouldn't comment on how many employees Troika currently has (in early April, Byte and Switch reported that Troika had about 70 employees), or on what percentage of the company's staff is comprised of engineers. "We're right-sized today," he says, admitting that the company has gone through its share of layoffs over the past year. He says the latest round of funding could spur "a modest amount of [headcount] growth."

Will this latest -- and, the company claims, final -- round of $13 million be money well spent? Let's hope Troika's second run at the storage networking market fares better than its first.

Eugénie Larson, Reporter, Byte and Switch