Funding Cheer for Two

MaXXan Systems Inc. and Archivas Inc. closed funding rounds today that should help them stake claims in fledgling markets next year (see MaXXan Scores $29M and Archivas Secures $10M ).

MaXXan pulled in $29 million in fourth-round funding, one of the market's biggest hauls this year, in anticipation of the intelligent switch market taking off. Archivas closed a $10 million second round to help bring its fixed content archiving product to market.

BA Venture Partners led MaXXans round, which brings its total financing to $113 million. U.S. Venture Partners, Venrock Associates, China Development Industrial Bank Inc., and Inventec Corp. also took part in the round.

MaXXan marketing VP Ravi Chalaka says the San Jose, Calif.-based startup will build up its professional services division and interoperability lab, adding about 15 people to the 90-person company. The funding should be MaXXan's last, as it plans profitability in 2006.

MaXXan is among the handful of vendors presently shipping intelligent switches. Execs claim 60 customers, but the market probably won’t heat up until EMC Corp. (NYSE: EMC) enters the space next year with its storage router (see EMC Takes Storage Router for a Spin).“This market still has to mature,” Chalaka admits. “People are waiting to see the larger storage companies get into the market and demonstrate that it’s viable.”

MaXXan's intelligent switch is an in-band device similar to the SAN volume controller (SVC) from IBM Corp. (NYSE: IBM). MaXXan also is developing an out-of-band switch to compete with EMC's storage router (see IBM Sharpens Focus on EMC). And to cover all bases, it's shipping a Microsoft Corp. (Nasdaq: MSFT) Windows-based appliance with intelligent features.

MaXXan's out-of-band device will require partnership with a software vendor to supplement the intelligent switch with replication, mirroring, and other applications. MaXXan says FalconStor Software Inc. (Nasdaq: FALC) and StoreAge Networking Technologies Ltd. are possibilities.

MaXXan's funding comes even as some potential competitors shut their doors. Candera, for instance, shut down recently after raising $59 million in funding (see Candera's Closed). Switch startup Sandial, although not featuring an intelligent switch, closed in September after failing to gain funding -- partly because investors chose MaXXan instead, sources say (see Sandial's Out and Sandial's on the Clock ).

Still, plenty of competition remains. Cisco Systems Inc. (Nasdaq: CSCO) ships an intelligent switch running IBM’s SAN volume controller, and, along with Brocade Communications Systems Inc. (Nasdaq: BRCD) and McData Corp. (Nasdaq: MCDTA), will be an EMC storage router partner. Startups Maranti Networks Inc. and Troika Networks Inc. also have intelligent switches (see More Money for Maranti and Troika Turns a Corner).Like MaXXan, Archivas is looking to a market that has yet to be solidified, in this case, content-addressed storage (CAS). EMC Centera is by far the leader in the young market, but startups Permabit Inc. and Archivas offer a challenge. Archivas CEO Gary Voight is banking on companies being reluctant to get locked into EMC.

“EMC’s already making the market,” Voight says. “Then we’ll come in with a more open product.”

Archivas’s funding round includes original investors North Bridge Venture Partners and Polaris Venture Partners, and a new investor Solstice Capital. Total funding is now $16 million.

Voight says he expects Archivas will double its headcount to 60 by the end of next year by pumping up its sales, R&D, and support teams. The CEO is a new addition, having come aboard in September as founder Andreas Rodriguez moved from CEO to CTO (the post he held at the New York Times when he conceived of the idea for Archivas Cluster (ArC) product). Voight was previously CEO of Sofware AG, an enterprise application software company (see Archivas Arrivas).

Voight’s biggest priority will be to push sales. Archivas came out of stealth in April, but it is still looking for its first paying customer. Voight says he has $1 million in orders from six companies, but only NASA's Goddard Space Center is a confirmed customer.— Dave Raffo, Senior Editor, Byte and Switch