GlassHouse Gleans $7.1M

Storage consulting company GlassHouse Technologies Inc. has landed $7.1 million in third-round funding, bringing the total invested in the company to date to $15 million (see GlassHouse Clears $7.1M Round).

Kodiak Venture Partners, a new investor, led the round. All of the startups existing investors -- including Globespan Capital Partners, Grandbanks Capital, and Sigma Partners -- also participated in the round.

“This gives us the opportunity to grow organically much quicker, and to continue to invest in our intellectual property,” says Mark Shirman, GlassHouse's president and CEO. He adds that the cash injection will give the company the ability to more freely look for appropriate acquisition targets, both in the U.S. and Europe.

While the extra dough, which Shirman claims came in a significant up-round, will certainly come in handy, GlassHouse says it doesn’t actually need it. The company, according to Shirman, reached profitability in the third quarter this year -- a quarter ahead of schedule.

“We hadn’t even decided to go for more money, but then we started getting unsolicited term sheets in,” he says. “Then we got some more term sheets in.” [Ed. note: I wasn’t planning on getting another credit card, but those unsolicited offers kept dumping into my mailbox...]So why were investors so eager to pour their money into the Framingham, Mass.-based company? Shirman insists it’s because the company, which was founded in August 2001, has taken a unique approach to SAN consulting (see our report on SAN Consulting Services).

Unlike service and consulting offers from companies like CNT (Nasdaq: CMNT), EMC Corp. (NYSE: EMC), and IBM Global Services, GlassHouse, according to Shirman, isn’t selling any products. This allows the company to suggest the best products for the job without bias, as well as to work in existing storage environments, regardless of which vendors are being used, he says.

“Customers are looking for manageability and predictability in their storage environments. We offer that -- without pushing a product.”

More important to investors than its unique approach is perhaps the fact that GlassHouse has customers. Shirman says the firm now has about 340 customers worldwide, ranging from large enterprises like biotech firm Biogen to government customers like the State of Washington, as well as small and medium-sized businesses. Of course, the company appears to have netted most of those customers when it acquired the remains of bankrupt NAS vendor Auspex Systems in June this year (see GlassHouse Picks Auspex's Bones).

In any case, Shirman says that GlassHouse is on a rapid growth path and that it is actively adding to its just-under-100 employee headcount.— Eugénie Larson, Senior Editor, Byte and Switch