Intransa Scores $25M

With $25 million in new funding, IP SAN startup Intransa Inc. will chase OEM deals and grab at a lower-end market with a new system.

Intransa today announced its fourth round of funding, bringing its total to $74 million since 2000. Menlo Ventures led the round with participation from prior investors Advanced Technology Ventures (ATV), Sofinnova Ventures Inc., and U.S. Ventures. Menlo Partners managing partner Sonja Hoel joins the Intransa board.

Intransas round trumped the $20 million third round fellow iSCSI startup EqualLogic Inc. closed in June, and is the biggest round for a storage company since intelligent switch startup iVivity grabbed $26 million in May 2004 (see EqualLogic Scores $20M and IVivity Ingests $26M).

Is it worth so much? CEO Avi Katz says Intransa has hit its revenue target for all four quarters since it started shipping product in July of 2003. He wouldn’t say what the target was for the most recent quarter, but CTO Peter Wang told Byte and Switch in an interview in May that the startup’s goal was for $2 million in the quarter (see Peter Wang, Founder, VP & CTO, Intransa). Katz says he is looking for at least 60 percent growth each quarter to hit profitability by the end of 2005.

In an attempt to accelerate growth, Intransa is launching its second product, the IP3000, to go with its IP5000, which is aimed at the upper portion of the midrange market. Intransa targets the new system for SMBs, and Katz plans to cover the high end eventually. “We’ll continue to expand our product portfolio,” he says. “We’re going into the SMB market now, then we’ll expand upward.”It's debatable whether Intransa's SMB product will really wind up in small businesses. With a list price of $32,000 for a 2TB system and $38,000 for a 4TB, the systems seem more likely to find their way into more departments and small enterprises using direct-attached storage.

Intransa is among a handful of startups – along with EqualLogic and LeftHand Networks Inc. – that says it has made solid traction selling iSCSI SANs (see Panel Prompts iSCSI Love-In and ISCSI Shakin' Goin' On).

Both the iSCSI and SMB market are expected to grow in 2005, but so is the competition. Adaptec Inc. (Nasdaq: ADPT), Network Appliance Inc. (Nasdaq: NTAP), and QLogic Corp. (Nasdaq: QLGC) are already in the iSCSI space, and the major SAN vendors are expected to jump in soon.

Like its iSCSI rivals, Intransa hopes to join the big guys rather than fight them. “We are aggressively pursuing OEM deals with Tier 1 vendors,” Katz says. He won’t name the prospective OEMs, but EMC Corp. (NYSE: EMC), IBM Corp. (NYSE: IBM), Hewlett-Packard Co. (NYSE: HPQ), Dell Inc. (Nasdaq: DELL), and Sun Microsystems Inc. (Nasdaq: SUNW) are expected to tackle iSCSI soon. Katz says Intransa’s plan is to split its sales between the channel and OEMs. It already has strong channel partners in Bell Micro and Avnet (see Bell Micro to Resell Intransa).

Katz is vague about hiring plans – he says the company’s headcount is at 100 – but any addition is likely to come through outsourcing. Intransa already has an Indian development team (Intransa Gets Support From India).Intransa also has a handful of sales in India (see Intransa Deploys IP-SAN in India). Katz says Intransa’s first IP5000 customer, Indian IT systems and support provider Wipro Ltd., also purchased the IP3000 for disk-to-disk backup.

Like the IP5000, Intransa’s new modular system comprises iSCSI-based backend disk enclosures that are connected to dual-storage controllers via Gigabit Ethernet. The system connects to servers over Gigabit Ethernet and uses proprietary software for features such as volume management and software. But while the IP5000 scales to 24 TB and uses controllers from Celestica,Inc., the IP3000 scales only to 4 TB and is based on IBM x86 hardware (see Intransa Outsources to Celestica).

— Dave Raffo, Senior Editor, Byte and Switch