Isilon Snags $8.4M

Isilon Systems, a highly stealthy company in the networked storage space, has closed $8.4 million in a first round of funding. Investors include Atlas Venture and Madrona Venture Group LLC.

Isilon says it plans to use the funds to complete development and launch of its patent-pending distributed file storage products. And on these, the companys lips are firmly sealed.

But here’s what we’ve gathered. Isilon’s products will specifically target hosting companies delivering rich-media content. Like another startup, Storigen Networks (see Storigen: Echoes of Akamai), Isilon believes storage resources should be distributed across the network and, preferably, closer to the user.

Isilon will use off-the-shelf hardware and its proprietary software to build what it calls “massively scalable, highly available and cost-effective distributed storage systems.”

"Through my experience building the MSN business at Microsoft, I am acutely aware of the importance of scaleable and reliable storage systems and the shortfalls of current storage solutions," said Laura Jennings, senior investment principal at Atlas Venture. "We believe that Isilon has a product that will enable content delivery and hosting companies to solve real storage problems facing the industry today."Sounds terrific. But given the current market slowdown, just how many more startups building “massively scaleable distributed storage systems” can the market support? Most of the companies in the Byte and Switch Top 10 list have similar objectives (see Top Ten Private Storage Networking Companies). Indeed, the venture capital community has flooded this sector, with better than $2 billion invested so far (see Venture Capital Survey). Add to this, the ongoing developments of more established players such as EMC Corp. (NYSE: EMC).

This hasn’t put off Isilon. While at RealNetworks (NASDAQ: RNWK), Sujal Patel, now founder and CTO of Isilon, says he saw many content delivery companies “struggle with the limited scaleability and high cost of existing storage solutions... Our solution, unlike anything else currently available, directly addresses these problems.”

— Jo Maitland, Senior Editor, Byte and Switch http://www.byteandswitch.com