Sistina Seeds Growth

Sistina Software Inc. announced today that it has secured $10 million in Series B funding, following what it says was significant customer traction last year. The round brings its total investment to date to $20 million (see Sistina Picks Up $10M).

The Minneapolis-based global file system company expects the funding to carry it through to profitability by year's end. The lead investor was Crescendo Ventures -- an investor in NuSpeed, the storage router company acquired by Cisco Systems Inc. (Nasdaq: CSCO) -- with additional investment from St. Paul Venture Capital and Validus Partners.

Sistina, which makes a clustered file system based on the open-source Linux kernel, says it was able to raise the funds because it won 50 new customers in 2002. "And that's despite the bad economy," notes Joaqun Ruiz, VP of marketing and product management at Sistina.

Ruiz says the types of customers adopting Sistina's software began to shift halfway through last year. "The mix changed from mainly high-performance, computing-oriented customers like NASA and FermiLabs, to telcos and financial institutions." However, Sistina was unable to provide the names of its new customers (see Sistina Tunes In to Enterprises).

The reason for this shift, says Ruiz, is that many organizations are moving toward an "incremental compute model," a concept Forrester Research Inc. calls "organic computing."In the mid-90s, companies bought bigger servers than they needed so they wouldn't have to replace them the minute they hit maximum capacity. But this over-provisioning meant they were paying for a lot of equipment that wasn't being used.

"Instead of doing these forklift upgrades, companies are now looking to spread the workload across multiple servers," says Ruiz. Sistina contends that a distributed file system like its Global File System (GFS) lets organizations consolidate existing server and storage resources into a single management domain, linking thousands of diverse data storage repositories into a single SAN. Essentially, each server shares a single file store and can serve files to other systems on the network via Common Internet File System (CIFS) and Network File System (NFS) protocols.

In order to support its customers in the financial services and telecom sectors, Sistina will spend its new funds expanding its internal sales and support organization and its channel. "Our banking customers need 'round-the-clock support. Whereas our older customers could just reboot a server, these guys in banking cannot go down," says Ruiz.

Sistina also intends to ink more partnerships like the one it has with Mainline Information Systems, one of IBM's biggest server resellers. "Expect more of these announcements with Hewlett-Packard Co. [NYSE: HPQ] and other major systems players," Ruiz says (see Sistina Clusters Linux on Mainframes