Top Ten Private Companies: Spring 2006

NEW YORK CITY, March Ah, spring! What better time for a renewal of the Byte and Switch Top Ten Private Companies list?

Our latest iteration reflects a fair bit of change, with four new entrants. Actually, make that three new entrants and a returnee. After being jettisoned from our list in 2004, BlueArc returns to the top slot, thanks to its recent progress.

BlueArc takes the place of CommVault Systems Inc. , which ruled our last three Top Ten lists but took itself off by filing for an IPO that should make it a public company by summer. (See CommVault's Taking the Plunge.) If successful, CommVault may serve as a role model for others on our list that have held back on a public bid until the time was right.

Then again, some Top Tenners are as likely to be acquired as to take the public plunge. A couple of years back, the storage industry was like a season of Survivor – it was a question of which companies got voted off the island and out of business. Now it’s like Deal or No Deal. It’s a matter of who's getting bought and by whom.

Some startups won't get what their founders feel they deserve. Lots of acquisitions these days are technology buys, where large vendors pick up pieces they are missing from companies that have good engineering but haven’t made a strong go of the business yet. Blockbuster deals like Hewlett-Packard Co. (NYSE: HPQ)'s grab of AppIQ last year are likely to be relative rarities. (See HP Chomps AppIQ & Peregrine.)Of course, the companies we've picked for our Top Ten are ones we think capable of standing alone as businesses. They are also involved in what we feel are the hottest areas of storage networking. Included in this round are makers of virtual tape libraries (Sepaton), continuous data protection (Revivio), and de-duplication software (Data Domain).

At the same time, we're putting three of our past list out to pasture – Acopia Networks Inc. , Asigra Inc. , and GlassHouse Technologies Inc. – in part, because their particular market niches have cooled or stabilized.

So how do we determine who's most in tune with the forward progress of the industry, both in terms of their focus and the strength of their business? Our basic criteria for consideration are as follows. Each company must be:

Beyond these basics, it's our own subjective evaluation, plain and simple.

So without further ado, enjoy our latest list. For a writeup on each company, click on its name in the table below:Table 1: Top Ten Private Storage Networking Companies

— The Editors, Byte and Switch

BlueArc Corp. , a fixture on this list for more than two years before hitting the Bit Bucket in late 2004, is back in a big way.

To understand why we reinstated BlueArc, it helps to review why we dumped them. From late 2004 through the end of 2005, BlueArc was a company in transition, and the signs didn't look promising. CTO and founder Geoff Barrall bailed out in January 2005, and Gianluca Rattazzi gave up his CEO post last April. (See BlueArc's Barrall Says Bye Bye.) BlueArc investors needed to pump $15 million more into the company last June – bringing its total funding to a whopping $175 million. (See BlueArc Pulls In $15M More.) And its Titan NAS product line was getting long in the tooth.

What's changed? Practically everything. Management is stabilized under CEO Mike Gustafson, sales are up, the company is in a growth mode, and its new Titan 2000 family is winning rave reviews from industry analysts and customers. (See BlueArc's Gustafson Moves Up, Genome Sequencing Center at Washington U., and BlueArc Beefs Up Titan.) NAS is making a resurgence as it's becoming clear the industry can support Network Appliance Inc. (Nasdaq: NTAP) and EMC Corp. (NYSE: EMC) plus at least a few startups. (See NAS-tronomical Year in Funding.)It also helps BlueArc's reputation that Larry Ellison's Pillar Data Systems Inc. has replaced it as poster boy for overfunded storage startups. (See Pillar Leaves Post – At Last.)

"We're not going out of business," Gustafson says, "for the seventh year in a row."

Gustafson says BlueArc will double its sales force this year after rolling out its new systems. The company claims 160 customers with 500 systems deployed at an average of 40 Tbytes per system – up from 25 Tbytes last year and 15 Tbytes in 2004.

The Titan 2000 includes several significant technological advances over its predecessor, including:

The upgrade came after BlueArc added virtual servers, policy-based data migration, iSCSI support, remote volume mirroring, and WORM file system support last May. (See BlueArc Titan to Battle Giants.)Bottom line? BlueArc's investors may not have their exit strategy in clear view yet, but it's looking better than it did a year ago.

3PAR Inc. maintains its spot on our Top Ten, thanks largely to ongoing momentum in the form of new customer deployments in the online services sector.

Since September 2005, 3PAR claims to have increased the customer base for its InServ Storage Servers from 100 customers to about 250 deployments among roughly 130 distinct customers. Not bad, but more compelling when one considers the kind of big fish 3PAR is snagging.

Recent additions include large online businesses such as MySpace.com, Shopzilla, and Claria Corp. These join other large online firms announced over the last two years, such as eHarmony, FreshDirect, and Priceline.com.

3PAR’s deals with MCI –now Verizon Communications Inc. (NYSE: VZ) – and with Savvis Communications Corp. (Nasdaq: SVVS) are further evidence of the vendor’s emphasis on big, service-oriented customers. (See Savvis Stakes Virtualization Claim.) And there are the partnerships with nearly everyone who’s anyone in storage networking. This is a company that thinks big.“Probably half of our customers today are either hosting companies, ASPs, or hot Internet companies,” boasts VP of marketing Craig Nunes.

The challenge for 3PAR will be to maintain its momentum. While it continues to charge hard with partnerships and customer wins, 3PAR must also keep an eye on the kinds of technological advantages that helped its success early on. One of these first innovations, thin provisioning, buoyed the supplier’s success by enabling users to do more with less disk. But even though 3PAR has preannounced the follow-on to this technique, which will add policy management, the upgrade is a distance from delivery. (See 3PAR Intros Utility DLM.)

One thing that may be closer is 3PAR’s financial breakeven. “Our burn rate has come way down,” Nunes says. “Financially, we’re in incredible shape.”

3PAR’s future depends on whether it can keep pace with its own ambitions.

Isilon Systems Inc. (Nasdaq: ISLN) presses onward and upward, having gained a foothold in lucrative vertical markets that place a high premium on storage clusters, such as gas and oil exploration, broadcasting, and digital media. (See Energy Firms Clamor for Clusters and Storage Shapes Up for Multimedia.)Isilon claims more than 100 customers and 2,000 systems shipped – most to Fortune 500 companies. (See Isilon Powers Gas Companies, NBC Taps Isilon for Olympics, and E!, Isilon Fuel Growth .) Brett Goodwin, VP of business development, says the startup more than tripled its revenue in 2005 over the previous year.

A big part of Isilon’s success lies in its ability to improve its product with enhancements and new technology while maintaining its Isilon IQ family of systems. For instance, it began offering higher-speed InfiniBand connectivity between nodes last year, and now 95 percent of its customers order systems with InfiniBand switches. (See ISS Launches New Proventia Appliances.)

Its most recent product upgrade addressed a common customer complaint that it required them to buy processing power and capacity together. Isilon now offers accelerator nodes with processors but no storage, for customers that want more performance and an expansion node with storage, but no processors that add only capacity. (See Isilon Taps the Accelerator.) The expansion nodes use SAS drives, making Isilon among the first to ship drives based on the new serial technology.

Some of Isilon’s largest customers – Kodak, Cedars Sinai, and Zoic Studios – were among the first to embrace the new IQ Accelerator nodes.

Isilon is already positioning itself to take advantage of Microsoft Corp. (Nasdaq: MSFT)'s desire to move into clustered computing with its Windows Compute Cluster Server 2003 (CCS). Although CCS won’t ship before midyear, Isilon is working closely with its Washington neighbor on testing. Isilon demonstrated an Isilon IQ clustered storage system running with CCS at a supercomputing show last November. (See Cluster Clamor and Microsoft, Isilon Demo.)Challenges remain for Isilon in the coming months. NAS leaders Network Appliance and EMC are moving to fix some of their shortcomings. NetApp expects to ship within months the first version of its operating system based on the clustering technology it acquired from Spinnaker in 2003. (See NetApp Nudges Closer to New OS.) NetApp and EMC are also close to having native global namespace that will make it easier to manage their systems.

NetApp will get its global namespace from the Spinnaker software, while EMC added global namespace to the file virtualization appliances it acquired from Rainfinity. (See EMC Refreshes NAS, SAN.) Also, as others move to virtualize their NAS storage – mainly NetApp and startup ONStor Inc. – Isilon systems still don't support storage from other vendors.

Goodwin isn’t worried. He says the $20 million funding round Isilon closed last May will be its last, and the startup’s goal remains to hit profitability by the end of 2006.

EqualLogic Inc. is determined to prove you can build a successful business around iSCSI. And more than any other pure-play iSCSI vendor, it seems to have succeeded so far.

While iSCSI remains a mere speck in the storage world compared to Fibre Channel, it is making steady inroads. The latest IDC numbers show the iSCSI market at $94 million for the last quarter of 2005 – representing merely 2 percent of the overall storage system market but a jump of 130 percent from the previous year. (See Networked Storage Up 24%.)EqualLogic is getting its piece of that growth. Its 17 percent of the iSCSI market last quarter – more share than any other startup – was up from 11 percent the previous year. And that increase came in the year that EMC jumped into iSCSI.

EqualLogic has tapped into the storage-lucrative healthcare market and picked up other customers looking for storage systems that are easy to use and help them save money over Fibre Channel. A common theme among EqualLogic customers is how easy its systems are to set up: Administrators John Rhon of nonprofit healthcare organization LifeLink and Alan J. Hunt of law firm Dickinson Wright say they set up EqualLogic PS arrays in an hour or less. (See LifeLink Gets iSCSI Recovery and Dickinson Wright.) EqualLogic also wins points for including management software in the price of its arrays.

You can expect the Fibre Channel vendors to turn up the heat on EqualLogic, LeftHand Networks Inc. , and other iSCSI survivors. Hewlett-Packard recently rolled out iSCSI connectivity for its EVA midrange arrays, and EMC will make expanded iSCSI support a key piece of its upcoming Clariion update. (See HP Plans HW/SW Upgrades and EMC, NetApp Ready New Wares.) NetApp also sees iSCSI as a lucrative growth area.

EqualLogic CEO Don Bulens isn’t letting that encroachment affect his business or technology plans. His startup expanded into Europe in February and became one of the first storage systems vendors to pick up a Microsoft Simple SAN designation this year. (See EqualLogic Moves Into Europe and EqualLogic Bumps Up Support.) He says EqualLogic's next system will be 10-GigE ready.

Still, don’t expect to see EqualLogic file for an IPO any time in the near future. Bulens says he agrees with CommVault CEO Bob Hammer’s philosophy of biding his time and letting the rest take care of itself. "Our goal is to build a successful business," Bulens says.EqualLogic claims more than 950 customers. Bulens says a first-time customer buys an average of 8.5 Tbytes, and a firm’s second order averages more than 12 Tbytes. "We are not a low-end SAN player," he asserts.

Riverbed Technology Inc. (Nasdaq: RVBD) stays on our list, thanks to its growing momentum in the wide-area file services (WAFS) and WAN acceleration sector. The startup, which has seen a number of its competitors snapped up by larger predators, remains the best positioned of the remaining privately held companies in this space. (See Cisco Acts on Actona, Peribit Deal: More to Come, and Brocade Invests in Tacit.)

Riverbed was one of the first vendors to offer both WAFS and WAN optimization. It competes with the likes of Availl Inc. , DiskSites Inc. , Expand Networks Inc. , Orbital Data Corp. , and Tacit Networks Inc. (See Expand Wakes Up to WAFS and Swan Revamps WAN/WAFS Kit.)

While frequently billed as a WAFS appliance, Riverbed's Steelhead product in fact works much like a WAN optimizer. It tweaks TCP to reduce protocol "chattiness" caused by repetitious packet exchanges. At the same time, it offers application-specific algorithms to reduce the overhead caused by Windows, HTTP, and MAPI traffic. The Steelhead appliance also reduces file transfer times by sending a reference to a file in place of the actual file.

Riverbed's Steelhead is based on Linux, which could make it more scaleable than products based on other operating systems. (See HP in Deal With Riverbed, Sources Say.)Users certainly seem to think so. Last summer, after just a year of shipping, Riverbed claimed 200 Steelhead customers. And just a little over five months later, that figure has topped 500, including the likes of software giant Mercury Interactive Corp. and financial services firm Allied Capital. The startup is also expanding into the lucrative Japanese and Korean markets. (See Riverbed Opens in Japan and Riverbed Launches in Korea.)

Riverbed is also gaining plenty of partner traction, opening up a broader channel to market than its rivals. Riverbed recently signed a deal for McData Corp. (Nasdaq: MCDTA) to OEM Steelhead appliances. (See McData Hits Remote Control and McData Chases Remote Users.) This partnership followed a major OEM deal with Hewlett-Packard to license Riverbed's core software on HP's StorageWorks Enterprise File Service (EFS) WAN Accelerator. (See Riverbed Licenses Tech to HP and HP in Deal With Riverbed, Sources Say.)

But Riverbed does not want to be seen as acquisition fodder. The firm apparently isn't for sale or looking for investors. CEO Jerry Kennelly has been sending signals through the financial community that he wants to take Riverbed public this year. Kennelly told Byte and Switch earlier this year he expects to be profitable by the end of 2006. (See McData & Riverbed: A Rumored Pair.)

Mellanox Technologies Ltd. (Nasdaq: MLNX) continues to climb the storage market on the strength of InfiniBand silicon.

The seven-year-old firm abandoned its end-user business entirely last year in order to focus on delivering parts to suppliers of InfiniBand gear, including Cisco Systems Inc. (Nasdaq: CSCO), Dell Inc. (Nasdaq: DELL), Engenio Information Technologies Inc. , Hewlett-Packard, IBM Corp. (NYSE: IBM), Isilon, SilverStorm Technologies Inc. , and Voltaire Inc.The strategy seems to be working. VP of product marketing Thad Omura claims the OEM customer count has doubled since August 2005, from 100 to over 200. Employee headcount has gone from 140 to 160.

“Year on year, we’ve had 100 to 150 percent annual revenues for four consecutive years,” Omura boasts.

The question is, Can the momentum continue? For now, InfiniBand appears to be sustaining popularity, particularly in data centers where clustering is used as an alternative to supercomputers.

According to Omura, the largest cluster in 2005 – 4,000-plus nodes at Sandia National Laboratories – has been quickly superseded in at least two or three sites.

But there’s a gorilla looming on the InfiniBand horizon: 10-Gbit/s Ethernet. Smaller players are starting to deliver systems, and chipmakers are signing up deals. (See 10-Gig IP SANs Hit Bleeding Edge, NetXen Singles Out 10-Gig, and Force 10 Fires Up Low Latency Switch.) Given that most supercomputer sites still use Ethernet instead of InfiniBand, does this worry Mellanox?“We always see a threat from 10-Gbit/s Ethernet,” Omura quips. But, he insists, 10-Gbit/s Ethernet is not close to catching up with InfiniBand on price/performance. Latencies remain higher than InfiniBand’s, and costs of 10-Gbit/s Ethernet NICs remain above $2,000 per port. InfiniBand, meanwhile, is already running at 20-Gbit/s and above and delivering the goods for less than $200 per card. (See Mellanox Doubles InfiniBand.)

InfiniBand is way ahead of its chief rival, Omura says. What remains to be seen is whether Mellanox can build itself up fast enough to ensure its future even when and if 10-Gbit/s Ethernet starts ruling the SAN. One approach may be to go public, a move that Mellanox is rumored to be considering. Omura won’t comment, except to say, “We certainly are driving toward that.”

Sepaton Inc. earns its position on the Top 10 list thanks to strong customer traction in the burgeoning virtual tape library (VTL) software market, as more and more users seek alternatives to tape that take advantage of low-cost SATA drives.

The Southborough, Mass.-based firm, which was known as SANgate Systems until late 2003, certainly seems to be heading in the right direction at a time when users are waking up to the benefits of VTL software. (See Sepaton's Got Virtual Tape, and SANgate Tries Again.)

Earlier this year, for example, Sepaton announced that it had reached the 150 customer mark, with more than a smattering of big-name clients. These include AAA, China Construction Bank, Citistreet, Foxwoods Casino, Harris Corp., KeySpan, and telecom giant MCI Inc. (Nasdaq: MCIP). (See Sepaton Claims 150 New Customers .)One Sepaton customer told Byte and Switch that, compared to other vendors in this space, the startup benefits from faster speeds for restoring data. Michael Grillo, principal IT engineer for Foxwoods Casino, says Sepaton won a bakeoff over Neartek Inc. 's Virtual Storage Engine and EMC's Clariion Disk Library (CDL) last year – mostly because it produced faster restores.

"Speed was the heavy hitter in making our decision," Grillo says. He also liked that Sepaton scaled easily, as lack of scaleability is a frequent complaint with VTL products. "I initially purchased 40 Tbytes and bought another 20 because of growth four months later. It came in, I plugged it in, did one boot, and I had an additional 20 Tbytes of disk."

Initial signs are that Sepaton's OEM partnership with HP is also starting to bear fruit. Sepaton also has added remote-site backup and extended its VTL capacity. (See Sepaton Goes Standard on VTL , HP Upgrade Features OEM Crowd, HP Integrates Sepaton, Sepaton Enhances VTL, and Sepaton Adds Remote Rep.)

On the financial side, the startup is going from strength to strength, recently claiming 300 percent annual revenue growth and, in November, racking up $15 million in VC funding to support its product development. (See 2005: The B&S Report Card and Sepaton VCs Raise Their Bid.) That round brought Sepaton's total funding to $68.6 million.

CEO Mike Worhach won’t rule out going back for more funding, but he projects Sepaton to reach breakeven by the second quarter of this year.But Sepaton is not the only private company making waves in this part of the market. The startup faces increasing competition from an expanding list of VTL competitors as well as other disk-based backup systems presenting alternatives to tape. Rival startups Copan Systems Inc. , Diligent Technologies Corp. , MaXXan Systems Inc. , and Neartek, for example, remain in the game. (See Copan Cops $17.5M.) Then there are compression vendors such as Avamar Technologies Inc. and Data Domain Inc. (Nasdaq: DDUP), which claim to reduce the disk space needed to back up data. Watch this space.

If you’ve been shopping for backup that goes a little faster, works a little harder, or makes more efficient use of disk resources, chances are pretty good you’ve run into a vendor pushing data protection.

While there are lots of companies in this space, we’re singling out Data Domain Inc. (Nasdaq: DDUP) for its technology, the traction it’s gained with customers, and an August 2005 round of funding that brings its capitalization to $41 million. (See VCs Add $15M More to Data Domain.)

This is not to say that Data Domain is head and shoulders above its many competitors, which include Asigra, Avamar Technologies, and Diligent Technologies Corp. If Data Domain has any edge, it’s a slight one, and the momentum in this niche may very well shift six months from now.

The term “data protection” gets liberally interpreted to include just about any company that ever set foot in the backup space, but as this slice of vendors (re-)defines it, data protection offers more than regular weekly backups and daily incrementals. First, these vendors may also offer compression, either at the application server where the data originates or on the disk end where the stored data resides. Further, they claim to handle de-duplication that preserves data integrity. And they say they can provide backup more cheaply than tape or virtual tape vendors can.Data Domain’s portfolio is small: The DD460g, a gateway server that compresses data for storage on customer disk arrays, is the newest product. (See A Storage App Without the Storage.) The vendor considers the DD400, an appliance with a built-in disk, its flagship product and says it will discontinue the DD200. The vendor boasts customers as varied as Children’s Hospital Boston, the accounting firm of Mohler, Nixon & Williams, and Quicken Loans Inc.

Data Domain products only became commercially available at the end of 2003, but there are now 800 systems in the field and some 250 customers, according to Brian Biles, vice president of marketing. “We’ve grown 600 percent year over year,” he contends, noting one third of revenue in 2005's fourth quarter came from non-U.S. customers, with another third from existing customers buying upgrades or extensions.

“Data Domain’s claim to fame, without question, is the compressability of data and, at the same time, the non-disruptive quality of that capability,” notes Arun Taneja, founder of storage consultancy the Taneja Group . He notes that Avamar compresses at the application server to minimize the amount of data that’s then transferred across a local or WAN link for storage; the downside here is it uses CPU cycles from the app server. Data Domain handles compression on the storage end of the equation, and as such, is less disruptive to the way most storage managers think of, or execute, backup.

“Data Domain doesn’t ask the customer to change procedures as Avamar does,” Taneja explains. “Any time you ask them to change, you get pushback, so Data Domain has had a little easier liftoff.”

Still, he credits both vendors with evangelizing the whole compression phenomenon, which just about overnight has become a “must-have” for larger, more established storage vendors. Witness the premium paid for startup Rocksoft in mid-March, suggesting there was a bidding war that ended $63 million later, according to Taneja. (See ADIC in De-Dupe Deal.)Biles doesn’t flinch when pressed about whether his company is being groomed for acquisition. “We’re early to market with a core platform technology that a lot of people will realize they need somewhere down the line,” he says. The DD line tripled capacity and doubled throughput from first generation to second, and that’s a feat the company will repeat a few times in the next couple years, Biles claims.

“The only thing we think about is growing to be a large, independent company. There are various eventualities, but staying independent gives us better leverage against whatever else comes up,” Biles says.

Of the startups currently vying for dominance in continuous data protection (CDP), Revivio Inc. stands out for its ability to command enterprise respect.

While CDP is still relatively immature, there is growing momentum behind the technology, which captures all the changes made to data. The idea is that this allows users to restore any good version of a document or application in case of a system or media failure.

Unlike virtual tape libary (VTL) backups, which usually activate just once a day, CDP technology, as its name suggests, works on a continuous basis, monitoring write-and-log I/Os with time-stamps to enable recovery from any point in time.Revivio, unlike many of the other CDP vendors, handles data at a block – as opposed to file – level, enabling quicker backups and broader application support. Another startup, Mendocino Software , also handles data at the block level, but that vendor's OEM deals with EMC and HP are only just getting off the ground. (See EMC Pulls Forward With Backup and HP Picks Mendocino .)

Other private companies playing in this space include CA XOsoft and Zetta Systems Inc. , but Revivio gained the most VC-backing of the three last year, completing a $25 million Series C. This brought the startup's total funding since its October 2001 inception to $55 million. (See Revivio Revs Up With $25M, NAS-tronomical Year in Funding, and Revivio Revs Up .)

Things are also progressing nicely on the customer front. Revivio has clinched deals with the University of New Mexico, Forbes.com, Baptist Memorial Healthcare, SAS Institute Inc., and PrairiePackaging. (See Firm Rolls With Revivio, Baptist Memorial Healthcare, Hospital Prescribes VTL, CDP, Healthcare Prescribes Storage, and Revivio Turns SAS Onto CDP.)

The Lexington, Mass.-based firm has also been racking up partners at a clip, announcing deals with Intel Corp. (Nasdaq: INTC), VeriStor Systems Inc. , Data Protection Associates, and Networks Plus Technology Group, among others. (See Revivio Shifts into High Gear , SANZ to Resell Revivio, VeriStor Offers Revivio CDP, and Revivio Joins Intel Community.)

The next few months, however, will be crucial for Revivio, as big-name vendors like EMC and HP crank up their own CDP strategies. But at least the startup is planning for tough times, recently appointing a new CEO, Terry Leahy. (See Revivio Names CEO , Microsoft Backs Up on CDP Claim, IBM Hops CDP Bus, and 2005 Top Ten: '06 Storage Predictions.)In this climate, Revivio might just be ripe for picking by one of its larger competitors. Network Appliance has already flashed its cash for Alacritus, and earlier this month, Atempo Inc. swallowed up Storactive for an undisclosed fee. There's a chance Revivio could well be next in line to get snapped up. (See NetApp Annexes Alacritus, NetApp Readies Virtual Tape, and Atempo Swallows Storactive.)

But who knows what things will look like next year? At the moment, user feedback suggests that Revivio is winning business thanks to its strong customer base and the fact that the vendor has a clearly identifiable product. This situation, however, could change significantly a year from now when Mendocino's OEM deals are in full swing.

Onaro Inc. is in Phase Two as far as its products and business strategies go.

The first phase – under founder Shai Scharf – consisted of bringing out an application that handled change management in storage and winning acceptance for that new concept. (See Shai Scharf, CEO & Co-Founder, Onaro and Onaro Ships Change Manager.) Now Onaro has a new CEO and is looking to demonstrate that its SANscreen platform can do more than just manage change in SANs.

Doug McNary, named Onaro CEO last October, has a strong sales background. He headed sales at bandwidth management software company Motive and Web publishing firm Trellix and also held sales executive positions at Tivoli Systems, Technology Concepts, Wang, and General Electric.McNary says Onaro has around 40 customers, with many of them large installments, such as State Street Global Advisors and Priority Health . McNary expects to at least double that by widening the product line and expanding into Europe and Asia.

Onaro upgraded its core product, recast its business continuity module, and added a reporting tool earlier this month. (See Onaro One-Ups SRM.) McNary expects to launch another product near the end of the year. He says the new products are built around treating storage as a service.

McNary is also pursuing partnerships that could take Onaro beyond SAN management into NAS and even networking.

"Our enabling technology is designed to address many aspects of the IT discipline," he says. "It's a modeling engine with advanced change management capabilities. For now, we’re focused on the storage space. Anything we would do beyond that would be in deep partnership with somebody."

EMC – with its Smarts software – and other large storage vendors have designs on going the same way as Onaro. (See EMC Smartens Its NAS.) The key for the 40-person startup is whether the large guys see Onaro as competition or potential partner. Will the established storage vendors buy change management capabilities from Onaro or develop them on their own?"There are a number of major storage vendors that recognize that this is an area they need to address," McNary says. "There are various ways of addressing that. One is working with us."

In every iteration of our Top Ten, there are inevitably a few companies that fall off the list, sometimes softly, sometimes with a loud, embarrassing thunk. But note, please, that landing in the Bit Bucket does not necessarily mean we think companies aren't doing well.

Still, this list isn’t about well. It’s about outstanding.

So, with the hautiness of a Simon Cowell, we proceed to name our three Bucketeers:

GlassHouse Technologies Inc. continues to add customers and services. It’s boosting its sub-business in taking over support duties for some storage suppliers. Yawn. Wake us up when this firm does something to change the nature of networked storage – or better yet, when it goes public.After a running start in the network file virtualization market, Acopia Networks Inc. has settled into a slow, steady jog. Indeed, the heat’s gone out of this race for the time being. Rivals Rainfinity and NuView have been bought by EMC and Brocade, respectively, leaving Acopia and NeoPath Networks as the chief standalone offerings in the space. (See EMC to Buy Rainfinity and Brocade Bags NuView.) Did Acopia miss the boat? We think not. Still, it will be hard work competing against major players that opted for someone else’s technology.

What can we say about Asigra Inc.