Hyperconverged startup SimpliVity has scored $175m in a D-funding round, valuing it at a billion-plus dollars and taking total funding to, we think, $276m. So what’s got the VCs salivating?
A big pay-out, obviously, but why?
SimpliVity has developed its OmniCube, which first appeared in public view in 2012, and is "a 2U rack enclosure containing server, storage and networking hardware plus software that presents it as a virtualised data centre-in-a-box resource". It has proprietary hardware inside it.
The idea is that it is simpler to buy lots of these boxes and integrate them together than buy the traditional best-of-breed data centre componentry IT buyers are used to.
The message resonated with enterprise IT and the firm's sales grew and grew as it developed the product and its channels. Simplivity claimed a fivefold growth in sales from 2013 to 2014 and shipped 1,500 OmniCube and OmniStack licenses in 2014.
That sales growth is the main reason for the billion-plus valuation and huge boost in funding, which comes 23 months after OmniCube first became generally available; that must be some kind of record.
Waypoint Capital led the round, with prior investors Accel Partners, Charles River Ventures, DFJ Growth, Kleiner Perkins Caufield & Byers (KPCB) and Meritech Capital Partners also contributing.
Apparently, Waypoint decided to join in the investment fun after it bought SimpliVity gear for five internal data centres spread around the globe, and liked what it saw.
Its chief information and technology officer, Frederic Wohlwend, justified the investment in a canned quote: “We were convinced SimpliVity is technologically superior, and that its unique data architecture is years ahead of the market. When we learned SimpliVity was raising capital, we insisted on taking the lead.”
IDC placed SimpliVity second to market leader Nutanix in its 2014 Hyperconverged Systems Marketscape with EMC and VMware as the only mainstream suppliers present in its marketscape box.
Nutanix vs SimpliVity – let battle commence
Nutanix, similarly founded in 2008, has scored $312.6m funding, according to our figures, across six rounds, with two in 2014 bringing in $241 million.
It seems both Nutanix and SimpliVity are in a race to build out their infrastructure and channels before mainstream vendors, all piling into building VMware EVO:RAIL converged systems, can close them out of their customer bases.
EMC has announced VSPEX BLUE as its response to the success Nutanix and SimpliVity are having, and that uses EVO:RAIL and is built by EMC channel members.
SimpliVity has partnering deals with Dell and Cisco and has a presence on 50 countries via its reseller channel.
The cash will be used “to fund the rapid expansion of the company and address the explosive market opportunity. Gartner predicts total integrated system spending will grow by a 24 per cent CAGR from 2013 through 2018, reaching a total of $19bn".
Could it overtake Nutanix?
Accel Partners' Kevin Comolli thinks it's possible, and gave us this canned quote: “SimpliVity has pioneered the hyperconverged infrastructure market and will emerge as a category leader. After just 23 months shipping product, the company has achieved an unprecedented sales trajectory.”
With Scale Computing, Maxta, and Pivot3 also active startups in the market (and mainstream vendors jumping in too) 2015 is set to be a hair-raising hyperconverged systems ride.