Why We Partnered with ClearSky Data

By Dave Barrett on November 3, 2015

We’re stoked to announce our new investment partnership with ClearSky Data.

We’re leading an investment round of $27M, joined by strategic investment partner Akamai Technologies, alongside existing investors General Catalyst and Highland Capital.

I spend most of my time partnering with and looking at companies focused on the Cloud: SaaS Applications, Cloud Infrastructure and Data Science.

So I can tell you that we’ve entered Generation 2 of the Cloud. And with it, the next generation of enterprise infrastructure.

Hybrid Cloud architectures enable previously hard-to-solve challenges to be solvable.

They enable the leverage of the economy, scalability and agility of public clouds with opportunities to address the performance, resiliency and security limitations. Limitations which have held back The Public Cloud as true enterprise-grade foundational infrastructure.

ClearSky Data is a company that exploits Hybrid Cloud possibilities to solve a huge customer problem.

That big problem has resulted in a huge addressable market.

A front-burner challenge for enterprises large and small: Reducing the costs — and increasing the agility of primary storage.

The Solution:

ClearSky is building a global storage network. It’s a managed service delivery model for enterprise storage, combining the performance and availability of primary storage with the economics and scalability of the cloud.

Their’s is an innovative approach to primary storage which will help enterprises become more agile and take full advantage of hybrid cloud adoption.

To the point, ClearSky’s cloud-based global network frees customers from legacy storage systems that are expensive, complex to manage, and rigid.

ClearSky solves three major problems for IT of enterprises large and small:

Data footprints are huge and keep growing.
Businesses crave agility but today’s storage can’t deliver it.
The cloud is an incredible storage resource, but latency gets in the way.

These problems cause enterprise IT to spend a ton of time and money to manage their data. They over-provision storage to play it safe. They pay for excess capacity and performance that never gets fully utilized. They incur hard-to-plan-for people costs to manage complex, heterogeneous data storage pools that must be continually upgraded and expanded.

“Hot” data is mission-critical data that a business runs on in real-time and accesses on a daily basis — which represents only about 5-10% of typical workloads. It needs to be kept close at hand for ready use.

But enterprises keep lots of “cold” data in traditional storage arrays, in order to play it safe and ensure against performance and latency issues. Very expensive. Very inefficient.

ClearSky alleviates storage cost & complexities — reducing the data center footprint required for traditional storage.

The company has the potential to completely transform the storage market dynamic.

People and budgets previously focused on buying and managing primary storage now have the ability to leverage the cloud for an agile, on-demand, secure storage model.

The Significance:

The major technology challenge of the last generation of enterprise infrastructure was how to deliver content on demand. In the first generation of the web, our portfolio company Akamai, solved the content delivery bottleneck problem. In this 2nd Generation of the Cloud, and the current generation of the enterprise, storage is the current bottleneck.

Storage is the bottleneck for the contemporary enterprise. The basic model for storing data hasn’t changed in decades. In today’s business environment, the costs, complexity and rigidity of this legacy model (and the need to update storage capacity every 18 to 36 months) are intolerable.

In today’s enterprise, workloads can be hosted anywhere –- on-premise, in public and private clouds or in software-as-a-service (SaaS) environments. And data needs the ability to move quickly between locations.

Storage needs to evolve to meet this need.

Cloud gateways can’t address the performance, latency, security & availability requirements of enterprise production workloads. They deliver a front-end cache that connects to the cloud over the internet. Their architectures make it impossible to achieve the high level of requirements that enterprises demand.

ClearSky provides this needed level of performance through its use of PoPs, its global high-speed network, and its Smart Tiered Caching™ technology.

ClearSky is the only company offering an enterprise-grade alternative to legacy storage.

It can be the answer to the enterprise data mobility problem. A managed service for storage.

The Timing:

Now is the right time for a solution like this to enter the enterprise storage landscape. The service’s delivery model, particularly its metro-based PoPs, gives ClearSky the opportunity to alleviate chronic storage headaches in a more immediate way than any other company has attempted to this point.

Great idea. Why hasn’t someone else done this before, you might ask?

It’s really hard to do. There’s a ton of storage chops, hybrid cloud architectural chops and algorithm magic working to make this happen.

Traditional, legacy storage vendor are not likely to be interested in anything near this approach anytime soon.

It’s an anathema to their hardware-based technology and core business models.

This is a unique time in the storage industry where the large players are merging, going private, shutting down business units and struggling to respond to the huge market forces. It’s a great time for a startup like ClearSky to offer a breakthrough solution to a long-standing set of infrastructure challenges.

The Technology:

ClearSky software helps to cache data into hot, warm and cold layers. It’s algorithms manage each piece of data with information about it, including the performance it demands.

It puts cold data in the public cloud. Hot data on premise. Warm data in metro PoPs which enable on-prem performance & resiliency without the costs.

It provides customers with more management and storage for less money. It acts like a local storage array in terms of performance and availability, but leverages the scalability and economics of the cloud.

This is web-delivered software. No hardware or software installs or updates needed. A dashboard enables views of capacity, availability, performance & latency. Account, customer service & billing information are also viewed. SLAs guarantee high performance, end-to-end security and high availability.

Security is enterprise-grade. Encryption, key management technologies and policies ensure compliance with industry and government standards. Multiple mechanisms and layers ensure integrity and separations of customer data in transit an at rest. It closely monitors and protects three distinct data domains — customer data, metadata (indexing and describing that customer data) configuration/management data.

An on-demand network. Think SaaS for storage.

The People:

CEO and Co-founder Ellen Rubin is one of those people I’ve wanted to work with for years. I’ve followed her career from her Netezza days, where she created market acceptance of a new technology category; the data warehouse appliance. She led market strategy, product marketing, complementary technology relationships and marketing communications through their IPO, which led to their eventual acquisition by IBM for $1.8B. She then co-founded and did much the same for cloud enablement company Cloudswitch, through their acquisition by Verizon, where she was responsible for strategy & roadmap for all cloud offerings. A great track record in leading strategy, market positioning and go-to-market for companies in hyper-growth mode.

CTO & Co-founder Lazarus Vekiarides is another one of those people. I’ve heard my good friend Don Bulens rave about Laz’s contributions to Equallogic, which was acquired by Dell for $1.4B. He’s spent 20 years in technical and leadership roles — also with companies like 3Com & Bayan Systems — delivering transcendent technologies to market. After Equallogic’s acquisition, he was executive director of software engineering for Dell’s Storage Engineering group.

Behind them is a team full of rock star architects, developers and company-builders. Supported by a Board which includes Jit Saxena (Founder of Netezza), Paula Long (co-Founder of Equallogic), as well as David Orfao (General Catalyst) and Sean Dalton (Highland Capital.

Having Akamai (Andy Champagne – VP Product & Technology for their Enterprise Cloud Group) will be great help as well, as they share our collective belief that ClearSky’s has the right model to disrupt the enterprise storage industry, and will partner with us to meet global customer needs.

Nobody else has created an architecture that approaches ClearSky’s global storage network.

The team’s competition is the status quo. Expensive, complex, multi-vendor, multi-architectured storage pools with legacy hardware-based architectures which have to be constantly maintained, upgraded and expanded.

Incredibly expensive TCO solutions. Solutions of from traditional storage arrays . From companies like Dell/EMC, NetApp and Hitachi.

This market is being completely transformed by the cloud and by new service models.

We’re now in the 2nd Generation of the Cloud.

The next generation of enterprise infrastructure.

And perhaps the next generation of data management and storage.

This post originally appeared at I Know You Know on November 2, 2015.