Incipient, an 80-person (60-engineer) firm based in Waltham, Mass., will use the money to deliver its product to customers. Since Incipient’s software is designed to work with intelligent storage switches, those customers include storage switchmakers and their allies — period. “We have no direct sales model,” says spokesman Robert Infantino.
Several OEMs are reportedly lined up for Incipient’s product, but Infantino won’t reveal their names. Still, the company previously announced a relationship with Brocade Communications Systems Inc. (Nasdaq: BRCD – message board), and chipmaker Aarohi Inc. has named Incipient as a partner (see Incipient Demos Fabric-Based Storage and StorageTek Plans Virtualization Device).
Industry sources also say Storage Technology Corp. (StorageTek) (NYSE: STK – message board) may be considering Incipient’s software for use in a device aimed to compete with the storage router announced by EMC Corp. (NYSE: EMC – message board). (See StorageTek Plans Virtualization Device.)
Much is still uncertain. Infantino acknowledges that Incipient hasn’t shipped its product, and will say only “sometime this year” when pressed for a date.
One thing seems certain, though: As a supplier of virtualization software to the likes of Brocade, Incipient’s future will likely be tumultuous. The late-stage startup’s already competing with the likes of EMC, FalconStor Software Inc. (Nasdaq: FALC – message board), Hewlett-Packard Co. (NYSE: HPQ – message board), IBM Corp. (NYSE: IBM – message board), and Veritas Software Corp. (Nasdaq: VRTS – message board) in storage virtualization technology. And its name routinely comes up in arguments about where virtualization will reside and how it will run (see Startups Abuzz Over Intelligence, EMC & IBM in Virtual Skirmish, and Report: Switch Is Best for Virtualization).
Its reliance on switchmakers will likely make Incipient an acquisition target at some point. There have already been whispers of interest from Cisco Systems Inc. (Nasdaq: CSCO – message board). (See Cisco Eyes SAN Startups.)
Infantino won’t be drawn into speculation for or against the possibility. “The focus of the company is to bring product to market. Let’s leave it at that,” he says. But he maintains the latest round is the last Incipient will seek. The company plans for profitability sometime in 2006.
With the funding, Incipient is adding a fifth VC, Charley Lax from Grandbanks Capital, to its six-member board. The other seats are taken by representatives from Globespan Capital Partners, Greylock, and Sigma Partners, which also invested in this round. The sixth board seat is occupied by CEO Ric Calvillo.
Notably, Incipient is the latest in a string of privately held companies to get funding this year. Indeed, the addition of this round brings the total awarded to storage companies since January 1 to a whopping $98 million (see Startups Score in Funding Uptick, Revivio Revs Up With $25M, and Software Players Get Sales Ammo).
Some perspective: January’s not over, and storage networking companies have already garnered 43 percent of the $225.8 million attributed to the segment for the entire first half of 2004, according to Ernst & Young and VentureOne.
