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NeoScale Systems demonstrated the promise of the up-and-coming storage security space by nabbing $12 million in second round equity funding.
The round was led by Sevin Rosen Funds, with “strong participation” from current investors, NeoScale said. It brings the company’s total financing to $25.5 million. With venture capital often comes corporate change, and concurrent with its funding announcement, NeoScale also confirmed the appointment of former Nishan Systems CEO John McGraw as NeoScale’s new president, CEO, and chairman. Aseem Vaid, NeoScale’s co-founder and previous CEO, now holds the title of CTO.
“This funding demonstrates the growing significance of storage security as a market segment,” states Jamie Gruener, senior analyst for the Yankee Group. “Storage, security, and business continuity continue to be top of mind for many enterprises’ spending priorities in 2003. Networked storage, storage consolidation, managed services, tape media, and remote storage have data access threats not fully addressed by the industry, prompting enterprises to consider ways to implement storage-centric security on an application by application basis. This is conducive to an appliance approach provided by NeoScale today — shipping dedicated storage security products for both protecting network storage and backup media.”
Nancy Marrone, senior analyst at Enterprise Storage Group, says of storage security firms like NeoScale and Decru, “I like the space. All of the security methods in place today address access to data and encryption in transit, but none address the issue of data at rest being vulnerable. The new storage security appliances encrypt the data so that when it is at rest — on a disk or tape — it cannot be compromised. It’s not too hard to walk away with a disk drive. By encrypting the data to this level, companies can be assured their data is truly secure.”
McGraw brings to the job more than 25 years of senior executive management experience in Silicon Valley. He was CEO and remains on the board at IP storage networking firm Nishan Systems, and was also president and CEO of LightLogic Corp., an optical component manufacturer acquired by Intel in 2001. McGraw was also a senior vice president and general manager of the Electronics Group of Raychem Corp. He has a BS and MS in Mechanical Engineering from Cornell University and an MBA from the MIT Sloan School of Business.
“NeoScale’s business addresses the two most important technology considerations for IT managers today — extending and protecting storage resources and information,” McGraw said. “I look forward to helping NeoScale capture this tremendous opportunity.”
NeoScale was founded in June 2000. The company’s CryptoStor wire-speed, policy-based storage security appliances deliver network storage and media privacy. The company says its solutions “lower the cost of protecting highly accessible, distributed storage infrastructures while also enabling greater efficiencies for the management of storage capacity, consolidation, continuity, and availability.”
Pricing starts at $35,000 for the CryptoStor FC appliance and $15,000 for its CryptoStor for Tape solution.
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