Nasuni aims cloud NAS at remote work, battles NetApp, Isilon

Unlike cloud NAS rival Panzura, Nasuni execs say they have their sights set on going public rather than getting acquired; count on remote work improvements, funding for growth.

In the wake of an old rival's acquisition by a private equity firm, cloud NAS vendor Nasuni today upgraded its platform for remote workers and secured $40 million in funding.

Nasuni UniFS 8.8 upgraded ransomware protection, increased monitoring and public cloud support for remote work, and improved the performance and scale of file migration.

Nasuni also raised $25 million in equity financing and secured a $15 million credit facility from Silicon Valley Bank to fund acquisitions and other strategic projects.

The product upgrade and funding follows the May acquisition of Panzura, which sprung up the same time as Nasuni around a decade ago. At the start, Nasuni and Panzura sold cloud gateways allowing organizations to move files to public cloud object storage -- mainly for file sharing and collaboration. Both vendors' cloud NAS products evolved over the years. Now they face increased competition from major data center storage vendors that can run their file systems in public clouds and public cloud vendors that sell on-premises storage.

Nasuni founder and CTO Andres Rodriguez said Nasuni's advantage is it was designed for the cloud, while competitors either tier on-premises data to the cloud (Qumulo, Cohesity, Rubrik), lift and shift on-premises files to the cloud (Dell EMC Isilon, NetApp) or are single-cloud providers without sophisticated file-sharing capabilities (AWS, Azure).

Nasuni founder Andres RodriguezAndres Rodriguez

"This battle will be fought and won in the cloud," Rodriguez said. "We can run our file system natively in cloud object storage."

Nasuni's cloud-based file system lets organizations manage files across clouds with a single namespace. Nasuni's file system runs in AWS or Azure. Its on-premises and edge appliances cache unstructured data and move less frequently accessed files to public cloud object storage. The vendor claims more than 500 customers. Nasuni's SaaS subscriptions are based on useable capacity, with most data stored on AWS or Microsoft Azure.

Upgrades to UniFS 8.8 address issues that can help organizations deal with the COVID-19 pandemic, particularly their remote workers. Nasuni added continuous file versioning to help protect against ransomware. Instead of having to recover good files from backup following a ransomware attack, Nasuni allows users to roll back immediately from snapshots to the last good version, wherever it resides.

Nasuni also added Cloud File Services for Microsoft Windows Virtual Desktop, and support for Azure Ultra Disk and Premium SSD tiers for higher performance for file storage on Azure. Nasuni also now supports AWS Snowball Edge devices and faster migration to public clouds. Nasuni claims it now can move 100 TB of file data to the cloud within 30 days.

Looks for different exit path than Panzura

Profile Capital Management did not disclose its purchase price for cloud NAS rival Panzura, but two sources familiar with the deal described it as a "fire sale." Nasuni executives say they are not looking to get acquired. Instead, they intend to go public in late 2021 or early 2022. Nasuni has raised $169 million in funding, including $100 million since 2017, but Rodriguez said the vendor has barely tapped into the $25 million it raised in February 2019.

He said previous and new investors ponied up now because COVID-19 has spurred cloud storage adoption, and Nasuni took the funding partly in case COVID-19 has a negative impact on future funding. According to Crunchbase, the $29.8 billion in known investments to North American startups in the second quarter declined 18% from last year and 12% from the first quarter of 2020.

The new funding comes from new investors Family Offices, Venture Capital and Corporate Venture, along with previous investors, including Goldman Sachs, Telstra Ventures and North Bridge Venture Partners.

Nasuni also recently added two longtime storage executives to its board -- former Veeam co-CEO Peter McKay and former NetApp product executive Joel Reich.

Growth challenges

But can Nasuni thrive in the face of intense competition? To become a public company, it will have to grow by fighting off traditional NAS storage giants.

Amita Potnis, a research director at IDC, said the "bidirectional movement" of on-premises vendors into cloud and public cloud vendors into file storage presents a challenge for Nasuni. But she said Nasuni's strong partnerships with AWS and Azure help, as does its early move from a gateway to file system platform.

"I would say Nasuni is well-positioned against the other competitors they went up against for a long time, mainly Panzura and Ctera," she said. "They pivoted earlier from a cloud gateway to global file system for the public cloud, and had a good vision for where they wanted to take the product.

Now Nasuni will have to stay on top by adding more innovation -- richer reporting and auditing, for example. That will be important.
Amita PotnisResearch director, IDC

"Now Nasuni will have to stay on top by adding more innovation -- richer reporting and auditing, for example. That will be important because the on-prem storage providers have bigger mindshare and market share and will catch up."

Marc Staimer, president of Dragon Slayer Consulting, said the vendor has yet to "turn the corner" to profitability after 11 years.

He does give Nasuni credit for adding extra layers of ransomware defense in its new release and continuing to evolve, though.

"Nasuni's not cash-flow positive, but it's showing growth," Staimer said. "They've been around longer than [public flash storage vendor] Pure Storage. Nasuni started as a gateway and morphed into a storage services company.

"Protection of files for ransomware has value," Staimer added. "You keep past versions, if data gets encrypted, you have a version you can go to. It doesn't protect against attack loops or admin privileges being changed, but the more layers of defense you have, the more difficult it is for ransomware to target you."

Rodriguez said Nasuni changed over the years to evolve with the way customers used the cloud.

"When we started, the challenge was not a lot of people were ready to use public cloud storage," he said. "So, we had to find use cases that were so painful and demanding that people would make the shift. But now it's a different market and everyone is going to the cloud. So, we were in collaboration for a while, and now we're general-purpose NAS. And people have finally come to their senses and are sending their entire infrastructure stack into the public cloud."

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