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Coraid grabs CEO, $10 million in funding

Coraid, which has stayed mostly under the radar with its ATA over Ethernet (AoE) storage systems, is looking to make some noise this year.

Coraid today named a new CEO and said it closed a $10 million A funding round. An “A” round means it’s the vendor’s first VC funding, even though it has been around since 2000.

The CEO is Kevin Brown, who was CEO of desktop virtualization startup Kidaro until Microsoft acquired it last year. He also ran marketing for storage encryption appliance vendor Decru before NetApp bought it in 2005, and then spent time as VP of NetApp’s security business unit.

The new backers are Azure Capital Partners and Allegis Capital, and Coraid has added former Cisco honcho Charlie Giancarlo and Veritas founder Mark Leslie to its advisory board and they have also invested in the company.

That’s an impressive haul of money and talent for a company that has been so quiet that its new CEO says, “Despite having been in storage industry for some time, I hadn’t come across Coraid until recently.” Apparently, Brown doesn’t read SearchStorage enough or he would know at least this or this about his new employer.

What he does know about Coraid is its Etherdrive AoE systems don’t use the TCP/IP Ethernet protocol, which he claims gives it a performance advantage over iSCSI. He says Coraid has more than 1,100 customers and its systems cost about $500 per terabyte running with Gigabit Ethernet and $900 per terabyte with 10-Gigabit Ethernet.

Brown said when he did take a good look, “I saw Coraid from a disruptive perspective, and was impressed what they did with organic growth.”

Coraid lists NASA, Dunkin’ Donuts, the U.S. Navy, National Institutes of Health, and several large universities as customers. Not bad, for a vendor that has had one sales person until now. With the funding, Coraid is looking to build its sales, support, and development teams.

Brown positions Coraid as a low-cost alternative to iSCSI, which has made inroads as the low-cost alternative to Fibre Channel. He says Coraid is cheaper than iSCSI because AoE doesn’t require TCP/IP offload engine (TOE) cards. The problem with that claim, though, is that most iSCSI systems work with software initiators that also remove the need for TOE cards.

iSCSI systems also have more mature data protection and management software, while Coraid relies mainly on virtual servers and third-party applications for those features. Brown says higher-end Coraid units are coming, and points out Etherdrive already supports SAS and solid state drives (SSDs). While Coraid isn’t looking to taking over the enterprise, its new CEO says there are plenty of organizations seeking low-cost quality storage.

“We’re not going to attack every environment,” he said. “We’re not going to do a rip and replace on an investment banking company using SRDF. But there are a lot of new opportunities out there for us.”

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