The round was led by Kleiner Perkins Caufield & Byers with participation from original investors Lightspeed Venture Partners and individual investors including Mark Leslie, co-founder  of Veritas; John Thompson, former CEO of Symantec and Lane Bess, former CEO of Palo Alto Networks. It brings total funding to about $27 million.

The company plans to use the cash to build out its enterprise support, sales and marketing staff and to add capabilities as the software heads for general availability. That should happen in about two months, company CEO Poojan Kumar said in an interview. There are about 30 employees now, with the goal to add 70 to 80 more in the next 9 to 12 months, he said.

“Enterprise software requires staffing and expertise,” he said. He should know — Kumar led Exadata development for Oracle and then headed up data products for VMware. His co-founder Satyam Vaghani was principal engineer at VMware, where he worked on the vSphere kernel and the clustered file system.

PernixData says its software-only approach makes a disruptive technology a non-disruptive install that will run with a company’s existing server and storage hardware, take all the server flash available and virtualize it into a shareable pool. The company’s goal is to become “the VMware of server-side flash.”

As more servers ship with on-board flash, there’s a desire to make the most of that resource — especially for tier 1 applications like database and ERP applications that have proven difficult to virtualize.

San Jose-based PernixData is early to this battle but it won’t be alone for long. It’s safe to say that legacy storage  and server players — ranging from EMC and NetApp to Hewlett-Packard and Dell, as well as flash storage players like Fusion-io and Violin Systems — are scrambling for traction here.

PernixData is betting that its product — now in beta at 50 companies — will beat them to market by a good two years and build from there.

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Former Hewlett-Packard executive and Fusion-io board director Shane Robison (pictured) takes the CEO position. Robison previously was executive vice president and chief strategy and technology officer at HP. Reuters reported that Robison was involved with HP’s Autonomy and Palm deals. Flynn and White will get into investing, according to a statement.

With Flynn and White leaving, it’s possible that there was a disagreement about the company’s future direction, rather than an operational matter causing issues, according to a Credit Suisse research report:

Departure due to operational reasons or strategy disagreement? Given that both David Flynn and Rick White are founders, we think the issue may not be operational but more of a disagreement regarding the long term direction of the company. We continue to believe that Fusion-io has potential for long term growth and could be seen as a possible acquisition target for numerous large cap tech companies including NetApp, EMC, Cisco, IBM and possibly Oracle, Intel and Samsung.

Fusion-io, which announced last month that it had paid $119 million for NexGen Storage, has been in an acquisition state of mind in the past few years. It also has picked up IO Turbine and ID7.

As the company has matured since its 2005 establishment, it has become more of a known quantity in storage, with webscale customers in Apple and Facebook and original-equipment manufacturer relationships with Dell, HP and IBM.

The company is not directly selling NexGen’s hybrid-storage gear; rather, it will rely on systems integrators to do that, Flynn told me last month. That means the company won’t compete against its existing customers, such as HP and IBM. The idea is to help systems integrators compete with the likes of EMC for business from small and medium-sized businesses, Flynn said.

At the same time, through the NexGen acquisition Fusion-io got a hold of ioControl software that could help diversify Fusion-io’s software capabilities. Flynn clearly positioned the NexGen buy as a software-defined storage grab. But it wouldn’t be surprising if Flynn and White don’t want to work for a software-first company. Robison, meanwhile, seems to be eyeing the software-defined storage space for his new company. “Fusion-io has an incredible opportunity to continue to transform the software defined storage industry,” he said in the company statement.

Regardless of what happens at Fusion-io, recent commitments to flash memory on the part of EMC and IBM promise that it will continue to be a hot space. Smaller vendors such as Fusion-io, Violin Memory and Virident might want to shift and prepare for acquisitions by the bigger guys, and that might not be what Flynn and White had in mind all these years.

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In hopes of going beyond way beyond webscale computing and spurring wide enterprise adoption of flash memory, Fusion-io on Wednesday announced in a filing that it has paid around $119 million in total for NexGen Storage.

The deal includes $114 million in cash and around $5 million in stock. NexGen makes hybrid storage arrays that incorporate solid-state storage and hard disk drives, which altogether can provide up to 192TB in total storage capacity. Fusion-io has provided the flash in the NexGen gear. Going forward, rather than sell the NexGen appliances, Fusion-io CEO David Flynn said the company will “sell the NexGen technology as a platform that allows third-party integrators to build systems.” That means storage appliances will be sold under different brand names and labeled “Fusion-powered IO,” Flynn said.

Jim Bagley, senior analyst at Storage Strategies NOW, thought the purchase was a good move for Fusion-io. The market for hybrid storage arrays will see “several billion” in sales this year, compared with less than $1 billion for all-flash arrays, he said.

The NexGen buy comes at a critical time for Fusion-io. Fusion-io’s revenue in the first quarter of the year — the company’s fiscal third quarter — declined 7 percent year on year to $87.7 million. Its net loss was $20 million, compared with $4.7 million a year earlier. Take those as signs that Fusion-io needs to expand its market.

While Fusion-io can say that Apple and Facebook are big customers, it could face new challenges in widening adoption of its flash memory in the next year or two as big players move in to flash. IBM has gone off on a $1 billion flash campaign, and storage heavyweight EMC is coming out with a few new PCI-Express flash memory cards.

Fusion-io knows this. It has added to its software holdings with IO Turbine in 2011 and with ID7 just last month. With more companies coming up with options for software-defined storage, Fusion-io could follow on its NexGen buy later this year by boosting its software portfolio further. At least Fusion-io knows it needs to act.

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According to Fusion-io, the deal will leave safe the open-source distribution of SCST. On the other hand, ID7 makes its money off helping those other hardware vendors implement SCST in their commercial products, so in that sense Fusion-io just bought its way closer to the center of the software-defined storage universe.

Here’s what Fusion-io product chief Gary Orenstein had to say in a statement on Monday:

“As with other kernel contributors across the Linux stack working at Fusion-io, we will continue to support the open philosophies that have made ID7 and SCST successful. In addition to maintaining an open source version of SCST, Fusion-io will continue to contribute to the open source distribution as we develop software solutions to help define the all-flash data center.”

Software-defined storage, where storage is abstracted in much the same way as has been done with servers, is a lucrative scene right now. Just in recent months, we’ve reported on major investments for players such as SwiftStack, ScaleIO, Convergent.io, Nutanix and Jeda Networks.

The supposed benefit of the software-defined storage approach is the ability to weave shared storage pools out of standard server-attached hardware, so usage can be quickly scaled up and down as needed. ID7 has already been working with Fusion-io on its ION Data Accelerator software, which does this in an interface-agnostic fashion, and will indeed be folded into this side of Fusion-io’s business.

Again from the statement, here’s ID7 co-founder Mark Klarzynski:

“We had an opportunity to work with Fusion-io on the development of the ION Data Accelerator when it became apparent that the team has been founded on a culture of architecting software innovation deep within the Linux operating system kernel to deliver significant breakthroughs in modern storage architectures. We’re excited to join the Fusion-io team of world class engineers and developers to work together on open, software defined solutions to today’s most challenging data demands.”

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EMC’s new XtremSF PCIe cards come in a few sizes. Enterprise multi-level-cell models with 550GB and a 2.2TB capacities are now available, and 700GB and 1.4TB models will come in the second quarter of the year. More sizes will follow. Last year EMC introduced two PCIe cards — 350GB and 700GB — under the name VFCache. Those two have joined the XtremSF line alongside the four new cards, said Barry Ader, general manager of EMC’s flash business unit.

EMC and others in the data center storage market have turned nearly 180 degrees from where they were just a few years ago, when they decried in-server flash memory from such companies as Fusion-io and sang the praises of separate flash memory arrays instead. Server-side storage eliminates the bottleneck between the processor and storage in separate boxes, decreasing latency.

It’s also a reaction to a fast-growing market, with webscale companies such as Facebook spending for fast-acting server-side flash storage. Fusion-io reported a 43 percent gain in year-to-year revenue for the fourth quarter of 2012, coming in at $120.5 million, according to figures on file with U.S. Securities and Exchange Commission.

With more products coming into the flash PCIe market, prices could fall further, accelerating enterprise adoption. Then again, companies could still find a way to compete in this new market by offering different capabilities, which mean other companies would need to jump in before prices race to the bottom.

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It’s also a huge amount of money, but Skyera is riding a wave of interest in solid state storage, which is both faster and consumes less power than traditional hard drives. But Flash-based SSDs are also more expensive than hard drives on a per gigabyte basis — which has limited their use to places where companies can’t afford not to pay for faster performance.

As my colleague Barb Darrow noted in a profile on Skyera last year, the company brags that it can achieve a $3 per GB cost which is still pricier than a hard drive but less than what Fusion-io recently announced with its latest NAND flash card product. Fusion said it could achieve per GB prices of around $3.89. From Barb’s profile:

To get to cheap flash enterprise storage, Skyera uses inexpensive Multi-Level Cell (MLC) NAND flash, but found a way to do it to prolong the lifespan of the media. It is able to use high-density sub-20-nm MLC flash because its controller dynamically adjusts as the medium ages to reduce damage over time.

The funding will be used to integrate next-generation flash memory chips produced at 20 nanometers into Skyera’s product as well as boost sales.

As for Dell, which is setting itself up to be the provider of hardware for webscale and cloud vendors with its DCS division, investing in SSDs makes absolute sense, especially if there are ways it can integrate Skyera’s technology more deeply in its gear. For Skyera, having Dell as an investor might help it build out a lucrative sales channel.

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There’s certainly plenty of demand for the services. In 2009, CIO reported that more than 40 million Americans had tried online dating. In September 2012, 1 in 10 internet users frequented an online dating site, according to a December 2012 report from comScore.

Sites vary as to the times of year when traffic peaks. The number of unique visitors to eHarmony.com increases 45 percent on Valentine’s Day, and the boost continues until the end of the month, a spokeswoman wrote in an email.

The biggest day of the year for Match.com registrations isn’t Feb. 14; it’s actually Jan. 2. “Then we get another big spike after the Valentine’s Day holiday, so this weekend will be another spike,” a spokeswoman said. And for Zoosk.com, the peak comes on Dec. 26, while traffic is consistently heaviest in January.

How do engineers accommodate all the traffic and not sacrifice performance?

For eHarmony, it was a matter of scaling out infrastructure. “The systems over the years have been expanded to absorb large spikes to all the main areas and events on the site, such as posting photos, communication requests and the interactions with the mobile apps,” the company spokeswoman wrote.

Computerworld reported in 2009 that eHarmony had 4 terabytes of user information in storage for 20 million users. That comes from responses to the site’s Relationship Questionnaire. The spokeswoman did not immediately have current figures available.

Match.com was storing 70 terabytes of user data for more than 1 million subscribers when Microsoft published a case study on the dating service last March. Until May 2010, Match.com was updating user information on 110 Microsoft SQL Server servers across two data centers in the United States. In order to keep profile updates timely — less than two seconds — the company began distributing the updates across the servers, rather than update the entire dataset at once.

Valentine’s Day isn’t necessarily the high point of the year for Facebook. Jay Parikh, Facebook’s vice president of infrastructure engineering, cited Halloween as one of the highest times of year for photo uploading, as my colleague Stacey Higginbotham reported. When Facebook demand spikes, servers stocked with flash memory in the data center instead of hard disk drives and tapes ensure consistently high performance with a wide variety of data — and there’s plenty of room for storage, too. Facebook’s flash-only database servers, codenamed Dragonstone, feature 3.2 terabyte flash memory cards from Fusion-io. Flash memory might come in handy at dating sites’ data centers, too — the Dragonstone flash memory became part of the Open Compute Project last month.

Feature image courtesy of Shutterstock user 3Dstock.

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Several of the investors have returned from an earlier $35 million round that the nine-year-old business had raised when it was pursuing a slightly different business, one that also relied on boosting the performance of memory in the data center. Riccardo Badalone, a co-founder and CEO of Diablo, said the company wouldn’t get too specific about its plans, but he did say that it is working on a silicon product that will marry the processor and flash memory to help boost performance. This is yet another evolution in bringing the memory and processing power closer together to speed up applications. Fusion-io does this, only its business was built on putting the memory on the PCI express card.

Badalone says he can bring it closer. That would help get more data to the processor and in turn let the processor take on more information. And in today’s web-based business or cloud environments, the more your processors run, the more money you make. That sentiment is why flash memory and ways to increase its performance are rapidly gaining interest –and why Fusion-io has done so well.

Diablo is borrowing a tactic from Fusion-io in that it is working with equipment makers to put its technology — called Memory Channel Storage — inside servers. Its previous product was qualified on Dell, HP and IBM systems, which is one reason that investors ponied up for the latest round even as Diablo was switching strategies. Badalone anticipates using similar partnerships with its chip technology, although he declined to name any of those potential partners or existing customers.

The company has 40 employees and plans to grow to 50 or 60 in the coming year, and Badalone is optimistic about the performance of the systems when it eventually hits the market in 2013. “We will be the first company in the world to marry RAM and Flash in the memory subsystem and once you do that the performance of the I/O will be such that people will lok at the numbers, and frankly, they will not believe it,” Badalone said.

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This is just the latest push by storage makers to reach out beyond their own islands of data center hardware to manage and administer third party products in a more holistic fashion.

The goal of this deal is to speed up application performance by converting server flash into “hot” data storage for important applications.

Flash Accel is part of NetApp’s Virtual Storage Tiering effort. A few weeks ago, NetApp announced a partnership with Fusion-io, the hot selling server cache company, and this is the first tangible detail to emerge from that relationship. NetApp will demonstrate Flash Accel next week at VMworld 2012 in San Francisco.

No doubt there is a flash feeding frenzy going on. In the last week alone Nimbus Data unveiled its new Gemini flash storage array; stealthy startup Skyera talked up its plans to bring flash storage costs down to a promised $3 per GB; IBM said it was buying flash pioneer Texas Memory Systems and  Pure Storage disclosed $40 million in brand new venture capital to fund its flash onslaught.

Both NetApp and arch-rival EMC, which bought flash player EXtremeIO earlier this year, are coming to terms with flash storage, which is faster but more expensive than hard drives. In that vein, look for more deals to come.

Feature photo courtesy of  Flicker user zmmrc

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Here’s how the company explains the technology in the press release announcing it:

The Extended Memory subsystem dynamically moves frequently accessed data pages into memory on-demand while transparently migrating rarely accessed data pages from DRAM into ioMemory. This allows developers to simplify application design by assuming that entire datasets are in-memory, without the costs associated with DRAM purchase and operation. Application developers are able to further tune performance through software development kit tools that lock selected pages into DRAM, giving access to NAND flash as memory, instead of treating it as an extension of disk storage.

Fusion-io was able to pull this off in part because of an industry trend toward higher-capacity, less-expensive flash storage and in part because Fusion-io doesn’t claim to offer solid-state drives. When I covered the release of the company’s ioDrive2 and ioDrive Duo2 (which plug into a server’s PCI slot and operate as repositories for data needing high performance) in October, the products represented a more than 2x capacity gain over the previous generation and continued to boost IOPS performance, despite the smaller and cheaper NAND technologies on which they’re built.

Fusion-io Founder and CEO David Flynn attributed his company’s ability to continually raise performance on new, consumer-driven NAND designs with its decision to to provide memory controller software rather than trying to act like a hard-disk drive (as other solid-state drive providers try to do) and use a microcontroller. That same decision, the company says, also helped make Extended Memory possible because it didn’t have to try and make disk-storage protocols function at the memory tier.

In-memory databases and analytic systems (such as SAP’s high-performance HANA appliance) are nothing new, but they’re limited in size to the system’s memory footprint and can be rather expensive. All-flash storage arrays are also becoming much more popular and getting less expensive, but they still exist as a separate storage tier and are often aimed at legacy enterprise applications. If what Fusion-io and Princeton have created works as promised, it could create a middle ground approach that resonates with customers — such as Fusion-io mega-user Facebook — that need a workable combination of massive scalability and high performance.

Image courtesy of Shutterstock user Mark Schwettmann.

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