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Update: Nimble has been remarkably successful since it began shipping its hybrid flash-plus-hard-drive gear two years ago. The company, which focuses on small and mid-size enterprises, has amassed more than 1,100 deployments across more than 600 customers and hopes to be bringing in quarterly revenue between $25 million and $35 million relatively soon, Vasudevan said during a recent interview. It comes up against large vendors such as NetApp, Dell and EMC about 85 percent of the time, he added, and it typically wins those deals.

Flash storage is a white-hot market right now because of the significant performance and efficiency improvements it provides over hard drives — important considerations in a world where virtualization reigns supreme — and because the gap in price between the two is closing fast. In the past several months, EMC paid $430 million for all-flash startup XtremIO, while Violin Memory ($80 million) and Pure Storage ($40 million) have both brought in hefty investments. Nutanix and Tintri, both of which, like Nimble, fuse flash and hard drives and target mid-market businesses, recently raised $33 million and $25 million, respectively.

Putting both flash drives and hard disks in the same array means customers can save money on bulk storage while still getting the flash performance boost where it’s needed. As I explained when covering Nimble’s previous funding round in July 2011, customers seem to love the flexibility of its appliances. They can change the ratio of flash to hard to disk capacity to suit their needs, and some customers even use a single Nimble appliance for both primary storage and backup (with hot data in flash and backup data on the spinning disks).

Nimble is eyeing late 2013 or or 2014 for its IPO, Vasudevan said, although it raised its final funding six to nine months before it planned to because outside firms kept approaching it with aggressive and attractive term sheets. In the end, Nimble took money from all of its existing investors as well as newcomer GGV Capital. Vasudevan said the new investment will help fuel international expansion as well as a planned surge in headcount over the next 18 months.

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We wrote about Tintri last summer as the storage system behind gaming startup Digital Chocolate. Essentially, each appliance contains up to 13.5TB of usable capacity and boosts performance of virtualized environments because the storage software is designed from the ground up for virtualization. The idea is that it’s easier for storage administrators because they can track performance at the virtual-machine level — just like with their virtualization-management software — rather than by trying to negotiate the traverse between VMs on one side and LUNs, files and other traditional storage-system divisions on the other side.

Flash storage is becoming increasingly appealing appealing for virtualized applications such as databases that need higher throughput than hard disks can comfortably handle. Rather than providing brute performance with an all-flash array, though, Tintri claims its specialized software lets it make maximum use of a relatively small flash tier (only 2.4TB of raw capacity on its high-end appliance compared with 24TB of hard disk capacity) while still keeping prices low.

Tintri has raised $60 million thus far. Menlo Ventures led this round and was joined by existing investors NEA and Lightspeed Venture Partners.

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I recently happened upon Apple’s classic “1984” commercial . It had been years since I’d last seen the ad, but I was struck by its symbolism and timelessness all the same.

The ad, which features a runner heaving a hammer into a giant monitor on which a Big Brother-like figure is speaking ominously to a room full of drone-like workers, signifies a classic case of technological disruption. Apple, playing the disruptor, was introducing the Macintosh and personal computing to the market and forever changing the face of computing in the process.

Since the commercial aired, computing technology has evolved at an astronomical rate. Personal computing spurred the rise of network computing, which in turn has spurred the rise of modern technologies like virtualization and cloud computing.

While the computing side of history is well known, the storage side remains hidden from common view, like the bulk of an iceberg. It’s interesting to look at the state of storage today and compare it with the radically different environment that existed back in 1984, during the rise of the personal computer.

NFS: The dawn of the modern (storage) era

Storage as it is known today did not even come into being until the mid-1980s, when Sun Microsystems introduced the Network File System (NFS) protocol. Before NFS, servers simply consisted of direct-attached disks that connected to a general-purpose computer.

NFS was a huge step that both enabled and accelerated network computing. While it was initially met with a healthy dose of skepticism, NFS quickly gained traction in the enterprise. As it became increasingly clear that computers needed to actively share information and interact with each other, networked file systems became a central tenet of storage.

Just like that, the next generation of storage architecture was born.

During this time, I was a Ph.D. student in the computer science department at UC Berkeley, working with a talented team to perfect RAID, which is the basis of today’s multi-billion dollar storage industry. Vendors offering purpose-built systems for managing storage based on RAID technology — notably EMC and NetApp —grew rapidly. As enterprises embraced network computing, purpose-built storage systems based on RAID were quickly recognized as necessities, rather than niche products.

Virtualization demands more than general-purpose storage can offer

Twenty years later, we are in the midst of the single most significant evolution in IT since the rise of network computing: the rise of virtualized computing. While virtualization offers unprecedented benefits to the server side, including server consolidation, agility, flexibility and manageability, the full-scale adoption of virtualization has been stalled by the complexity and cost of storage. Today, storage is the single most complex and expensive component in the virtualized data center. As Tintri CEO Kieran Harty noted in a recent blog post, storage can account for up to 60 percent of the cost of virtualization deployments.

In fact, it is becoming increasingly clear that general-purpose storage is not sufficient for supporting broad virtual deployments due to fundamental limitations in its architecture. Because general-purpose storage must support a wide range of workloads, it is inefficient and difficult to configure and manage for virtualized environments. With these systems, it is difficult to see what is happening at the level of individual VMs, and you cannot perform storage management operations at the level of VMs. General-purpose systems are difficult to automate for use with virtualized environments.

Moreover, existing general-purpose storage systems were designed before the advent of new technologies such as flash-based SSDs, multicore CPUs, and 10 Gigabit Ethernet. Although most provide support for such technologies, their legacy architectures cannot take full advantage of them.

Storage is about to be disrupted

This has created a disruptive opportunity in the storage field that hasn’t been seen in over two decades. It’s not a surprise that there’s been such a flurry of venture-backed startups entering the market over the past year. Entrepreneurs — many of them coming from established tech giants — are capitalizing on technologies like flash to introduce more efficient storage solutions for today’s data center.

In the virtualized data centers 20 years from today, all aspects of computing will be virtualized, including servers, networks and storage. Virtual machines will be freed from the constraints of the underlying physical resources and will run with the same level of functionality and service, wherever it is most efficient. Full virtualization will be achieved, not only by an accumulation of new features, but by designing an architecture that eliminates everything that cannot be efficiently virtualized. Just as network computing spurred the need for an entirely new storage architecture, so too has virtualization.

Ed Lee is lead architect at Tintri, Inc., which has developed a storage system for virtual machines. Prior to Tintri, Ed was principal systems architect at Data Domain.

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With its Complete Cluster, Nutanix is trying to revolutionize enterprise storage by eliminating the SAN and placing both computing and storage on the same node. Nutanix has referred to this as a Google-like infrastructure for mid-size companies, at least in the respect that it collapses the traditional three-tier application architecture into a single appliance. The 2U cluster, which targets virtualization workloads, includes four nodes consisting of 8 6-core Intel processors, up to 768GB RAM, 1TB of Fusion-io solid-state storage, and a combined 35TB of hard drive capacity.

The converged architecture represents a pretty big change of direction for many IT departments, but storage — historically and presently — has been an area where mid-size companies are willing to embrace disruptive technologies. That’s because, Pandey said, mid-market companies have respectable IT budgets but are “chronically understaffed,” so they just want technologies that get the job done and they’re willing to pay for simplicity. Mid-size companies don’t have any religion when it comes to vendors or particular architectures, he added.

They’re also struggling with a higher percentage of virtualized workloads, which can lead to significant performance overhead within storage systems. Trying to do take advantage of virtualization to do dynamic orchestration and other cloud computing-like tasks adds an even greater burden on legacy infrastructure that was designed to run physical workloads. Flash storage and management software designed with virtualization in mind can help alleviate some of these woes.

Pandey points to iSCSI as one example of mid-market companies bucking the industry trend (toward Fibre Channel) and choosing the option that worked best for them. Lately, one might also look at the success of flash-based storage startups such as Nimble Storage, Nimbus Data Systems and Tintri. All these companies are having considerable success selling appliances that disrupt traditional storage notions by replacing spinning disks with solid-state drives and targeting virtual workloads, and they’re selling to mid-size enterprises.

Of course, Pandey thinks Nutanix has an advantage over companies selling storage appliances only because it doesn’t have to sell to storage administrators who will always be comparing new technologies against NetApp and other legacy vendors’ technologies. He says Nutanix is selling to higher-level IT folks who are looking for the best overall infrastructures on which to run their cloud and virtualized workloads. With Nutanix, the storage component is just a part of the greater appliance that includes VMware software and computing hardware.

Ultimately, though, whatever the form factor, it’s the price-performance ratio that’s driving adoption of these new architectures. Converged infrastructure is nothing new, but Nutanix’s $75,000 entry point is a far cry from the list price for a VCE Vblock, for example. Nimbus Data Systems and Nimble Storage also claim their flash-based appliances provide better performance than hard-disk-based systems while competing very strongly on price.

There is a great deal of business to be done outside the Fortune 500, and if Nutanix, Nimbus and others trying to revolutionize storage infrastructure can keep convincing customers that their products deliver more bang for the buck, we could be witnessing the beginning of a storage revolution that results is spinning disks and SANs becoming things of the past for many companies.

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