OpenIO Raises Finally $5 Million

OpenIO SAS, the late comer open source object storage player, from France, just raised $5 million from Elaia Partners, Partech Ventures, and Nord France Amorçage SASU.

This is just incredible confirming that investors have some difficulties to understand the storage market climate associated with this segment, players presence and trends.

The company started very late, probably too late, especially as it exists many vendors, probably too many, and above all it’s not a market.

The revenue is of course ridiculous and the raising campaign was an answer of a dead end in a few months. The number of customers is also very limited and the pricing model on top of open source generates very small figures.

There is no IP and no patent, one key criteria for investors.

The product has several limitations, just to name a few:

• The architecture is pretty fragile
• Erasure coding is very young and not optimized coming from a public module
• Access methods are pretty weak with too many layers showing latencies and limitations performance. Sorry it’s not a performance play just a basic capacity one, and
• Lack of data services

The company represents a real business risk for a prospect with a real question about its future presence. The management team is also very junior with lack of vision and difficulties to execute with very frequent changes.

Others information are the market climate with an obvious saturation with already too many object storage players – more than 20 -. Some commercial companies already died such as Coho Data and Formation Data Systems, pretty well founded by top VCs and respected management, one open source projects disappeared as well Skylable, several commercial companies have difficulties and at least three other open source projects lead that wave.

This open source object storage group is represented by three projects: Ceph, Swift promoted by OpenStack and SwiftStack (potentially others) and Minio and eventually Gluster. But all these stories are completely different, the management and the founders are people with real track records, past successful exits (for Inktank and Gluster and even SwiftStack management), real enterprise DNA and significant market traction.

For open source, building a community is a key factor of success and how a vendor is able to transform a use to a revenue stream with an interesting conversion ratio. Here, the community is a dream and open source storage models like Gluster, Ceph, Swift or Minio are super far.

The other dimension is the difficulty for many open source companies to find the second wave and raise a new round even with a large active community. This is what happened to Gluster and Inktank, meaning that no alternative exists except accepting a forced exit.

What investors saw here is a mystery, the rationale should invite people to avoid the project, but sometimes it’s based on other links and dimensions…

Read also:
Start-Up Profile: OpenIO
Another French one in open source object storage for massive data
by Jean Jacques Maleval | 2016.04.25 | News