Egnyte brings business files into the cloud

Egnyte is a new startup that wants to help small and medium-sized businesses move their file management into the Internet cloud. After being self-funded for two years, the Mountain View, Calif. company has just raised a first venture round of undisclosed size.

At its most basic level, Egnyte is an affordable way to store data. There are, of course, tons of online storage services out there — Dropbox, for example, is a group storage site that left testing mode earlier this week. But chief executive Vineet Jain says most online storage services are aimed at consumers. Egnyte. on the other hand, targets small businesses with a cheaper solution than an on-site box like Microsoft’s SharePoint server. Egnyte makes it easy to share files among employees and customers through automatic “versioning” (so you have multiple versions of a file, in case you want to undo some changes), a system that lets administrators control who can read/write/delete each file and a way to send links to embedded versions of large files such as videos, rather than emailing the file itself.

The interface is very simple and clean. My favorite feature is the ability to download the application to your desktop, then use it as if it were just another hard drive — after installation, you may never need to visit the Egnyte site itself.

Jain says Egnyte should fit comfortably between consumer-oriented storage solutions (which tend to be weaker on sharing, security and administrative control) and the storage offerings sold to large corporations. He says an average Egnyte customer has around five employees. Since Egnyte charges a monthly fee of $15 per employee, that’s a total of $900 per year. The average on-site server, on the other hand, costs about $7,000 per year.

In a way, Egnyte is also competing with collaborative tools like Google Docs and Google Sites. VentureBeat, for example, does all of its filesharing and editing in Google Docs. But Egnyte is different because, in Jain’s words, “Our world is all about files.” That focus means Egnyte is much better for sharing many different kinds of files than Google Docs. It also means that if you want a company wiki or project management tool, you’ll want to use something in addition to Egnyte.

Since launching earlier this year, Egnyte has gained more than 1,000 customers, Jain says. If you want to try it out yourself, enter the promotional code “VENTUREBEAT” at the Egnyte site. The first 50 sign-ups will get a free one-month trial (in addition to the standard 15-day trial).

The funding was led by Maples Investments, with participation from retired serial entrepreneur Steve Blank. Although Jain wouldn’t say how large the round was, he did mention that it was “substantially less” than the $7 million first round he raised for his previous company, Kleiner Perkins-backed Valdero.