Nirvanix confirms abrupt shut down rumors (but doesn’t apologize for royally screwing customers)

Cloud-based storage service for enterprise-level customers Nirvanix confirmed rumors that it will cease operations at the end of the month, the company announced in a letter posted on its website last night.

Nirvanix’s cloud service customers were apparently notified about a shutdown at the end of the month a little over a week ago, leaving them with very little time to migrate over to a new cloud storage service provider — which is not exactly an easy task. Nirvanix had previously proven itself as a credible cloud storage provider — an alternative to industry giant Amazon Web Services (AWS), and formed partnerships with lots of notable tech firms like Symantec, IBM, Dell, Ooyala, and many others. What’s even more surprising about the failure is that the company had a significant amount of funding, too, making the shutdown even more of a shock.

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The shutdown is likely to send a chill up the spine of anyone using a lesser-known cloud storage provider, and could have larger implications going forward. For instance, companies may be more hesitant to go with a smaller cloud storage service for fear of a repeat of Nirvanix happening — even if that smaller cloud storage service is cheaper and makes more sense to use than the larger, more established services.

Nirvanix had previously raised $70 million in funding from Khosla Ventures, Valhalla Partners, Intel Capital, Mission Ventures, and Windward Ventures. Its last round was for $25 million, in May, 2012.

The company said it’s working to keep access to the service open through mid-October, which should at least help its former clients migrate to another company.

Here’s the official statement from Nirvanix (and note the lack of a straightforward apology):

Nirvanix Customers,

For the past seven years, we have worked to deliver cloud storage solutions. We have concluded that we must begin a wind-down of our business and we need your active participation to achieve the best outcome.

We are dedicating the resources we can to assisting our customers in either returning their data or transitioning their data to alternative providers who provide similar services including IBM SoftLayer, Amazon S3, Google Storage or Microsoft Azure.

We have an agreement with IBM, and a team from IBM is ready to help you. In addition, we have established a higher speed connection with some companies to increase the rate of data transfer from Nirvanix to their servers.

We are working hard to have resources available through October 15 to assist you with the transition process, and have set up a rapid response team that can be reached at (619) 764-5650 [press 2 for customer support during normal business hours] or (888) 791-0365 after business hours, or contact customersupport@nirvanix.com.

Please check back to this web page periodically for status updates.

We thank you for your support and patience.

The Nirvanix team