Ocarina Networks lands $20M for content compression

Ocarina Networks, maker of software that compresses content to reduce online storage demands, announced today that it has brought in $20 million in a second round of funding to beef up its sales force, refine its technology and forge more partnerships with storage providers like Hewlett-Packard and BlueArc.

The San Jose, Calif. company claims its technology can compress data by up to 90 percent. Essentially, it can shrink 10 terabytes of data to between 1 and 2.5 terabytes. Accordingly, Ocarina says it can save its users a considerable amount in storage costs — an attractive marketing hook in this recession. And for companies concerned with greening their business models, cutting down on storage requirements can help shrink energy footprints, according to an Ocarina spokesperson.

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The company says it has gained traction among life science and research companies. Earlier this month, it sealed a deal to partner with Cornell University’s Center for Advanced Computing to compress data gathered from genetic sequencers and other health care instruments. But it says it has also found applications in the entertainment vertical. In addition to reducing the space occupied by data, its software also relieves network congestion, allowing applications to run more smoothly, making it more versatile, Ocarina says.

While the company competes with a similar technology from storage optimization firm NetApp , it says its biggest challenge is that most people and businesses are accustomed to buying more and more online storage as needed, not making the most of what they already have. The latest funding could help it call more attention to the benefits of data compression.

The investment round was led by Jafco Ventures, joined by existing backers Kleiner Perkins Caufield & Byers and Highland Capital Partners. Ocarina last raised financing in 2007, bringing in $11 million from Kleiner Perkins, Highland and Stanford University.