StorSimple raises $13M to make the cloud cheaper (and hire this guy)

Cloud storage solutions provider StorSimple will announce tomorrow that it has raised $13 million in its second round of funding led by Mayfield Fund, an investor in recently acquired 3Par Technology, VentureBeat has learned.

As the cloud has exploded, it is shaking up the tech industry and providing new opportunities in once-established sectors like storage. StorSimple is hoping to grasp the oft-misunderstood concept of pushing computing resources online and provide a way to cheaply and efficiently harness the power of the cloud for enterprise.

StorSimple provides enterprise users with an appliance that houses on-board storage and a network connection to various cloud storage providers like Amazon Web Services and Iron Mountain. The most critical, recent information is stored on-hand for quick access, and the rest is shipped off to cloud storage.

The Santa Clara, Calif.-based company also announced today that it picked up Ian Howells (pictured above), formerly of Alfresco and SeeBeyond before its acquisition by Sun Microsystems, to be its chief marketing officer. Howells will get to spend some of Mayfield’s money, since the funding round is pegged for marketing and growing the business “organically,” according to StorSimple founder and CEO Ursheet Parikh. (Organic growth, a term for growth through the natural expansion of a business, is often a euphemism for saying a company doesn’t plan to make acquisitions.)

The appeal of cloud storage is pretty straightforward: 10 cents per gigabyte of storage in a pay-as-you-go model, versus a much higher price for physical storage solutions, said Navin Chaddha, a general partner at Mayfield. The recent bidding war over cloud storage hardware provider 3Par, which led to a nice profit for Mayfield and other investors, is even more evidence that the cloud is no longer just a buzzword.

One differentiating factor is StorSimple’s use of “deduplication,” which cuts down on bandwidth usage by uploading only changes to a file, like a single word updated in a text document, instead of copying the whole file all over again to the cloud storage provider. The goal is to cut down on the massive bandwidth costs that some companies face when uploading data to cloud servers — and reduce costs by up to 90 percent.

StorSimple had earlier raised $8 million in a first round of funding from Index Ventures and Redpoint Ventures. Ignition Partners joined the most recent round of fundraising. Despite the sizable investment, Parikh said he doesn’t see an exit in the immediate future — he believes that a company that provides cloud solutions can grow quickly for 7 to 10 years, and StorSimple has only been around since 2009.