Cloud Storage Startup Cirtas Retreats

Another cloud storage operation shut down last week when startup Cirtas Systems, which developed a controller for storage in the cloud, announced it was leaving the market to regroup.

The company, founded in 2008, sold data-center systems designed to make public cloud storage behave like onsite arrays. The Cirtas Bluejet Cloud Storage Controllers were designed to let enterprises use services such as Amazon S3 (Simple Storage Service) for primary storage. Amazon and venture capital firms invested US$10 million in Cirtas last September, and the company completed another funding round for $22.5 million in January.

However, cloud storage, a relatively new concept, has had a rocky start in the market. Archiving vendor Iron Mountain plans to close its Virtual File Storage and Archive Service Platform services, though the company says it has other plans in the cloud storage business. Storage systems giant EMC launched a cloud storage service in 2009 but shut it down the following year, before even making it generally available for production use.

In a statement issued Friday, Cirtas held out the possibility of relaunching in the future.

“Cirtas has decided to pull back from the market at this time. Through our deployments we’ve learned a significant amount about what is required by the market and believe it is in the best interest of the company, our partners, and customers to focus on what we’ve learned,” the company said. A spokeswoman confirmed that Cirtas, based in San Jose, California, had laid off staff and was undergoing a reorganization.

Startups and established vendors all are jumping on the cloud storage bandwagon today, but as with the dot-com boom, reality is setting in, according to analyst Arun Taneja of The Taneja Group. As many as 70 percent of the cloud storage companies that have been created in the last three years eventually will disappear, he believes. Many other companies have built gateways for cloud storage, including Nasuni, StorSimple and TwinStrata.

“That’s what happens when you to through this hype cycle,” Taneja said.

The Taneja Group actually tested Cirtas’s product earlier this year and found it worked as promised. But when tested in enterprises at large scale, it failed to bring the needed performance, he said. “Our testing didn’t go far enough.”

Cirtas may be able to re-emerge, but to succeed, it will probably have to reposition the Bluejet in terms of both technology and marketing, Taneja said. Only a very small percentage of enterprises are ready to use cloud services for primary storage, so a better bet would be to target archiving backup, he believes.

“The fundamental work that they’ve done is actually still going to be very usable,” Taneja said.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen’s e-mail address is stephen_lawson@idg.com