ATLANTA … Storage, says Zulfiqar Qazilbash, co-founder and chief strategy officer, of iVivity, “is the final frontier of information technology where no significant new infrastructure development has occurred over the last 20 years. It’s the bottleneck”

Qazilbash points out that “over the last decade most of the improvements have been made on the networking side and storage has not kept up, even though the need for it doubles every year. It’s a very big market.”

For that reason, whenever we ask venture capitalists to cite the hot technologies they want to fund, new ways to handle digital storage always gets mentioned. Banks, stock markets, financial institutions, pharmaceutical companies, and the government all need faster, more reliable and less complex methods of handling digital storage, analysts say.

Investors liked iVivity’s storage-on-a-chip technology enough to give it better terms than the company expected on its $26 million dollar Series C round May 19. The company says it originally planned to raise only $20 million.

Grotech Capital Group and JK&B Capital led the new round. Other investors in
the deal include familiar fund names: H.I.G. Ventures, Commonwealth Capital Ventures, Kinetic Ventures, Cordova Ventures, Yamacraw and Bergman & Associates

Hiring in 2005

Founded in 2000, iVivity has raised $50 million so far and expects to have a prototype of its storage technology available in the third or fourth quarter this year. Qazilbash tells Local Tech Wire the company plans to ramp up sales and marketing next year, adding up to 20 people to the 40 person company.

Qazilbash says the company expects to do $100 million in business within two years, achieving profitability by 2007.

The company has competition, mostly west coast startups such as Aarohi Communications, Astute Networks, and InStor Solutions. But iVivity says its product is faster, performing at 10 Gigabits a second, and works on all protocols.

The chips are undergoing tests with potential customers now and performing well, the company says.

The goal of iVivity, says Qazilbash, is to make storage technology and storage management as transparent as a utility such the telephone. “Today’s storage is not that easy,” he says. “It has to be installed and you need expert technicians on staff to handle it.

A magnitude different

“We’re producing something a magnitude different from what exists. It provides both higher performance and higher reliability. It’s a building block technology that’s not hard to include in low end systems.”

He notes that some high end systems today have complex storage management technology that’s more expensive and not so simple, but taking it to the lower end systems without the cost and complexity opens up the market.

That market, he says, is forecast to reach $1.7 billion by 2006.

Qazilbash says he thinks iVivity has a four-year head start on its competitors and any other company that might attempt to enter the market.

He also notes that “This is beyond an experiment. Two of the industry’s biggest companies are investors in iVivity. They see the benefits associated with it.”