It was the event the industry had been waiting for, and not in a good way. A cloud storage provider closed its doors. Nirvanix was done, and clients had just weeks to download their data or lose it. On October 1, Nirvanix sought Chapter 11 bankruptcy protection and was doing all it could to help existing clients move data to alternate clouds, including IBM SoftLayer, Amazon S3, Google Storage or Microsoft Azure.
What went wrong?
Nirvanix found enterprise clients. In fact, between waves Nirvanix moved from 18th place on this chart to fourth. Narratives identified large enterprise clients that thought Nirvanix had ‘legs’ and expressed more concern about other vendors in the solution. Those other vendors are still in business. In addition, Nirvanix found quality partners. Blue chip vendor IBM signed an OEM deal and was reselling the product.
The problem was the business model. The prices Nirvanix had to offer to remain competitive were not covering the capital investments needed to set up global datacenters and install clouds in partner datacenters.
Cloud storage has received cautious, even skeptical, reactions from storage professionals. This failure adds an additional bullet point to the review list for evaluating cloud vendors. Not only must we consider the usual aspects of reference clients, feature/function, cost, etc.; we must now add in examining the business model and capital usage of the companies we plan to do business with.
- “We are happy with how it operates from a scale and de-dupe perspective. They offer great price points as well. They have a dependency on Panzura; we are concerned that Panzura cannot keep up the trend that Nirvanix is trying to set. I would like to see stronger SLAs, better provisioning times and the ability to ramp up without having to call them up and tell them.” – LE, Financial Services
- “Easy implementation so far. Nirvanix needs to market themselves better. They’re the back-end storage for IBM SmartCloud and also for Dell – no one knows this.” – LE, Telecom/Technology
- “Nirvanix, we think this company has ‘legs.’” – LE, Financial Services
- “Rolling out private storage cloud. We are using Nirvanix right now.” – LE, Financial Services
- “I would like to see better features and functionality. Nirvanix in a learning process with financial service companies. They need better security enhancements.” – LE, Financial Services