Investor Funding at Cloudian Triggers Pay-Per-Use Financing Option

Cloudian, the provider of object storage solutions for unstructured data, on Wednesday announced $125 million in financing via a joint venture deal with Digital Alpha Advisors. Thanks to the financing, Cloudian will offer consumption-based financing to customers and partners. 

The $125 million investment will be used to create a $100 million flexible funding option, and the remaining $25 million venture investment will support expansion of Cloudian’s sales, marketing and support organization. This latest round of funding is an expansion of Cloudian’s equity in the company, bringing the total up to $104 million, Jon Toor, chief marketing officer, told Channel Partners. 

The more exciting part of today’s announcement is the new consumption option, he said.

“This will help partners accommodate their customer’s needs – which includes making their environments more cloud-like with flexible procurement of storage, and flexible deployment – something that people have come to expect.” 

Jon Toor

Cloudian enables customers to deploy storage on demand in the data center without disruption, adding capacity as needed. With the new pay-per-use consumption model, partners can offer customers an alternative to purchasing equipment upfront, turning capex into opex. 

Initially, the consumption financing option will roll out to customers and partners on a case-by-case basis, structuring financing arrangements for specific customers. For partners who have large customers interested in this flexible funding arrangement for their storage, Cloudian will work with them to make it possible, the company said.

Later this year, expect to see Cloudian roll out a packaged offering. 

“As IT expectations change, we’re evolving both the technology and the financing to reflect those expectations. We’re evolving to a more cloud-like, opex-based model, a more flexible model in both technology and financing,” Toor said. 

Digital Alpha, is an investment firm focused on infrastructure, services and solutions that’s run by Rick Shroti, former managing director of the business acceleration unit inside Cisco. 

“Digital Alpha spent months evaluating customer satisfaction with object storage installations and found the ease of use, deployment and scalability of Cloudian to be highly differentiated,” said Shroti. “Moreover, we believe the firm is well positioned to leverage its leadership in Amazon S3 API integration in the emerging use cases of IoT, analytics and multi-cloud environments. Finally, we believe the culture created by the experienced management team at Cloudian will be conducive to further growth, as it is an attractive destination for industry-leading talent.” 

Back in July, Cloudian announced the Cloudian Hyperforce Partners Program, designed to tighten the vendor’s relationship with its channel partners, worldwide. At the time, the company said that its goal was to make partners more effective selling the company’s products and more knowledgeable about the new technology, to make it easier for them to register deals and to find sales and marketing materials to create their own programs. The new program was also aimed at helping partners get their demand generation up and running and provide education on the market to make partners the experts in their territories. 

Since that time, the amount of business that goes through the channel has increased from 50 to 75 percent, Toor said.

The company’s go-to-market strategy is twofold: It works with strategic technology partners such as Lenovo, Cisco and HPE, for example; and Cloudian also has a dedicated field sales team that focuses solely of working with and supporting partners and their customers worldwide.

Toor noted that Cloudian is open to new partners in vertical markets where the company and its products are underrepresented, such as video surveillance and health care, for example.