DataGravity Pulls In $30M More to Go Big in Business Analytics

1/29/13Follow @gthuang

Gravity is at the core of the universe’s greatest mysteries. How Einstein’s general theory of relativity jibes with the Big Bang. How quantum theory might explain all forces at the smallest scales. And now: how a young company just might find the Holy Grail of “big data” analytics, by helping businesses extract insights from piles of corporate information.

OK, this is big business we’re talking about, not big science. But Paula Long holds her own, quoting an apocryphal saying in the tech industry: “God created the world in seven days because he didn’t have to worry about an installed base.”

Long is the co-founder and CEO of DataGravity, based in Nashua, NH. Her point, as I see it, is that big established companies can’t really solve the big-data problem. They’re too entrenched in old ways of storing data, analyzing it, and moving it around; they’re bogged down with legacy systems and existing customers. “You have to look and organize things in a totally different way,” Long says.

At this point, I should mention that DataGravity has just raised $30 million in Series B funding led by Andreessen Horowitz. That’s New England’s biggest tech-financing deal of the year so far, and it’s bound to stir up lots of interest. The round includes the startup’s previous investors, General Catalyst and Charles River Ventures. All of a sudden, DataGravity is one of the better-funded startups in the Boston area, with $42 million raised to date. And we don’t even know yet what the company is building.

What we do know is that DataGravity plans to release its product in 2014; it will consist of both software and hardware (but mostly software). The startup has about 30 employees now and is shooting for 45 to 50 by the end of this year. Currently it is hiring in development, marketing, sales, and support.

Long and her co-founder, John Joseph, who serves as DataGravity’s president, are veterans of EqualLogic, the storage company bought by Dell for $1.4 billion in 2007—reputed to be the biggest cash purchase of a private tech company to that point in history. Long was an EqualLogic co-founder, and after spending a couple of years at Dell, she did a stint at Rethink Robotics (fka Heartland Robotics) as vice president of engineering before starting her current venture.

I pressed Long and Joseph for some details about what they’re working on. The big idea, Long says, is “how do you extract information from storage” and “make the ever-growing storage burden an asset rather than a liability?” That means, among other things, providing software that takes a broad view of a company’s data—across e-mails, documents, presentation decks, spreadsheets, and so on—and delivers suggestions about what to do.

One simple example: People often wonder who in their company has contacts at another company or in another department. DataGravity’s software could look at corporate data and help employees build social maps and avenues for collaboration. To that end, the company is hiring people with expertise in data visualization and analytics, as well as traditional storage.

“Your data knows a lot about what’s going on in your business,” Long says.

The customer sweet spot, at least in the beginning, will be mid-sized companies with 200 to 2,000 employees, across many industries. And the big sales goal is to make the software usable by business people, not just techies. Joseph says he’s looking for marketing execs to “call our product out by name.” He adds, “That would be a significant paradigm shift.”

It’s almost too early even to talk about challenges—but rest assured there will be plenty. The result of gravity run amok is, after all, a black hole.

“Any time you change a paradigm, you have to make sure that you set expectations correctly and that you grow out the team,” Long says. Both she and Joseph harp on the importance of listening to customers before the startup goes to market. “That has to be ingrained in the culture,” Long says. “Otherwise you build products that you want but nobody else wants.”

That brings us to another meaning of “gravity”—having to do with seriousness and significance. The company seems to be gearing up to play there as well.

DataGravity probably wouldn’t say this, but if it’s successful it could eventually disrupt big players in data storage, analytics, and business intelligence such as EMC (Greenplum, Isilon, and Atmos businesses), Hewlett-Packard (Autonomy, 3PAR, and Vertica), and IBM (Netezza, Cognos, Unica).

Of course, the competitive field is also strewn with more targeted, newer approaches including Hadapt and Quant5 in analytics; HubSpot, Constant Contact, and Salesforce.com in marketing; Backupify, Carbonite, and Dropbox in cloud storage; and Mimecast and Senexx in e-mail.

In any case, DataGravity’s mentors should be able to help it through its growing pains. “Selling a product is great, but building a whole ecosystem and economy around you is the way to build an industry,” says David Orfao of General Catalyst, one of the startup’s lead investors. (He knows Long from their days at Allaire in the late ‘90s; he didn’t invest in EqualLogic but got in on DataGravity from the start.)

I was interested to hear Orfao’s perspective on DataGravity’s big Series B—beyond the value added by Andreessen Horowitz (and partner Peter Levine, who’s joining the startup’s board). For example, is he seeing a Series A or B “crunch” that a lot of entrepreneurs have been talking about?

“I think the crunch is at the seed level,” Orfao says. “Competition is still difficult on doing a great Series A. But smart investors are looking at how do you pre-empt a B? And not have to go through a beauty contest with five or six other VCs to get in.”

If DataGravity ends up cracking the code on big-data business analytics, it will be a beautiful thing indeed.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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