San Diego-based cloud storage provider Nirvanix is shutting down. The closure was first reported Tuesday by UK-based Information Age, and content hosted by Nirvanix will be unavailable sometime within the next month.
Initial reports indicated that customers had until September 30 to retrieve their data, although the deadline seems to have been moved to October 15. With petabytes of data hosted for numerous companies, the Nirvanix exodus seems likely to be challenging, or worse.
“You may not even get any support from the provider. You may be facing the worst company fear – losing actual data,” Kyle Hilgendorf of Gartner warns in a post on the Nirvanix closure. “If you are a Nirvanix customer, it’s too late to build a strategy. Drop whatever you are doing and get as much of the data as you can back immediately.”
Nirvanix raised over $25 million in funding in 2012, and had previously raised over $45 million. The company had also formed a number of high-profile partnerships with companies like IBM (for its SmartCloud Enterprise portfolio) and Dell. The American provider also polished its reputation for disaster mitigation with its handling of the 2012 Dallas tornadoes and Hurricane Sandy.
Even before these positive steps, Nirvanix was considered by some industry insiders to be a rising force.
Despite these positive indications of the company’s financial health, there were signs of trouble. Nirvanix was headed by three CEOs in the past year, and five in the last six years. The company also laid off part of its US sales staff last year as it attempted to cut costs to compete with Amazon.
The difficulties in retaining leadership and the fierce competition for cloud storage business are being cited as causes for the cash crunch which is causing the shutdown. While the growth in cloud adoption and revenue is well established and projected to continue rapid growth, competition is squeezing price and therefore margins, meaning cloud storage profits are far from guaranteed for any particular company, particularly in the short term.