ClearSky Data Inc. emerged from stealth almost exactly a year ago with a proposal to all but erase the distinction between on-premise and cloud storage.

Its novel architecture uses co-location facilities to enable customers to fluidly move data back and forth between their data centers and the cloud. The company has since begun shipping commercial products to paying customers, raised a $27 million second funding round – bringing its total to $40 million – and brought on Akamai Technologies Inc. as a strategic investor and partner in helping to expand its footprint into new markets.

The technology works; now it’s time to grow the business beyond its current strongholds of New York, the District of Columbia metro area, Boston and Las Vegas, said CEO and co-founder Ellen Rubin (@ellen_rubin) in a CUBEConversation interview with Wikibon Analyst Stuart Miniman (@stu) this week. Enterprise customers are going all in on cloud, but storage performance is a big concern. “CIOs just want to make sure data is available to the customer with high performance and low latency no matter where it is,” she said.

Machine-generated data is a major driving force in demand. Companies use system logs to capture information data from their systems and networks to analyze and improve performance. Increasingly, they are also interested in grabbing Internet of Things (IoT) data to better understand company operations more broadly.

But many are unprepared for the sheer magnitude of data that machines generate. “You end up quickly with a petabyte problem,” Rubin said. “People using data tools like Splunk and Elasticsearch to try to figure out what’s causing networks or servers to go down or to identify anomalies or attacks. They want all the data, and they don’t throw it out.”

Cloud complexity

The location of data is also no longer a given, as it was in the past. As enterprises rapidly move to the cloud, “CIOs will tell you that they’re figuring out what needs to go where, in particular the primary data,” she said. “They don’t want to keep building out their data center footprint.”

Cloud infrastructure is an attractive option, but still such a new phenomenon that few best practices exist. “Customers don’t yet have something that shows them where things should go and how they should be orchestrated,” Rubin said. “We’re still at the very beginning.”

Enterprises are also hedging their bets by using at least one, and often several public cloud providers, and they aren’t yet letting go of their existing virtualization infrastructure or private clouds. As a result, “CIOs at medium to large enterprises currently have kind of got a mess on their hands,” Rubin said. “There are lot of the questions are about what goes where and how to migrate the data.”

More than 90 percent of the IT operations at a typical ClearSky customer are currently on premise, but that situation is changing. Worries about security and the viability of infrastructure-as-a-service (IaaS) vendors are largely a thing of the past, she said. Customers now “want a holistic approach. They don’t have to deal with infrastructure anymore, but they want the things they’ve always needed, such as five-nines availability, security and low latency.”

Service providers like ClearSky Data are an appealing option for simplifying that complexity. IaaS vendors may offer some powerful services, “but it’s kind of like Lego blocks,” Rubin said. “Customers have to put them together, and they don’t always have the skill sets to take advantage of those features without having to completely rebuild applications from scratch.”

While security concerns may have diminished, enterprise IT executives still worry about the integrity of their data. “They may have 10 petabytes sitting in a public cloud, and if something goes wrong, it’s a big deal.”

Boston strong

The interview was a bit of a love-fest for Boston, which is home to ClearSky, Rubin, Miniman and Wikibon. It will soon also home to General Electric Co. In light of GE’s leadership in machine data, Miniman asked, hopefully, “Could Boston become the IoT capital of the world?”

Rubin, a Massachusetts native, was hopeful. “The Internet of things is a huge category that spans a lot of different industries,” she said.

ClearSky Data’s two most recent investors – Polaris and Akamai – are also Bay State natives. Polaris was an early investor in Akamai. “Polaris has seen this movie before and seen how it evolves over a period of years,” she said.

One sore point for local tech startups is Massachusetts’s failure this year to passes a law limiting the use of non-competition contracts. Bills were introduced in both chambers of the legislature that would essentially invalidate most such agreements, but the reform effort died when the two legislative bodies were unable to reconcile their differences.

Opponents of non-compete contracts say the agreements are handcuffs that stifle innovation by preventing entrepreneurs from competing in markets they know best. Proponents – which are mostly large companies – say the contracts protect their intellectual property from walking out the door.

Rubin expressed frustration at the failure of legislators to act. “It’s not the most urgent issue we have, but it’s one of the easiest to fix,” she said. As a storage company doing business in EMC’s back yard, there would be clear recruitment benefits for ClearSky Data in not having to worry about such things.

Watch the full CUBEConversation below (18:44)

Image via SiliconANGLE