Cloud storage startup StorSimple just raised $13 million in Series B funding round led by Mayfield Fund. Cloud storage is hot which is reflected by the massive M&A activity from the big guys like EMC, NetApp, IBM, and HP. One of the company’s co-founders, Guru Pangal, founded a company called Rhapsody Networks, which was sold to Brocade a few years ago. Can Guru Pangal do it again on the heels of 3Par?

StorSimple recent round brings the company’s total funding to $21 million. According to the company the investors in this round include new investor Ignition Partners and both existing investors: Index Ventures and Redpoint Ventures. Use of funds from the 13 million Series B will be used to expand sales, support and product operations. StorSimple’s business model is focused on optimizing secure, high-performance, high-availability hybrid cloud storage for Microsoft SharePoint, Exchange 2010, File Services, and Virtual Machine environments.

Cloud Infrastructure and Cloud Storage is Hot – VC Funding Flowing

Cloud startups have been getting a ton of traction lately. Just this month I covered Atlantis Computing which scored $10 million from their investors and Cisco Systems for a new way of thinking about cloud storage.

At VMworld 2010, I sat down with some of the top cloud VCs and they talked about why storage is so hot and why these new infrastructure companies are different than the hot “web based” app companies. Watch and listen to my interview with top cloud VCs about where the hot areas in cloud from Pete Sonsini, NEA; Charles Beeler, El Dorado Ventures; and Ping Li, Accel Partners.

According to the company here is some quotes to validate the offering, business prospects, and new funding.

“Mayfield, as the original investor in 3PAR, knows the cloud storage market is a once-in-a-decade disruption,” stated Navin Chaddha, managing director at Mayfield Fund. “Enterprises want the best-of-both worlds: the instant, elastic provisioning of the cloud that is available from anywhere with low-cost utility billing while still being able to give users familiar applications such as Exchange and SharePoint with the same security and at least the same performance. The StorSimple application-optimized cloud storage appliance securely integrates the cloud into familiar enterprise applications without forcing companies to move their applications into the cloud.”

“We understand the Microsoft ecosystem very well,” said Richard Fade, partner at Ignition Partners. “SharePoint is the fastest-growing Microsoft server product ever. Companies want to expand its usage from small collaboration databases to multi-terabyte databases that were previously the domain of multi-million dollar content management systems. StorSimple with its SharePoint Optimizer is able to do this, reducing database size by up to 95 percent and storage requirements by up to 80 percent. This dramatically improves high-scale SharePoint performance and has out-of-the-box integration with Azure. Users can also get the familiarity of Outlook/Exchange and the ‘unlimited storage’ of hosted email, as StorSimple enables PST files to move to Exchange 2010 Personal Archives that can be securely stored in the cloud.”

“The last decade created great virtualization companies based on the fact that typical CPU utilization was at 5 percent,” said Mike Volpi, partner at Index Ventures. “Today, storage utilization is often at 10 percent to 25 percent. This decade will create great companies that will combine the instant provisioning of the cloud with the security and performance of enterprise storage. We believe StorSimple will be the leaders in this hybrid cloud storage category.”

“We have been an early investor in StorSimple and saw the market potential from day one,” said Satish Dharmaraj, partner with Redpoint Ventures. “We see 20 percent to 40 percent of storage moving to the cloud, and StorSimple will drive massive enterprise revenue to leading cloud providers such as Amazon, AT&T, EMC and Microsoft, putting it at the forefront of the cloud integration into the enterprise.”

“Feedback from our customers and partners confirmed that we are in the right part of this high-growth market,” said Ursheet Parikh, founder and CEO of StorSimple. “Their feedback convinced us that we had to accelerate growth plans and establish our leadership position in hybrid cloud storage.”