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Egnyte seeks to expand file storage business with latest funding round

Enterprises still have many files that have to be stored locally.

Egnyte, a Seagate Cloud Builder Alliance partner, recently raised a new round of capital as it seeks to expand its enterprise product line. While organizations are building cloud storage systems to support data analytics projects, mobility initiatives and new applications, many still have assets that are too sensitive to keep in a public cloud. Accordingly, they will require secure file sharing solutions that can handle locally and remotely stored assets and are compatible with desktop and mobile endpoints.

The Wall Street Journal reported that Egnyte received new funding this week in the run-up to a possible public offering. The company is betting on the belief that enterprises will always have a complex mix of data types, encompassing items that are suitable for the cloud and others that must remain on-premises. Egnyte’s solutions, such as its mobile apps that are integrated with its Storage Connect platform, provide secure access and management of files kept behind the company firewall, as well as cloud-stored assets.

“The view that companies are going to move 100 percent of data to the cloud is unrealistic,” argued Brent Jones, group managing partner at Northgate Capital Group, an Egnyte investor. “[The notion that some] information is too sensitive to go to the cloud is a huge market [and] a real differentiator.”

According to Egnyte’s own estimates, 60 percent of corporate files may be unsuitable for the public cloud. More specifically, Egnyte classifies data such as financial and engineering information as “red,” meaning that it should not be in the cloud at all. “Yellow” data may be copied to cloud storage, while “green” data is ok to exist exclusively on remote servers.

Egnyte’s efforts to boost its business offerings underscore the massive amount of resources currently going into enterprise file storage products. TechCrunch noted that Egnyte’s latest funding round comes amid strong investor interest in storage providers that are seeing strong robust growth as enterprises adopt cloud storage.