By James Rogers, Byte and Switch

Data protection specialist Unitrends has clinched $9 million in Series C funding as the vendor prepares to revamp its technology.

The round, which was led by Paladin Capital Group and also included Aurora Funds, Herbert Venture Partners, and Trelys Funds, brings Unitrends’s total funding to around $18 million.

Unitrends’s CEO Duncan McPherson told Byte and Switch that the bulk of the funding will go to enhancing the vendor’s flagship Data Protection Unit (DPU) appliance, which provides backup and bare metal restores for SMBs. The vendor is also planning to enhance its Data Protection Vault (DPV) device for off-site disaster recovery.

“It’s for new product development -- new features and functionality,” he said, explaining that this will focus on CDP, virtualization, and de-dupe enhancements.

At the moment, Unitrends offers "near-CDP" for Exchange, which provides less frequent backups than real-time, and "true-CDP," which is sold by the likes of Bakbone.

“We’re revising our product line at the moment, the trend is certainly towards more granularity and shorter [backup] intervals,” says McPherson, but he would not confirm whether this will involve "true-CDP."

De-dupe and virtualization will be other key focus areas, according to McPherson. “As VMware continues to penetrate into the SMB market, customers’ demands for more sophisticated virtualization will increase,” he explains, but he would not reveal specific details of his roadmap.

Unitrends is not the only vendor attempting to tap the lucrative SMB backup market at the moment, and the startup is up against a number of vendors, including HP and EMC, with its AX150 device.

“We hardly every run into EMC in the marketplace,” says McPherson, claiming that Unitrends removes the need to buy multiple pieces of backup and disaster recovery hardware and software.

The CEO adds that his firm has racked up around 1,400 customers, including some larger organizations such as the Salvation Army and security specialist DataBank.

The Columbia, S.C.-based startup is also planning to significantly expand its 55-strong workforce over the coming 18 months, according to the CEO.

”We will probably have about 25 more employees by the end of 2008, the majority of these will go into product development functions,” he says, adding that Unitrends is likely to double in size by the end of 2009.

This recruitment drive is thanks partly to the vendor’s growing channel presence.

“We have 200 VARs, and we’re growing that market by about 100 percent a year, so we’re going to be making investments in marketing and lead generation, “ says McPherson. “We’re also going to make investments in systems engineers to support our VARs’ systems engineers.”

In a growing climate of economic uncertainty, an increasing number of vendors, including EMC, Dell, and IBM, are targeting their wares at SMBs, desperate to open up new routes to market. Earlier this year, for example, analyst firm IDC predicted that storage vendors will create more "all in one" offerings specifically to address the SMB market.

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