StorMagic expands into encryption key management by acquiring B.C.-based KeyNexus

Jeff MacMillan, founder and CEO of Victoria-based KeyNexus, becomes StorMagic’s CTO, with responsibility for the whole company’s technology strategy.

Jeff MacMillan, who comes from KeyNexus to become StorMagic’s new CTO

Edge-focused hyperconverged infrastructure [HCI] vendor StorMagic is now also an edge-focused encryption key management vendor. Bristol, U.K-headquartered StorMagic has acquired Victoria B.C-based KeyNexus. The two companies were already strategic partners and KeyNexus was OEMed in StorMagic’s solution. This deal is about much more than bringing a partner into the fold, however. StorMagic’s intent here is to actively move into the security space where it conjoins with their HCI around the edge. To reflect that, Jeff MacMillan, KeyNexus’ CEO and founder becomes the CTO for the whole company, not just its security component.

“We are really excited about this,” said Bruce Kornfeld, StorMagic’s CMO and Product Officer. “We feel we are doing something different in bringing a new set of solutions to customers, and bringing the edge closer to core for all customers. This gives customers more reasons to look at how they can manage storage and manage encryption keys all from one environment.”

There have been other acquisitions where a storage company acquires a security  company or vice versa, expanding into what they saw as natural adjacencies.  Those typically haven’t worked that well, but Kornfeld doesn’t think they are relevant to this situation.

“Those were larger companies, and they took more of a shotgun approach,” he said. “This is more of a rifle. We are very focused on what customers are looking for to solve a problem around encryption key management. We found an opportunity to bring a subset of security to market with key management for encryption.”

The two companies first partnered almost a year ago, with an integration that added StorSecure Encryption and Key Management to StorMagic’s SvSAN HCI offering. That was a very different use case than the company envisions going forward, however.

“StorSecure is for storage customers who want data at rest encryption at the edge, and it is tuned specifically for data at rest encryption,” Kornfeld said. “This acquisition is not about a road map for storage. It’s about StorMagic truly entering the security market. We saw an opportunity to do that and to branch out with a whole new product line.”

That line is SvKMS, an enterprise grade offering which is designed for any encryption application, whether edge, data center or cloud. It lets the customer manage all of their keys no matter where they are.

“This fits right into our Go-to-Market,” Kornfeld said. “We enable customers to manage their edge environment, and this complements that. We work to solve our customers’ edge computing storage and security problems. They go hand in hand. Customers have more than data at rest encryption issues. They have applications at the edge that need enterprise key management. SvKMS runs in a data centre, but distributes keys to all applications to the edge.”

Kornfeld said that other key management vendors StorMagic customers had worked with couldn’t handle the scale of larger numbers of edge site deployments.

“Other vendors couldn’t handle over 200 sites because they didn’t have the scalability,” he said. “We would bring KeyNexus in for deployments with more than 200 sites.”

Jeff MacMillan, KeyNexus founder and CEO, joins StorMagic as CTO, responsible for the company’s overall technology strategy and execution. He replaces Chris Farey, one of StorMagic’s co-founders back in 2006, who will continue to remain an active part of the company on a part-time basis.

“We are actively working to merge our roadmaps,” MacMillan said. “From the KeyNexus perspective, now that we look at it around storage, it moves other things to the front and focuses on edge to cloud. Key management was once something for big enterprises, but the world has totally changed, and the market has evolved from both a size and use case perspective. The legacy vendors in the space won’t help customers with cloud workflows, or edge use cases, so we consider the market to be largely green fields.”

StorMagic anticipates that their current channel can handle the new security product.

“The channel that we have today is a mix of storage only and storage/security, and we have a very good network of VARs around the world,” Kornfeld said. “At least half have the ability to go to market with us around security. It’s perfect for a cloud hoster who can serve up keys to multiple clients.”

The expansion into edge security comes at a time when StorMagic is already showing strong momentum.

“Our business is going really strong right now,” Kornfeld said. Revenues are up significantly YOY. Brian [Grainger, who arrived as CRO a year ago] has built out an amazing sales engine with new countries and regions we haven’t been in before, and we have thousands of HPE salespeople positioning SvSAN as a StorVirtual replacement.”

SvKMS is available now through StorMagic’s global network of reseller and technology partners. Pricing for a single-node configuration with unlimited transactions and integrations, advanced key management features and the flexibility to deploy at the edge, on-premises or cloud, begins at $USD 9,500.

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