XOsoft: Pricey, and Proud of It

By Baselinemag  |  Posted 2005-04-06 Print this article Print

XOsoft claims its software is pricier than competitors'; fans of the startup say the products deliver on their promises.

In 2001, XOsoft abandoned its original business, which offered a content-distribution service over the Internet, a la Akamai Technologies. Instead, it switched to selling data replication software—and now, the company claims it's so good at what it does that it can charge a premium.

Just the bluster of a startup desperate for attention? Maybe, but customers do profess satisfaction with XOsoft.

"I give them my highest accolade: I can forget about it, and it does its work," says Kevin Lohan, vice president of technology and systems for reinsurance firm Max Re. The company uses WANsync to replicate data from its Bermuda headquarters to an office in Dublin, Ireland. Lohan notes, however, that when he bought the software in mid-2003, he paid $22,000 for a six-server license, which was only a bit higher than NSI Software's.

Still, XOsoft proudly claims it's the priciest software of its kind. "Customers are willing to pay more, because our software works and it's easy to use," says Gil Rapaport, head of strategy and marketing. The company charges between $5,000 and $8,000 per server, depending on application, up to three times the pricing of replication packages from NSI or Veritas Software.

Customers say a key advantage of XOsoft's WANsync software is that unlike some traditional replication products, it's built for long-distance, low-speed networks. PowerDsine, which develops technology for sending data over power lines, initially found the traffic generated by WANsync swamped the 1.5-megabit-per-second link connecting its U.S. and Israel offices, says Yaron Rachmany, manager of global information technology. Then, Rachmany enabled the software's compression, which cut the amount of data transferred by 70%. "That saved us from having to upgrade our bandwidth," he says.

When Greg Bierbaum, technology manager at St. Louis investment firm Buckingham Asset Management, evaluated data replication software two years ago, he was "a little concerned" that XOsoft was a young company with a relatively immature product. But WANsync was among the most efficient products available at the time, he says, and since then, the XOsoft software has worked as advertised. "I've really had very few problems with the product," Bierbaum says. "They run a pretty tight ship."

Data Replication Software

35 Corporate Drive,
MA 01803
(781) 685-4965

TICKER: Privately held


Leonid Shtilman
Founded the company in 1999. Previously, he was chief technology officer of Identify Software, a developer of performance monitoring tools he co-founded in 1995. Before that, the Israel native was a software engineer at NASA.

Tom O'Connell
Joined in March 2003 as vice president of sales and alliances. Previously held sales management positions at Sybase, Oracle and Digital Equipment Corp.

WANsync software replicates data from file servers, Microsoft Exchange and SQL Server, and Oracle databases to backup servers over long-distance network connections. WANsyncHA adds the ability to automatically switch over from a primary server to a secondary replica.

Reference Checks

Gruss & Co.
Liz McMillan
Dir., Technology
Project: New York merchant bank uses WANsync to replicate Microsoft Exchange and database data to a backup site in Connecticut.

Buckingham Asset Management
Greg Bierbaum
Mgr., Technology
(314) 725-0455
Project: Investment management firm in St. Louis replicates about 100 gigabytes of data with WANsync to a recovery site 15 miles away.

Locke Liddell & Sapp
Jeremy Newhouse
Mgr., I.T. Projects
Project: Law firm uses WANsync to synchronize more than 2 terabytes of data stored on eight Microsoft Exchange servers and eight SQL Server databases at its two primary offices in Dallas and Houston.

Max Re
Kevin Lohan
VP, Technology and Systems
Project: Bermuda-based reinsurance company sends about 2 gigabytes of data per day to its office in Dublin, Ireland, using WANsync.

Yaron Rachmany
Mgr., Global I.T.
Project: Power-line network technology developer replicates 300 to 400 gigabytes of data daily between its Israel headquarters and office in Farmingdale, N.Y., with WANsync.

Gerhard Fiedler
Project: Provider of application management services in Ontario, Canada, has deployed WANsyncHA at 15 customer sites to provide automatic fail-over in case a primary server goes down.

Executives listed here are all users of XOsoft's products. Their willingness to talk has been confirmed by Baseline.

Revenue, 2004 (est.): Less than $10M
Funding to date: $30M
First profitable quarter: Q4 2004

JK&B Capital, Draper Fisher Jurvetson Gotham, Platinum Neurone Ventures (PNV), Seed Capital Partners, Goldman Sachs
Burlington, Mass.; New York; Cupertino, Calif.; Beit Dagan, Israel

Other Major Customers
Financial: Bank Leumi (Israel), Bank of Montreal, Merrill Lynch
Media: Bloomberg, British Broadcasting Corp., Universal Music
Manufacturing: General Motors, Intel, Lexmark International, Mitsubishi Motors, Raytheon
Government: Federal Reserve Board, U.S. Army, U.S. Coast Guard, U.S. Dept. of Agriculture, U.S. Navy
Legal: Kennedys (U.K.), Pillsbury Winthrop

Founded as an Internet content-distribution service provider

2001 Raises $9M in fifth round of funding

2003 Releases Data Rewinder software

Switches focus to data replication software

Sources: Company Reports, Baseline research


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