In a Blow to Cloud Computing, Nirvanix Officially Shuts Down

　　early two weeks after reports in The Wall Street Journal and several tech publications that the cloud-storage company Nirvanix Inc. was going under, the company has finally acknowledged they’re true.
　　Nirvanix has now wiped all information off its website, except for a noticesaying that it’s working with International Business Machines Corp. and “dedicating the resources we can” to either returning customers’ data or helping them transfer it to IBM, Amazon.com Inc., Google Inc., Microsoft Corp. or some other cloud storage provider.
　　“We are working hard to have resources available through October 15 to assist you with the transition process,” the website says.
　　Since it was started in 2007, Nirvanix had raised about $70 million from firms including Khosla Ventures, Intel Capital, Mission Ventures, Valhalla Partners and Windward Ventures, according to VentureWire records.
　　The company described itself in press materials as “the leader in enterprise cloud storage” and touted its “extreme security, reliability and redundancy.”
　　In May 2012 after the last funding round, which was $25 million, former Chief Executive Scott Genereux told VentureWire that Nirvanix was growing and headed toward profitability and a possible IPO.
　　In October, at the Intel Capital Summit, Mr. Genereux praised Intel for its help in closing a large transaction between Nirvanix and Credit Suisse, and in December, after he had left Nirvanix for Oracle Corp., Nirvanix announced that it was ranked by the industry analyst Gartner Inc., which rated Nirvanix’s product viability as “excellent.”
　　(In a blog post last week, Gartner urged corporate customers to have a cloud exit strategy and to not panic at the Nirvanix news. The firm said it’s been fielding questions from Nirvanix customers on what they should do).
　　So far, not a single Nirvanix investor or any of its three last chief executives (two followed Mr. Genereux) have been willing to discuss publicly what went wrong with the company or say what precautions, if any, were taken to protect Nirvanix customers. (If that changes, I’ll update this post).
　　Venture capitalists must ultimately answer to their own investors–their limited partners–and it makes sense for them to put the best public face on a company for as long as they can while at the same time refusing to throw good money after bad.
　　Still, the sudden and secretive way that Nirvanix is shutting down has raised questions about the future of cloud computing. Nirvanix is the second venture-backed cloud-storage company to fail so publicly in less than three years–Cirtas Systems Inc., which had raised a little over $30 million, closed abruptly in April, 2011.
　　Despite the hype around cloud computing and the several cloud companies that have been successful so far, Nirvanix’s sudden demise serves as a warning once again to be careful about putting anything of value in the cloud.