Nirvanix Declares Bankruptcy; Customer Data Pours Out

In Nirvanix's own announcement, which only recently replaced the come-ons that formerly made up the home page, Nirvanix said it was working with IBM's SoftLayer unit to move data out and into SoftLayer cloud storage. "We have an agreement with IBM, and a team from IBM is ready to help you. In addition, we have established a higher speed connection with some companies to increase the rate of data transfer from Nirvanix," the message reads. "We are dedicating the resources we can to assisting our customers in either returning their data or transitioning their data to alternative providers," the message also says. In addition to Amazon and SoftLayer, the message specifically mentioned Google Storage and Microsoft Azure's storage service.

Rackspace is trying to make sure it's not left out of the realignment. It has extended its own offer of assistance to Nirvanix customers on its website, promising to waive any import fees and giving them their first month's use of Rackspace Cloud Files for free. "Don't worry. We'll help you move your data to Rackspace Cloud Files and waive all migration fees," its notice says.

No further word has come from Steve Ampleford, CEO of Aorta Cloud, a U.K. service provider, on his attempt to find additional funding for Nirvanix. It closed $25 million from Khosla Ventures in 2012, bringing its total to $70 million. Despite high-quality services, Nirvanix ended up getting squeezed by improved performance of on-premises systems vs. the constantly dropping prices of other cloud storage service providers.

Amazon Web Services, Google, Microsoft and numerous startups saw cloud storage as a hyper-competitive battlefront where new customers would be gained or lost. Amazon announced storage price reductions at its Re:Invent show last November, quickly followed by Microsoft and Google.

The shutdown, however, came without warning. Moving petabytes of data out of Nirvanix over available export pipes, as multiple customers strained to use those pipes, could take nine to 10 months, warned Nasuni CEO Andres Rodriquez, whose firm provides a front-end data management system that uses different cloud storage services. An internal test warned Nasuni managers that it would be difficult to quickly extract data from Nirvanix, and it had shifted its last customer away from the service one month before the shutdown was announced.

One Nirvanix customer had reportedly used the service to store 20 petabytes of its data.