Nirvanix files for Chapter 11 bankruptcy, vows to save data

Cloud storage provider Nirvanix has announced it has voluntarily filed for Chapter 11 bankruptcy as expected, following the news earlier this month it was to shut down effective September 30.

The Nirvanix website paints a sorry picture this morning, with a company update put almost out of the way at the bottom of the page stating that bankruptcy was sought “in order to pursue all alternative to maximise value for its creditors while continuing its efforts to provide the best possible transition for customers.”

A statement on the website also details the efforts the company is taking to make sure its customers don’t lose out, either returning data or transitioning it to other providers. Nirvanix state they are “working hard to have resources available through October 15” to aid the transition process.

The CSP is working particularly closely with IBM, with a team from Big Blue on hand to assist data transfer.

According to the filing submitted by Nirvanix, the company has between 50 and 99 creditors, with estimated assets and liabilities both in the $10m-$50m range. Perhaps not surprisingly the largest unsecured creditor was Dell, with Nimsoft, Equinix and Modis also featuring heavily. Salesforce.com and Gartner are also named in the document.

Khosla Ventures and TriplePoint Capital, on the other hand, hold the largest amount of Nirvanix equity and are able to provide financing to ensure Nirvanix keeps afloat while the operational ins and outs take place.

The news of Nirvanix’s shut down caused shock among the cloud community, with plenty of column inches dedicated to examining the importance of cloud exit strategies.

As Kyle Hilgendorf, Gartner research director, put it a blog post: “Cloud exits are not nearly as sexy as cloud deployments.

“Cloud providers will continue to go out of business. It may not be a frequent occurrence, but it will happen.”

The filing, as well as the announcement, at least gives customers some reassurance that their data is being handled in the best possible circumstances. But as this chapter comes to a close, there’s plenty of food for thought.

What’s your opinion on this? Are companies too reticent in putting together an exit strategy?

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