Eucalyptus bags $30M for hybrid cloud solutions

Krystal Peak · April 18, 2012 · Short URL:

Already serving 20% of Fortune 100 companies, Eucalyptus partnered with Amazon for broader reach

Eucalyptus Systems, an open-source cloud software maker, announced that it raised $30 million in its Series C round of funding on Wednesday. This round was led by Institutional Venture Partners (IVP), Benchmark Capital, BV Capital, and New Enterprise Associates, which brings the company's total capital raised to $55.5 million. Eucalyptus says that it will use this new cash to help the company serve quickly growing demand for private and hybrid clouds.

Currently, Eucalyptus offers its open-source software platform for free to anyone who wants to use it, but has also found ways to commercialize the product through partners and customer support. The company’s tech enables 25,000 “cloud starts” each year, and serves 20% of Fortune 100 companies in some respect. This includes work for Aerospace Corporation, InterContinental Hotels Group, Plinga, PUMA, USDA, and 

What Eucalypus has to offer that’s different from other companies is its ‘hybrid’ clouds which use public and private resources to get unique benefits from each.  It allows for more features like end-user customization, self-service provisioning and in the end, claims to be, ‘less expensive.’

CEO Marten Mickos, formerly CEO of MySQL, has helped lead Eucalyptus to success in the highly active and competitive private cloud computing infrastructure space. Unlike some cloud services, Eucalyptus’ software sits inside businesses’ firewalls, using their own hardware and creates personalized clouds from that point -- rather than providing an outside service, stored on external servers. This approach to cloud services is attractive to larger companies with bigger security issues since they have control over the storage and access to data more than if the information were housed elsewhere

The company has existing partnerships with Amazon Web Services, Dell, HP, Intel, and has plans to work in deeper connections with RightScale, enStratus, Puppet Labs, and Electric Cloud.

Founded in 2007, the Santa Barbara, Calif.-based company has grown to 80 employees (which is triple the employees it has 18 months ago) with plans to continue expanding its workforce as it puts its new funding to use.

Competing the same space as cloud giant VMware, Eucalyptus is hoping that its key partnership with Amazon Web Services (in order to use the cloud giant’s API to connect Amazon’s cloud services) will continue to help the company stay competitive. 

The company's partner ecosystem has more than doubled to include over 200 of the top cloud and infrastructure automation vendors. 

Recent investments in the cloud

Cloud service companies have been in high demand for the last two to three years as more companies feel the pressure to put their data into a platform that can be reached by anyone around the world. As this has happened, more providers have cropped up with their own take on what the cloud should be.

In March, Cloud service consulting company Appirio raised $60 million for its Series-D round of funding.  This round was led by General Atlantic with participation from existing investors Sequoia Capital and GGV Capital. The company has now raised more than $76 million.

Appirio is focused on accelerating cloud-powered business solutions so that companies can better integrate services from, Google and Workday into their daily actions. 

The San Mateo-based company has worked with more than 300 enterprise customers including organizations like City of Los Angeles, Facebook, Flextronics, Home Depot, International Hotels Group, L'Oreal, NYU, Starbucks, Thomson Reuters and VMware. 

The five-year-old company has also added a focus on cloud app development in order to build apps that tie together multiple cloud services and social networks.

Then, just two weeks ago, a young cloud networking group, Pertino, Inc., announced its that it secured $8.85 million for its Series A round of venture funding. This round of capital was led with Norwest Venture Partners and Lightspeed Venture Partners. 

Pertino, founded in 2011, is attempting to reinvent business networking for the cloud by building a system that is simple, secure and flexible based on business needs (especially businesses with limited IT experience, staff and funds). 

“The cloud and ‘as-a-service’ delivery models have transformed the IT landscape from a computing, storage and application perspective while, at the same time, the network paradigm has changed little,” Craig Elliott, CEO of Pertino Networks said. “As a result, networks that once enabled businesses now constrain them when it comes to harnessing the disruptive capabilities and economies of the cloud.

Pertino Networks was founded to radically simplify and alter the economics of business networks by bringing them into the cloud era.”

While the market for cloud-based IT infrastructure and services already seems fierce, it appears to only be gaining momentum. One July 2011 report published by market research firm In-Stat, stated that businesses in the United States will spend more than $13 billion on cloud computing and managed hosting services by 2014, of which IaaS (Infrastructure as a Service) related spending is forecasted to reach triple digit annual growth to $4 billion.

Pertino is looking to use its newly acquired funds to expand engineering and go-to-market resources.

For now there is enough capital and work to go around as companies scramble to get their data into the cloud, but the clock is ticking on how long this hayday can last and soon companies will start feeling the pinch in the industry. Then there might actually be some real exciting development in services, when companies have to show just how innovative they can be to keep the business they have.

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