Cloud computing has been a boon to low-cost startups who use Amazon.com Inc.'s Elastic Cloud scalable server service and S3 storage service to launch Web applications for as little as $50 a month. And venture capitalists who often have been shut out as investors in such companies because of their low capital requirements have looked at cloud computing services and technology as a way of playing in the Web 2.0
experimentation sector.
But so far, the field is very early stage, and Charles River Ventures and Menlo Ventures are among the first VCs to announce institutional backing in an aggressive cloud player. The firm's announced today that they have co-led an $11.37 million Series A
round in Parascale, a software company that will sell licensed software to enterprise cloud operators and service providers to optimize cloud management. Parascale makes software that helps companies establish so-called "storage clouds," in which discrete data files are automatically migrated and replicated on storage nodes on multiple low-cost servers to balance and improve performance.
Cloud computing is what many assume to be the key to Google Inc.'s success in search technology by creating massive horsepower in processing data across huge numbers of linked servers, but the technology may be even more valuable in storing data. Parascale has software already being used in one announced test by caching systems maker Blue Coat Systems Inc., and expects to launch commercial sales shortly.
The Parascale funding comes after cloud computing startup RightScale Inc., a developer of tools for creating server clusters for Amazon Web Services, raised a $4.5 million first
round in venture capital from Benchmark Capital in April to fund customer growth and develop more tools for Web applications, and after EMC Corp. acquired Pi Corp., a cloud software development company owned by Warburg Pincus and former Microsoft Corp. executive Paul Martiz, in an all-cash transaction in February.
Parascale CEO Sajai Krishnan was most recently general manager of the StoreVault Division of NetApp Inc., where he was part of the deal team that acquired Menlo Venture portfolio company Spinnaker Networks Inc. of Pittsburgh in 2003. He says that Spinnaker, along with Charles River portfolio company EqualLogic Inc., which was acquired by Dell Inc. of Round Rock, Texas, for $1.4 billion last year, were pioneers in emerging distributed storage technology, and that Parascale is advancing technology in the sector.
"I was very familiar with the storage space, and clustered storage is a hard technology; Parascale had a very experienced team and investors who have funded the two best recent companies in storage," Krishnan says. "This will take us well into calendar 2009 when we will have launched commercially and have a decent amount of revenues."
-- Clifford Carlsen
See June 23 press release from ParascaleSee June 16 story from Tech ConfidentialSee April 25 story from Tech Confidential
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