Vyatta Confirms $12 Million Funding Round As Virtualized Networking Demand Grows


Virtualized networking specialist Vyatta has in recent years cultivated a presence among solution providers and IT professionals embracing open source networking services and data center consolidation. These days, the company is seeing substantial rewards from all that pavement-pounding, with sales on pace to triple this year, and a new round of venture capital funding helping fuel its growth.

HighBar Partners led the $12 million round, which Vyatta confirmed Tuesday. HighBar Managing Partners Roy Thiele-Sardina and John Kim are both joining Vyatta's board of directors.

Existing investors JPMorgan, Arrowpath Venture Partners and Citrix Systems also participated, and the round brings Vyatta's total funding to more than $45 million.

Kelly Herrell, Vyatta's CEO, said Vyatta nearly tripled in terms of year-over-year revenue, and will more than triple next year based on its current trajectory. Among the company's major internal moves were several key hires over the past year, including Sheen Khoury, senior vice president of sales and field operations, and Jon Arnold, managing director of EMEA.

But it's in the channel where Vyatta is coming on particularly strong. VAR acquisition has been steady, and it has added two-tier distribution overseas, including Zycko in Europe and CTC Itochu in Japan. Vyatta is on pace to do up to 70 percent of its revenue through channel partners by next year, Herrell said, and up to 85 percent the following year.

"There's tremendous demand out there," Herrell said. "It's an evolution toward self sufficiency for channel partners and commitment on the part of Vyatta to help penetrate significant opportunity."

The funding round will be used to increase Vyatta's geographic coverage by what Herrell described as a combination of reach and density. Vyatta is hitting its stride just as many enterprise IT managers have cleared the hurdle for server virtualization and are focusing their attention on how to virtualize network services to make their infrastructure more dynamic.

The Vyatta OS -- which will see several updates in the new year, Vyatta confirmed -- is portable to standard x86 hardware as well as most virtualization and cloud platforms, offering enterprise-level routing and a full range of security features. Most often, said Herrell, solution providers are able to sell Vyatta as a complementary solution.

"The majority of the stuff we're doing is not a competitive replacement," Herrell explained. "There's brand new demand out there for virtualized networking solutions, and what we have is complementary to a lot of the infrastructure in there already. When you begin to virtualize your applications -- we're moving inexorably toward 100 percent virtualization of x86 workloads -- that drive toward virtualized computing is creating the market for virtualized networking."