Cloud Computing Vendors Ring In New Year With Big Funding, Investment Boosts

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Cloud computing vendors may be popping the bubbly well into the new year, as a handful of promising cloud computing startups have started off 2011 with sizeable financial injections to get the ball rolling.

And the early influx of cash to kick off 2011 comes on the heels of many more cloud computing up-and-comers that closed out 2010 with late-year funding to help them dig their claws deeper into the channel.

The windfall of cash to cloud computing startups is a sign that the excitement around cloud computing is just as fervent, if not more so, in 2011 as it was in 2010.

"Cloud computing is even hotter this year," said Paul Burns, president of Neovise, a cloud computing and IT management analyst firm. "There is a ton of innovation, much of it happening in startup software vendors."

According to Burns, while the funding kick for cloud computing startup vendors is expected to continue throughout the year -- and probably at a faster clip and with bigger amounts than in 2010 -- cloud acquisitions may also best those of last year.

"Some in that same category are getting acquired," he said. "I expect a lot more acquisitions and investments in cloud computing in 2011. This will be a multiyear process of vendors and service providers building out the 'best' portfolio."

Among the companies to get a boost is self-service cloud automation provider Skytap, which this week secured a $10 million purse to help it bulk up its cloud automation presence. The $10 million Series C round of funding was led by OpenView Venture Partners with participation from existing investors Ignition Partners, Madrona Venture Group and Washington Research Foundation.

Skytap's plans are to use the funds to pump up sales and marketing efforts, and the channel is going to play a big role. Last year, Skytap joined forces with CSC to power CSC's CloudLab, and Sundar Raghavan, Skytap's chief product and marketing officer, said more partnerships are in the works.

"We think by investing strategically in that area [the channel] we can grow quite a bit," he said.

Also this week, cloud computing security player Symplified announced that it closed a $9.2 million Series B round of venture capital financing, which brings its total funding to $18.8 million. The company plans to continue to flex its cloud security muscle later this year with additional Series C expansion capital. Symplified offers an identity management suite for the cloud, tackling single sign-on, access control and identity management for both public and private cloud applications.


Next: Investing In Traction, Not Ideas

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