CloudHealth Raises $46M Funding Round, Founder Calls Cloud 'One Of The Biggest Opportunities For The Channel'

CloudHealth, a Boston-based startup offering a comprehensive cloud management platform that is seeing rapid adoption, raised $46 million in additional venture capital this week to scale more quickly.

CloudHealth will mostly invest the latest funding in developing its products across partner cloud providers, but will also finance new sales and marketing efforts, as well as further expansion of a platform for enabling channel partners, Joe Kinsella, CloudHealth's founder and CTO, told CRN.

The $46 million D Round was led by Kleiner Perkins Caufield & Byers, with participation from Meritech Capital Partners, a late-stage investor with a track record of preparing companies for IPOs.

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Kinsella told CRN this is the right time "to grow as fast as possible."

"There's an opportunity to build a business valued in the multiple billions of dollars if we do everything right," he said.

When first launched, CloudHealth's management platform was only integrated with Amazon Web Services. But the technology has since expanded to encompass all three public hyper-scale providers, including Microsoft Azure and Google Cloud Platform. It also works across on-premises solutions, from VMware to OpenStack and bare-metal infrastructure.

Kinsella said he founded the company in 2012 with the goal to develop what he calls "Gen-3 management."

The first generation of management tools came during the client/server era and were ultimately consolidated by a handful of large vendors. The second generation of the technology saw innovative startups tackling single-point challenges, from application and log management to service desks.

But the next decade will be characterized by tools that must master the multi-cloud and hybrid cloud environments increasingly deployed by modern organizations, with applications and infrastructure that are dynamic, ephemeral, continually changing and with adoption decentralized across organizations.

"As part of that, there will be a handful of big companies that get built here and we're going to be one of those big companies," Kinsella said.

Behind a single pane of glass, CloudHealth offers integrated reporting, integrated recommendations, and active policy management. The design strategy is to span functionality by complementing and extending other vendors; not just cloud infrastructure providers but also configuration management, fault and performance management, application performance, log management and incident management solutions.

"Across that whole span of categories, we make them work together as one product," Kinsella said.

Currently, about one-fifth of CloudHealth's business goes through the channel. But in two years from now, Kinsella expects partners to account for half of his company's revenue.

"We actually see the cloud as one of the biggest opportunities for the channel," he said.

Cloud is enabling business transformation around agility and innovation, Kinsella said, and companies embracing the technology are attaining a real competitive advantage.

"But it's really hard to do. That calls out to the channel opportunity," he said. "That's the market dynamic occurring, and we intend to be there supporting channel partners in what they need."

One of its products is an integrated partner platform that overlays the management consoles, allowing partners to manage customers and even white-label CloudHealth functionality.

Some of the new funding will go "to doubling down with what we've built and increasing the pace of innovation to have the best partner platform for hybrid cloud in the industry," Kinsella said.