Virtustream, a cloud provider targeting enterprise and government customers, today announced Series B $15 Million funding taking the total venture capital investment to $75 Million. This round of funding is lead by Intel Capital along with Columbia Capital, Noro-Moseley Partners and TDF with the addition of a new investor, QuestMark Capital. The additional funding round will be used to develop their xStream platform along with growth into new geographical areas. This news is interesting to me because I am pushing the idea of federated cloud hard and Virtustream is moving in that direction.
What is xStream platform?
xStream is an interesting platform, offered both as a service and as software, which allows enterprises to adopt cloud at a pace they are comfortable with. Even though cloud puritans don’t like the idea of traditional infrastructure, private cloud and hybrid clouds, they are going to stay for the next few years. Part of the reason is enterprise concerns about cloud computing and relative lack of maturity on the public cloud side. As enterprises are “taught” about the value of public clouds and as the public cloud offerings mature more in terms of offering better transparency, reliability and security, we will be seeing more and more organizations moving their workloads to public clouds. Moreover, not all applications are suitable for cloud. Putting legacy applications on cloud will create more headache than what it can solve. Enterprises will adopt cloud only as they get rid of their legacy software and move towards software architected for cloud. This takes time because of the costs involved in developing newer applications and the investments already made on legacy applications. Each organization will move to public clouds at a different pace. xStream platform is designed to meet this enterprise need and helps them onboard at a pace they are comfortable with. With xStream platform, enterprises will be able select traditional, private, enterprise or public commodity clouds (or any combination of them) . In that sense, it is a pretty flexible platform.
Why I am excited?
First, and foremost, my excitement is not about the funding round. It is their vision for a more federated cloud ecosystem to meet the diverse needs and regulations of world. My definition of federated cloud ecosystem involves heterogenous platforms but as a vendor they will be focussing on federating out their own platform to different geographical locations. It is perfectly understandable because otherwise they must be doing charity rather than business. Having said that my interest lies in one of the acquisition they recently made, Enomaly (previous CloudAve coverage). Enomaly had a platform called SpotCloud (previous CloudAve coverage) which served as a clearing house for excess infrastructure. Virtustream could put this too use along with their xStream platform to set up an exchange where infrastructure services can be bought and sold. I see tremendous potential for a service of this kind focussed on enterprises and if Virtustream can offer this solution, it will put them at the center of federated cloud ecosystem. If my understanding is correct based on the conversation I had with them, they will get there soon.
There are still doubts raised about the emergence of federated cloud but it is not going to happen overnight. Slowly, but steadily, OpenStack is helping service providers transition into cloud providers and this trend is only going to increase. With companies like VMware and Microsoft focussing on service provider market, we are going to see large number of such providers offering infrastructure services from different parts of the world. I see the infrastructure services market to be completely federated in another 2 years but the shift has already started.
- Already awash in cloud cash, Virtustream raises $15M more (gigaom.com)
- Virtualization Startup Virtustream Raises $15M From Intel Capital And Others (techcrunch.com)
- Virtustream buys cloud pioneer Enomaly (gigaom.com)
- Enomaly Buy to Fuel New Virtustream Exchange (pcworld.com)
- SpotCloud Creator Enomaly Bought by Virtustream (datacenterknowledge.com)
- Virtustream Acquires Enomaly, Inc (elasticvapor.com)