InovaWave Clears Fresh Funding

Virtualization startup clinches $7.2 million Series B and sets its sights on VMware

July 19, 2007

4 Min Read
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Startup InovaWave has picked up $7.2 million in Series B funding and a new CEO as it rolls out its plan to ride the VMware wave. (See InovaWave Secures $7.2M and InovaWave.)

The round, which was led by Matrix Partners and included existing investor Silverton Partners, brings InovaWave's total funding to just over $9 million. (See InovaWave Secures $2M.) Former company president and Tivoli exec Chris Ostertag has also taken over the InovaWave reins from founder Terry Ferose, who now becomes the startup's vice president of strategy and operations.

The CEO changeover was a "mutual" decision between the two execs, according to Ostertag, who says Ferose was keen to re-direct his energies toward technology: "It lets him focus on where his interests lie."

InovaWave is also planning to extend its flagship DXTreme software, which it touts as a way for firms to boost the number of virtual machines (VMs) running on a physical server. InovaWave can increase the number of VMs from four to eight on a typical server, according to Ostertag.VMs are essentially pieces of software that let users run separate applications or even operating systems on the same piece of hardware. DXtreme creates an individual I/O channel for each VM. Each channel transfers data directly to a virtual server. This process reduces the amount of memory needed by each virtual machine, enabling users to deploy more VMs on a single piece of hardware.The initial version of DXtreme, unveiled last November, is aimed at firms running Microsoft Virtual Server. (See InovaWave Launches DXtreme.) A prototype version targeted at users of VMware's ESX Server was rolled out earlier this year and will be officially unveiled at September's VMworld event. (See VMware Eyes Enterprise, Microsoft and VMware Unveils Upgrade.)

But getting traction in the virtualization market could be easier said than done. VMware may be the market leader in this space, but other vendors such as XenSource and Virtual Iron are increasingly making their presence felt. (See IDT, VoicePump Partner on ADSL and Virtual Iron Dangles iSCSI Savings.) Today, for example, XenSource revealed that it had reached the 500-customer mark for its virtualization software, and Virtual Iron has been hard at work forging alliances of its own. (See XenSource Exceeds 500 Customers, Virtual Iron Announces Agreement, and Compellent, Virtual Iron Team.)

Ostertag says that InovaWave plans to cozy up to more vendors than just Microsoft and VMware. "We see no reason not to find more vendors," he explains, adding that startup is in a role "similar to Switzerland." Still, though the Austin, Texas-based firm plans to work with XenSource and Virtual Iron at some point in the future, there is no specific roadmap in place for this, according to the exec.

InovaWave is not the only startup attempting to cash in on the rise of virtualization. Kidaro, for example, is also looking to exploit VMware and Microsoft products, although its efforts have so far been focused on the desktop space. (See Kidaro Secures $10 Million.)

Despite a flurry of activity around virtualization, InovaWave also has its work cut out wooing users frustrated by the realities of the technology. Some IT managers have already voiced their concerns about server virtualization, citing scalability issues and the need for improved hypervisor technology -- the key element that lets multiple operating systems run on a single piece of hardware. (See Wall Street Virtually Guarded.)A recent report from the Storage Networking Industry Association (SNIA) End User Council also cited virtualization as a relatively immature technology. (See Users Blast Vendors in SNIA Survey.) Other users have expressed security concerns and highlighted mixed results with server virtualization. (See Vendors Push Virtual Security, and CA Cites Virtualization Challenges.)

The new InovaWave CEO acknowledges these concerns. "I agree with what they are saying completely," he says, adding that InovaWave is currently working on systems management and security technology tied to virtualization. "We don't have a launch date for that," he says. "Maybe sometime next year."

The Series B round will also be used to bolster the 20-strong InovaWave workforce. "Our plan is to go up to about double that size by the end of the year," says Ostertag, adding that the new recruits will be in sales, marketing, R&D, and support.

InovaWave has so far managed to rack up 18 customers for its software, according to Ostertag, although only one of these, Austin, Texas-based software development firm NovusEdge, has been made public.

James Rogers, Senior Editor Byte and Switch

  • InovaWave Inc.

  • Kidaro

  • Matrix Partners

  • Microsoft Corp. (Nasdaq: MSFT)

  • Storage Networking Industry Association (SNIA)

  • Virtual Iron Software Inc.

  • VMware Inc. (NYSE: VMW)

  • XenSource Inc.0

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