SWsoft Catches Virtual Wave

Chalk another one up. Startup SWsoft is the latest firm to benefit from the growing interest in technology that separates logical computing from its physical infrastructure. The Herndon, Va.-based firm has announced $12.4 million in Series A funding (see SWsoft Gets Funding).

SWsoft sells a range of server automation and virtualization software. It's been in existence since 1997, but this is the first time that it has turned to the VC community. Kurt Daniel, the companys managing director for marketing and business development, says SWsoft was originally financed by its founder and CEO, Serguei Beloussov, and has since been funded by customer revenues.

In addition to setting up SWsoft, Beloussov also founded Solomon Software, Infra Telesystems, and Acronis. Since 1999, however, his main focus has been SWsoft, which reached profitability around two years ago.

With interest in virtualization picking up, SWsoft is looking to grow along with the industry. “We’re going to hire more people and potentially do some acquisitions, if they are appropriate,” says Daniel. He adds that any acquisitions would fall within the server automation and virtualization space.

For months, that space has been a hive of activity. Cisco Systems Inc. (Nasdaq: CSCO) stumped up $250 million for startup Topspin Communications Inc. back in April. Just weeks after entering the market, fellow startup Azul Systems is already racking up customers. Meanwhile, established players such as VMware Inc. are launching new technology (see Cisco Takes On Topspin, Azul Aces First Customers, and VMware Intros New Tech).Analyst firm IDC has noted a growing demand for virtualization from users, evident in more spending on midrange servers with virtualization features (see IDC Updates Server Figures).

With input from its VCs, SWsoft hopes to be part of it all. Leading the round were Insight Venture Partners, Bessemer Venture Partners, and Intel Capital.

Daniel says SWsoft will add around 100 employees to its existing workforce of 500 around the world. The new vacancies will be primarily in areas such as sales, marketing, and business development. SWsoft is also planning to launch a “major new version” of its Virtuozzo, its flagship virtualization software, early in the summer, according to Daniel.

— James Rogers, Site Editor, Next-Gen Data Center Forum