Zeus Scores $6M

U.K. data center startup Zeus Technology, which made its name selling Web server software in the 90s, today clinched $6 million in funding as it attempts to break into the U.S. traffic management market.

The financing, which follows a million-dollar round last February, was secured through Scottish Equity Partners and Cazenove Private Equity.

Steve Palmer, the companys vice president of marketing, told NDCF that the money will be used to drive sales of the Zeus Extensible Traffic Manager (ZXTM) software. Shipping since last April, ZXTM includes traffic management, application acceleration, XML processing, security, and SSL offload features. The company also took the wraps off an entry-level version of the software last week (see Zeus Expands ZXTM Family).

To support these products, the company will be expanding its 30-strong workforce. “We’re deep into the process of adding bodies,” says Palmer. “We expect to be 40 [strong] by the end of this year and maybe 50 or 60 by the end of next year.” New hires will be split between software development and sales and marketing, he adds.

But, like many a startup, the company needs to boost its presence among OEMs and resellers. The Cambridge, U.K.-based firm has already racked up a number of reseller agreements, namely with Indus Corp. in the U.S. and, over in the U.K., with Sun Microsystems Inc. (Nasdaq: SUNW). Zeus is now in OEM and reseller discussions with a number of vendors in California, says Palmer, and the company is looking to open up an office there.Developing strong routes to market will be crucial for Zeus, which faces some stiff competition from established vendors in this space, such as Radware Ltd. (Nasdaq: RDWR) and F5 Networks Inc. (Nasdaq: FFIV).

Another startup, NetScaler Inc., has also been getting plenty of attention for its full-featured appliance technology (see Top Ten Private Companies).

Perhaps prompted by such intense competition, Zeus’s next big move is to expand into the appliance space. German reseller Pyramid Computer has already built the ZXTM technology into a range of devices, which will be officially launched at this week’s CeBIT tradeshow in Hanover, Germany. These include the ZXTM 2000, an entry-level load balancer appliance based on a single Advanced Micro Devices (NYSE: AMD) Opteron chip. Two higher-end appliances, the 5000 and 7000, are dual-processor devices.

So, why develop an appliance? “It’s a lot easier for people who are used to Layer 3 or Layer 4 switches,” says Palmer. It’s just a case of turning the switch on at the back and configuring it, he adds.

Zeus was started out of a bedroom at Cambridge University by students Damian Reeves and Adam Twiss back in 1994. Reeves remains involved with the company as CTO, although Twiss moved on to become the CEO of another Cambridge-based startup, Saviso.By November 2001, when it was still a Web server software vendor, the company had raised $17.7 million from a range of institutional investors.

Palmer confirms that Zeus will continue to sell its Web server software, although this now accounts for only 25 percent of the company’s revenues. ZXTM, on the other hand, makes up around half of Zeus’s revenues, with the remainder coming from consulting.

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