VIEO Closes $15M

VIEO Inc. will announce Monday that is has raised $15 million in Series B funding to complete its transition from an InfiniBand software provider to an application infrastructure management company.

The round, which brings VIEO's total funding to around $39 million, was led by RHO Ventures and included investment from the company's original backers, Audax Group, Eyes of Texas Partners, Flagship Ventures, and TL Ventures (see VIEO Snags $4M More).

VIEO will use the $15 million to fund production, certification, marketing, business development, and sales of its AAIM (Adaptive Application Infrastructure Management) appliance, which it plans to ship to beta customers at the end of the first quarter. VIEO expects it to go into production in May and be generally available in July. The company began to shift from being a pure InfiniBand play in mid-2002 (see VIEO Goes Vanilla).

"Clearly, our focus has changed," says Steve Harriman, VP of marketing at VIEO. "We are an AIMM company now."

Ironically, VIEO's move away from InfiniBand comes on the heels of announcements from Dell Computer Corp. (Nasdaq: DELL), IBM Corp. (NYSE: IBM), and Sun Microsystems Inc. (Nasdaq: SUNW) in support of the flagging interconnect technology (see VIEO Jumps to 10-Gig InfiniBand, Server Vendors Hold IB Pep Rally, and Sun Sticks With InfiniBand).Nevertheless, InfiniBand's future is far from certain today, as these vendors have yet to actually ship InfiniBand-enabled servers. VIEO's latest product is at least aimed at a sector that analysts say IT managers will have to spend money on.

Like DataCore Software Corp. and FalconStor Software Inc. (Nasdaq: FALC), VIEO is developing a network-based appliance that enables improved application management by measuring, analyzing, and affecting the servers and storage on which these apps run. VIEO is one of a crowd of companies targeting the $12 billion infrastructure and systems management market, according to Forrester Research Inc.

"In trying to tame their tangles of networks, servers, storage, and software, organizations have spent millions on management frameworks from firms like IBM Tivoli, Hewlett-Packard Co., and Computer Associates International Inc. (CA)