Virtualization startup eyes European markets and takes aim at Egenera

February 10, 2007

3 Min Read
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Server virtualization startup Scalent has picked up $15 million in Series C funding as the vendor looks to expand into Europe and maybe tap into demand from the likes of Google and Amazon. (See Google Groans Under Data Strain and Follow the Amazon.)

The round, which brings the startup's total funding to $37 million, was led by Credit Suisse. Hummer Winblad, JK&B Capital, and Pequot Capital also took part.

Most of Scalent's 40-strong workforce are in the U.S., although Kevin Epstein, the vendor's vice president of marketing, says the Series C will help establish a foothold on the other side of the Atlantic. "We don't have as formal a presence in Europe as we would like -- we need to scale up our sales operations," he explains.

The exec refused to reveal exactly how many new staff are coming on board, and admits that the Palo Alto, Calif.-based vendor has not yet decided where in Europe to open offices.

Scalent's flagship offering is its Virtual Operating Environment (V/OE) software. V/OE, which runs on Intel X86 or AMD-based machines, installs an agent on each physical server, and according to Epstein, can shift the server infrastructure from one part of a data center to another. This could mean, for example, moving a server's operating system, network IP addresses, and storage HBA data over to another server for disaster recovery purposes.The exec told Byte and Switch that Scalent has between "10 and 50" customers. Most of these, he says, are large financial firms, although the startup has also racked up some "high-end" Internet companies. Epstein was tight-lipped when asked whether Google is one these early adopters, although he did confirm that Credit Suisse and Ameriquest Mortgage are amongst its clients.

The vendor is also picking up technology partners at a clip. Last year Scalent unveiled a partnership with IBM to run V/OE on BladeCenter and System X hardware, as well as announcing compatibility with Sun's Solaris 10 operating system and SunFire servers. (See Scalent Readies V/OE, IBM Bolsters Blade Strategy and Sun Updates Solaris 10.) The startup also clinched a deal with QLogic to make V/OE compatible with the storage specialist's HBAs and routers. (See Scalent, QLogic Team.)

Other virtualization vendors are also part of this push. Scalent, for example, already works with VMware's ESX server and virtualization software from XenSource. "ESX server is [just] another OS," explains Epstein, adding that the startup can shift this from server to server in the same way as it would the Microsoft or Linux operating systems.

That said, Scalent is up against a well-established rival in this space in the shape of Egenera. (See Egenera OEMs XenSource, US Census Picks Egenera, and Egenera Wins in Shanghai.) Although both vendors are targeting the virtual server market, Scalent offers a software-only solution whereas Egenera also touts server hardware. (See Egenera Overhauls BladeFrame.)

Despite Epstein's chest-beating, Egenera currently has the edge over Scalent in terms of both customers and money. (See Egenera Seeks IPO and Egenera Waits on IPO.) Last summer, for example, Egenera raised $26 million in a Series E round, bringing its total funding to $150 million, and the vendor's customer list numbered 135 firms. (See Egenera Lands More Funding, Egenera Raises $26M , Egenera Seeks IPO, and Egenera Waits on IPO.)Undeterred, Epstein told Byte and Switch that he does not foresee another funding round for Scalent anytime soon. This latest round "should carry us for a substantial distance, at this point there are no plans for additional venture funding," he says.

Next up for Scalent is the next generation of V/OE, either late this year or early next year. This may also include support for Virtual Iron's virtualization software, although Epstein was unwilling to give too much away. (See Virtual Iron.) "We have certain things that we're working on that we can't talk about," he says.

James Rogers, Senior Editor Byte and Switch

  • Credit Suisse

  • Egenera Inc.

  • Google (Nasdaq: GOOG)

  • Hummer Winblad Venture Partners

  • JK&B Capital

  • Microsoft Corp. (Nasdaq: MSFT)

  • Pequot Ventures

  • Scalent Systems Inc.

  • VMware Inc. (NYSE: VMW)

  • XenSource Inc.

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