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Cloud startups attract venture interest
By siliconindia   |   Thursday, 07 May 2009, 21:44 IST   |    5 Comments
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Cloud startups attract venture interest
Bangalore: Startup companies providing complementary services for the Internet 'cloud' are increasingly being observed by venture capitalists (VCs) for opportunities to invest in them. Many VCs are betting that the future of the cloud - the hosting of services and data on remote computers - will become increasingly popular as corporations look to slash costs and juggle complex data, reported Yahoo. Experts say these start-ups will work alongside the likes of Google, Amazon.com and Microsoft, which say they are investing in this concept but warn it is a nascent, rapidly shifting arena. "This is the Wild West. This happens every time we get a significant new technology. You get a group of companies that makes it simpler," said James Staten, an analyst with Forrester Research. As companies begin to rely on the cloud to add capacity and manage resources more efficiently, VCs are bankrolling the start-ups that can help them do it safely and easily. For instance, Elastra is a company which designs and provides solutions to help big corporations manage data center resources remotely, while Rightscale offers server capacity for smaller start-ups. Companies such as Engine Yard, Longjump, and even Google apps and Microsoft's Azure provide a platform to help programmers write, store, run or distribute their applications. Kevin Harvey, general partner of Benchmark Partners, said his venture capital firm invested in Rightscale and Engine Yard because they provide essential services. Amazon joined with Benchmark in helping fund Engine Yard, which has now secured $18.5 million in financing. According to Harvey, Rightscale's primary value proposition to customers is helping them get their applications up quickly and scale them quickly. Those are the kinds of things that make cloud adoption easier and faster. Meanwhile, Elastra helps larger corporations to manage data center resources. Running a data center requires programmers to write all kinds of code, all the time, to deploy applications. Elastra tries to rationalize the process and allow it to be done remotely. For example, it is developing approaches for 'cloud bursting,' the idea that companies can use remote servers for overflow work.

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