More Cash for Hot New Cloud Startup, VMOps

When it comes to cloud computing, the big discussion these days is around private clouds. Large companies are trying to figure out a way to build their own, sometimes seeking help from VMware (s VMW), Cisco Systems (s CSCO) and others. Even Microsoft (s MSFT) views this as the next big technology oil field and has developed Azure to profit from it. Of course, on the other side are upstarts — many of them — that want to sell their own solutions to potential buyers.

Two-year-old startup VMOps of Cupertino, Calif., has developed software that in essence allows companies to deploy an equivalent of Amazon’s (S amzn) elastic computing (EC2) service using commodity hardware to build their own private cloud. Furthermore, VMOps allows its customers to use any type of virtual machine — Microsoft’s HyperV, Xensource, VMware — and any operating system software for a VMOps-based private cloud.

VMOps was started by Sheng Liang, former VP of engineering at SEVEN Networks. Liang also sold his application firewall company, Teros Networks, to Citrix (s ctxs), and worked on the team that developed the Java Virtual Machine.

VMOps has two main products: VMOps Cloud Management Server and VMOps Multitenant Hypervisor. And according to my sources, it’s getting a lot of attention from potential customers, which include mid-tier telecom companies such as XO Communications and Tata Communications. Others are also said to be kicking the tires on its products.


This early traction helps to explain why the company is in the process of closing a $11 million Series B round, which was apparently led by Index Ventures and includes investments from previous investors Satish Dharmraj of Redpoint Ventures and Nexus Venture Partners.

Index Ventures’ is the new investor in this round, with Mike Volpi, formerly of Joost and Cisco, leading a $6.5 million infusion as part of it. I wonder if Volpi’s old carrier connections are helping open doors for the company at telcos and data centers. VMOps is said to have raised a total of $17.6 million in prior two rounds of funding.

One thing is for sure: That pile of cash gives VMOps enough cushion to fine-tune its offering as it starts to compete with the likes of VMware’s vCloud and Eucalyptus, for this is going to be a fiercely contested marketplace. Eucalyptus, which raised $5.5 million in April 2009, is using its open source roots to find a role for itself. VMOps, on the other hand, is betting that its Swiss approach to virtual machines and operating systems is going to give it a leg up, especially against the deep-pocketed VMware.

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