Vyatta , a Belmont, Calif.-based company that makes an open-source routing platform, has raised $10 million in Series C funding led by Citrix Systems. Previous investors Comcast Interactive Capital, Panorama Capital and ArrowPath Venture Partners also invested in this round of funding. The company had previously raised a total of $18.5 million.
The investment in Vyatta shows that Citrix is losing ground to the VMware-Cisco Systems colossus. Those two companies are becoming stronger players inside the enterprise data center, both from a server and a networking perspective.
As we’ve outlined in the past, virtualization is going to force networking vendors to change. There were two scenarios that we outlined; one was that networking vendors could shift their business and sell to cloud operators — Cisco is doing that with its unified computing efforts.
The other option was for routers, load balancers and firewalls to run inside the “virtual appliances.” Some believe that the routing, blocking and distribution of traffic can be done well in a “cloud environment.” The Vyatta-Citrix relationship falls under this category. Vyatta sells networking software and hardware appliances to enterprises and service providers. Their products are based on the x86 architecture, which can be virtualized using hypervisors such as Citrix’s XenServer virtualization product.
Citrix is a believer in this trend and it recently virtualized its Netscaler platform as part of its efforts to virtualize network resources. While Vyatta is small, it helps Citrix get into the enterprise routing market. For little Vyatta — well, being part of Citrix’s cloud efforts can’t hurt.
Disclosure: Vyatta founder Allan Leinwand is an occasional guest contributor to GigaOM.