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Summary:

VSS Monitoring, a network traffic monitoring company, has taken $20 million in funding from Battery Ventures. The funding was the first for the company which was founded in 2003 and the funding will be used for R&D and company expansion. Its investors call it a unicorn.

VSS Monitoring, a network traffic monitoring company, has taken $20 million in growth equity from Battery Ventures. The funding was the first for the company — founded in 2003 — and it will be used for R&D and to accelerate the company’s expansion. What’s noteworthy is that until this point, VSS had built network monitoring software and hardware and sold it for five years without taking venture capital.

“This is a unicorn company,” said Neeraj Agrawal a general partner at Battery Ventures. “How often do you find a company that’s this old and shipping product in the middle of Silicon Valley with no VC investment?”

However, VSS is now at the helm of several different trends in the data center. Virtualization is magnifying the amount of traffic coming from a single server and creating network bottlenecks, while the increase in all-IP services makes it more difficult to monitor the different types of traffic flowing through the networks because it all begins to look the same. VSS offers what it calls intelligent distributed traffic capture to monitor networks and enforce security and network performance polices.

These sorts of products are likely to become more essential as enterprises rely on everything from software to actual processing power delivered as a service. If everything is stored in the cloud, ensuring that information can move within the cloud and then to a user in a certain amount of time is critical: hence Battery’s excitement over VSS. I wrote about this issue all the way back in 2008, and given this deal and CA’s buy of NetQoS last year — as well as Compuware’s buy of Gomez a month later – it looks like Battery’s making a bet that could pay out soon.

Related GigaOM Pro research (sub req’d): For Open Cloud Computing Look Inside Your Data Center

By Stacey Higginbotham
  1. I read this article this morning and I have to say I’m pretty disappointed. I think VSS deserves a little more credit than this was given. As a reader, I’d really prefer to hear what they plan to do with their new venture capital to enable cloud technologies. Are they going to reinvest to develop a virtual tap similar to Network Instruments? Or are they focusing on handling bundled 10Gbps links? 40Gbps? Better filtering capabilities? I’d be interested to find out which direction they’re heading.

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  2. It is very encouraging to see VC interest in network technologies. After all it is the Network which makes Cloud computing possible. Intel master minded a great campaign to make the CPU the most important aspect of computing. One can argue data is the most important aspect and hence storage is the heart of computing. The network has been a key factor in the flattening of the world and perhaps is now the most important aspect of computing. A few years ago it was critical to get the Office application going on a personal computer to be productive. Today, getting connected to the network is probably more important.

    The top inhibitors to adoption of cloud computing are security and performance. If companies like VSS can embed intelligence in the network to improve security and guarantee performance, it will expedite the adoption of cloud solutions.

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