Eucalyptus rakes in $30M, keeps open cloud battle interesting

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Cloud computing startup Eucalyptus has snagged $30 million in Series C funding for its open-source software that lets users build private clouds akin to the Amazon Web Services public cloud. Institutional Venture Partners (IVP) led the new round, along with contributions from existing backers Benchmark Capital, BV Capital and New Enterprise Associates. Total funding for Eucalyptus is now $55.5 million.

The cash influx comes just weeks after Eucalyptus signed an alliance with public cloud giant Amazon Web Services, a move that many said bolstered Eucalyptus’s open source credibility in the face of competition from the popular OpenStack project. The conventional wisdom is that Eucalyptus, whose software uses the Amazon APIs, gives Amazon a toehold in those business accounts. In return, Eucalyptus can bask in the glow of Amazon’s public cloud success and attract customers that want to build their private clouds with AWS compatibility baked in.

Eucalyptus CEO Marten Mickos

Perhaps it’s not an accident then, that the Eucalyptus funding news comes during the OpenStack Spring Conference. Eucalyptus CEO Marten Mickos called OpenStack — backed by a foundation that includes Rackspace, Hewlett-Packard, Dell, IBM and Red Hat  — “wildly overhyped.”

“Some people think that large corporations’ membership in a foundation is a sign of success, which it isn’t. They’re doing some great things, but when we look at the competition, we see VMware and we think that’ll be true for years. After VMware, the next [platform] we compete with is CloudStack,” Mickos said. CloudStack is now owned by Citrix, an OpenStack backer that backtracked and is now pushing CloudStack as an OpenStack competitor. 

In his view, the landscape includes “OpenNebula, which is government focused; OpenStack and CloudStack, which are more service-provider focused; and there’s Eucalyptus, which is enterprise focused,” he said.

But they are all open-source cloud platforms that will compete with each other. “Look, this is very difficult software to build,” Mickos said, “let the world decide.”

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