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While not disclosing the amount of the investment, Cloud Vertical CEO Ed Byrne said it’s an important vote of confidence given that Citrix is the company behind both Xen, the virtualization foundation of Amazon Web Services (AWS), and CloudStack, an open-source platform that powers private clouds.
Hey guys: Cheap cloud could be cheaper
Byrne said utilization of public cloud resources is not optimal so while the perception is that Amazon EC2 is cheap, it could be cheaper still if people really made sure they’re really using up what they pay for.
Many companies buy, say, reserved Amazon EC2 instances in the AWS US East region, but then their developers launch new instances in Oregon because they’re cheaper, Byrne said. That’s the problem Cloud Vertical and other companies like Newvem and Cloudyn are attacking.
Vendor-backed accelerators on the rise
Citrix is not the only tech vendor in the startup acceleration biz — SAP is doing something similar in Silicon Valley — but SAP’s program focuses specifically on building out the Hana ecosystem, while Citrix looks for interesting startups in the broader infrastructure and cloud services arena. The goal is to help these fledgling companies bridge early seed investments and A Series funding, said Jeremiah Shackleford, who heads up marketing for the Citrix accelerator. It has funded about a dozen startups, most recently, Cumulogic, a Platform-as-a-Service provider.
“We put in a small — maybe $250,000 — investment and also offer the companies office space in Silicon Valley and help with customer development,” Shackleford told me in an interview.
Reed Sturtevant, managing director of Project 11, a Cambridge, MA-based seed investor and a director of TechStars Boston, said the accelerator model is growing because of the changing economics of startups.
“The programmatic approach of an accelerator model is a response to the question of how do you scale investment and mentorship across many companies as the dollar amount needed to validate each new business continues to drop. You can often do with $25,000 today what used to take $500,000 ten years ago, so let’s say you want to apply $1 million to support external innovation, it takes a very different approach to spread that across 20 companies vs. across two,” Sturtevant aid via email.
Come hear more about the deployment and provisioning of public cloud resources from Amazon Web Services CTO Werner Vogels and others at GigaOM’s Structure: Europe in Amsterdam later this month.