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VMTurbo trousers $7.5m to bring Adam Smith's hand to more clouds

Gearing up engineering and sales for a future hybrid world

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Adam Smith-loving cloud biz VMTurbo has secured $7.5m in C-round funding from venture capitalists Globespan Capital Partners.

That makes for $25m in funding in three rounds, with the second round hitting in November 2011 when Bain Capital Ventures and Highland Capital Partners kicked in $10m. The company did not announce details of who participated in the round of funding, but it was worth $7.5m if you do the maths.

VMTurbo has a clever cloud management tool which uses an economic engine that simulates a real-life market, complete with supply-and-demand forces for computing, storage, and network capacity to allocate resources efficiently.

Derek Slayton, vice president of marketing at VMTurbo, tells El Reg that VMTurbo did not need the money, but had the opportunity to nab the cash and accelerate some of its development and sales efforts.

This time last year the company had 60 paying customers for its Operations Manager tool; it now has over 350. Revenues tripled last year to $8.5m and are forecast to double this year to $17m. And while companies like VMTurbo are perpetually discussed as acquisition targets, VMTurbo is playing hard to get - as it has all along.

"We are selling our product fast enough that we don't have to worry about being acquired," says Slayton.

The company has secured partnership deals with the Virtual Computing Environment partnership between Cisco Systems and EMC and storage array maker NetApp, and it would not be surprising to see VMTurbo try to push into the tier one system makers to get its economic scheduling engine added to their own server virtualization and cloud control freaks.

If other management tool providers try to copy VMTurbo's homework, the company has just been issued two patents by the United States Patent and Trademark office which covers the economic abstractions in the policy engine that drives the Operations Manager tool and how it explicitly applies to the management of IT environments. (We detailed how the Operations Manager tool works here when the 3.3 release came out.)

Operations Manager can manage virtual machines running atop VMware's ESXi, Microsoft's Hyper-V, Citrix System's Xen, and Red Hat's Enterprise Virtualization (KVM) hypervisors and also plugs into the CloudStack cloud controller from Citrix and the vCloud controller from VMware.

Shmuel Kliger, VMTurbo CTO and one of its founders, says that the company is looking at plugging into the OpenStack cloud controller, and is also looking to hook Operations Manager into virtualization tools for networks and storage.

Further out, VMTurbo knows that it has to support the allocation of virtual machines to the Amazon Web Services, Rackspace Cloud, and Windows Azure clouds, and it will eventually do this – and the funding it just received will help pay for this work.

Kliger says that it may demonstrate how to do this next year, but probably not this year because the customers that VMTurbo is selling Operations Manager to are not yet ready for hybrid clouds. They are not ready technically, in that their applications are not portable across their internal infrastructure and public clouds, or emotionally, in that they are ready to trust their applications to the public cloud.

"When the market is ready for hybrid cloud, we will have our product ready," says Kilger.

In addition to the new funding from Globespan, VMTurbo says that it has just hired Chris Reisig to be vice president of worldwide sales. Reisig comes to VMTurbo from Veracode, a supplier of cloud security software, where he helped quintuple revenues in the three years he was there.

Before that, Reisig spent two years at Kiva Systems, a provider of distribution center management software, where sales doubled, and prior to that he was at Endeca (eaten by Oracle last year) for seven years where he ran the sales operation and helped quintuple sales over that time.

A company the size of VMTurbo is what Reisig knows how to grow, and that is what VMTurbo CEO Louis Shipley, who used to be general manager of data center and cloud products at Citrix, is counting on. ®

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