CloudSwitch Doubles Venture Pot, Names CEO; Startup Wants to Make Cloud Computing Safe and Simple for Enterprises

Within a few years, says John McEleney, sheer economics will force most companies to stop buying their own computer hardware and offload some or all of their processing and storage to the cloud. But at the moment, figuring out which business applications can safely be transferred to the cloud—meaning pay-as-you-go, off-premises storage and computing power—is “scary” and “daunting,” McEleney argues.

And that’s the opportunity that his company, Burlington, MA-based CloudSwitch, is moving to address. The young startup’s president and CEO says CloudSwitch is about “making it easier for enterprises to use the cloud—as easy as holding a crayon in your hand.”

McEleney has been leading the company since March, but his appointment was only revealed yesterday, in a press release that also detailed the close of CloudSwitch’s $8 million Series B funding round. Commonwealth Capital Ventures led the round, with support from Matrix Partners and Atlas Venture, who collaborated on the company’s $7.4 million A round this January. (All three firms are in Waltham, MA.) McEleney, the former CEO of Concord, MA-based 3-D modeling company SolidWorks, spent 2008 as an executive in residence at both Atlas and Commonwealth.

Flush with cash—the A round alone would have lasted CloudSwitch until the second quarter of 2010, McEleney says—the 18-employee startup now has to deliver on its vision of a software “appliance” that helps to eliminate the hurdles that are keeping companies from utilizing cloud services. Neither McEleney nor CloudSwitch founders Ellen Rubin or John Considine are saying much yet about the nature of that software, except that it’s designed to extend the applications that currently run inside corporate data centers into the cloud without added complexity or risk. They also emphasize that while they’re calling the product an appliance, it’s entirely software-based—unlike the appliances sold by Netezza (NYSE: NZ), the Marlborough, MA data warehousing company where Rubin was formerly chief marketing officer.

Rubin, whose title at CloudSwitch is vice president of product, says the company’s focus is on “solving problems that would make it difficult for a CIO to take advantage of the cloud…issues like security, simplicity, and being able to take what you have already and not make changes to it, but still be able to use the cloud.” CloudSwitch also says its software will help companies avoid “lock-in,” or the difficulty cloud users experience switching from one provider to another once they’ve customized their applications and data for a particular cloud environment, such as Amazon Web Services or Google App Engine.

From all appearances, in other words, CloudSwitch seems set to become one of the first New England-based providers of cloud computing tools, or what’s being called “infrastructure as a service.” But they’re not like Amazon, which is actually providing cloud infrastructure, or Hopkinton, MA-based EMC (NYSE: EMC), which is also developing cloud services. And they’re not like Stylefeeder, Pixily, or Sonian, to name a few examples of local companies whose Web-based services run on the Amazon grid. Rather, CloudSwitch is designing its software to help regular companies move their existing applications into the cloud, without having to rewrite them to work in cloud environments.

Rubin—whose presentation during the “Xpo” portion of last week’s Xconomy Summit on Innovation, Technology, and Entrepreneurship won second place in a field of four—says the company will keep the exact details about its product under wraps while it’s still in what she calls its “pre-beta” phase. All that’s clear so far is that CloudSwitch hopes to provide a bridge between traditional data centers and cloud services. “It’s helping enterprises extend what they’ve got into multiple cloud environments so it doesn’t feel like a separate environment,” says Rubin.

The company will unveil more details of its product later this year, McEleney says. Initially, CloudSwitch will target small- to medium-sized enterprises and divisions within large companies as customers, “for the simple reason that there is less bureaucracy and they will be able to move faster and adopt the solution quicker,” he says. Over the long term, he says, “the market will be all sizes of companies. But to become the default standard takes a lot of sales cycles.”

McEleney wouldn’t detail CloudSwitch’s roster so far, except to confirm a few names listed yesterday in a report by Scott Kirsner (who was the first to cover McEleney’s appointment and the $8 million funding round). Those include former EMC software architect Fred Oliveira, former EMC and BladeLogic engineer George Moberly, and former RSA engineer Sean Henry.

McEleney says he knew when he joined Atlas that he wanted his next venture after SolidWorks to be based around an important “platform shift.” “Back at SolidWorks, we were primarily a desktop-based application, and when the Internet shift was happening I felt like a kid with his nose pressed up against the glass,” he says. “With the next major platform shift, I wanted to jump straight into the middle. And it’s very clear that the cloud is a major platform shift. And that’s when you have business model shifts, and huge opportunities come about.”

But it wasn’t until McEleney was asked to do some due-diligence research on CloudSwitch that he became directly interested in the company. “John Considine and Ellen are just great people, and Ellen has done such an amazing job of building a great team,” he says. “So the team and the dynamic was right, and Atlas ended up doing the A round, and I joined [as CEO] on March 30.”

Asked what niche of the infrastructure-as-a-service business CloudSwitch hopes to occupy, McEleney bridles a bit.

“The word ‘niche’ tends to have the connotation of being small,” he says. “The cloud isn’t a huge market today but it will be. There is a natural digestion process as companies figure out what applications they can move to the cloud. I like things that are obvious and it’s obvious to me that the cloud is the next major platform. I don’t think anybody knows when it’s going to hit the mainstream—but it’s clear that this macroeconomic environment is a forcing function that will accelerate the shift.”

Wade Roush is a freelance science and technology journalist and the producer and host of the podcast Soonish. Follow @soonishpodcast

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2 responses to “CloudSwitch Doubles Venture Pot, Names CEO; Startup Wants to Make Cloud Computing Safe and Simple for Enterprises”

  1. rodgerwms2 says:

    How is the different from Appzero?