CloudHealth, $4.5M in Tow, Looks to Run Networking Playbook on the Cloud

Let’s get the name question out of the way first. CloudHealth Technologies is not a health IT company. It is a cloud infrastructure and analytics startup, aimed at helping software companies manage their business.

Not sure that’s much clearer, but we’ll explain why they chose that name in a minute. Boston-based CloudHealth, a young startup, has emerged from stealth mode today saying it has raised $4.5 million in Series A funding from .406 Ventures and Sigma Prime Ventures.

The company is led by CEO and co-founder Dan Phillips, the former CEO of SilverBack Technologies (bought by Dell in 2007) and former chief operating officer of Concord Communications. The other co-founders are engineering guru Joe Kinsella, formerly of Sonian and SilverBack, and finance expert Dave Eicher, previously with GenArts and SilverBack.

Interestingly, CloudHealth was previously called CloudPercept, but it sounds like Phillips had something to do with changing it. Back in the 1990s, Concord Communications’ product was called Network Health. And in fact, CloudHealth is trying to take lessons learned from the networking boom of the ‘90s and apply them to the cloud.

As Phillips explains, 20 years ago companies were getting networked together, and Cisco and Nortel cashed in on the first wave of network-deployment tools. Then, once corporate networks were up and running, there was a second wave of tools for troubleshooting and repairs. After that came more business-focused offerings, including those from Concord and SilverBack.

Cloud computing is entering a similar third phase, Phillips says. There are a lot of open-source troubleshooting tools for all the software companies running applications in the cloud, but now “infrastructure becomes more of a business concern,” he says.

Here’s why. Software-as-a-service companies depend on cloud computing for their tech infrastructure, including app hosting, development, customer information, and so on. Companies use Amazon, Rackspace, or other cloud providers, but these vendors don’t provide a lot of business insights.

CloudHealth offers what it calls “business performance management” software. That means giving companies the tools to “plan their entire cloud ecosystem,” Phillips says, and “optimize their performance and cost from a business perspective,” whether they are slicing the data by customer, product, department, or what have you.

In particular, CloudHealth customers can do things like figure out their cost per customer in different product tiers; analyze not just computing capacity but also customer data and billing information; and dissect trends over time in IT, finance, and engineering. Phillips refers to that last bit as “long-term trending” of a company’s cloud environment.

“We pull and collect data from the entire cloud ecosystem,” says Phillips. “Our tool produces business reports that [software as a service] companies will use in weekly staff meetings, and in board meetings.”

The startup has a few customers already, and other companies are testing out the software. Phillips is selling to software companies with annual revenues ranging from roughly $1 million to $50 million—the bigger they are, the more critical a management tool CloudHealth will become, he says.

Other companies in cloud infrastructure and tools would include RightScale, Newvem, and (around Boston) Stackdriver, Yottaa, and Cloudant. And, of course, the big guys like IBM, Hewlett-Packard, CA, and Compuware. Yet CloudHealth’s competitors tend to be more focused on system-administrator-level tools or application management, Phillips says.

CloudHealth has seven employees and is looking to hire 15 more in the next 12 months, Phillips says. The company is about to move into office space in the Fort Point neighborhood of Boston.

Whether people will see past (or be confused by) the firm’s name depends on how successful CloudHealth becomes, of course. “As the industry matures, I think people will immediately relate ‘Health’ to that long-term trending,” he says.

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