More Fuel for the New Database Wars: ParElastic Raises $5.7M

Online, on-demand computing power has transformed the way businesses and everyday people use software and data storage. Just ask techies who had to buy racks of servers just to start their dot-com-era companies, or one of us poor suckers who remembers shelling out for those cardboard-boxed PC applications.

But the formula of seamlessly delivered, constantly morphing and growing software-as-a-service hasn’t bled into every part of the technology world just yet. Take big databases, for instance.

Yes, someone who needs to crunch loads of data can rent online database servers in chunks as they’re needed. But even with market leaders like Amazon’s Relational Database Service, customers have to scale up and down by paying for increments of sizes and performance, says Ken Rugg, CEO of database software startup ParElastic.

“When you order Gmail, they don’t ask you how many CPUs you need and how much memory you need. They’re delivering a service,” Rugg says. But with a Amazon RDS, he says, “You’re effectively renting a server with a database server running on it. You’re not really getting a service.”

That could be changing soon, and ParElastic is among the companies big and small that are hoping to get there ahead of the pack.

Today, the Waltham, MA-based company is announcing that it has raised an additional $5.7 million in private financing to help it hit this target and roll out a “true Relational Database as a Service.”

The investment, led by previous backer General Catalyst Partners along with Point Judith Capital, CommonAngels, and LaunchCapital, is intended to help the small company take the next step from testing its software to building its full-fledged product.

The financing also advances ParElastic’s bid in the emerging competition among startups, particularly in the Boston region, to become players in the next generation of database technology innovation. Other examples include Cambridge, MA-based NuoDB and Newton, MA-based ScaleBase.

These companies are emerging in response to a couple of big computing trends: Along with the aforementioned movement of old-school software and IT infrastructure to flexible online services, companies of all kinds and sizes are staring down the need for much greater number-crunching capabilities.

The big reason is the increasing amount of data being generated by Internet-connected devices and services, which can tell us a lot more about where people are going, what they’re buying, what they watch and read, and much more.

ParElastic’s approach involves a layer of software that runs between a customer’s applications and existing database servers. It’s supposed to give those applications an easier way of treating multiple servers as if they’re one big batch of computing power, making data processing more flexible and efficient.

That phase of the plan is what’s coming with today’s Series A investment, Rugg says. ParElastic has been testing its software in the field with users for several months, and has some early paying customers, including unnamed companies in the social media and e-commerce sectors.

If all goes as planned, sometime early next year ParElastic could have its vision in place, making its customers’ chunky old database infrastructure operate more like a fluid software application, and perhaps even paying only for what they use.

“The database is kind of the last tier where that is really not possible,” Rugg says. “We think that’s really the last mile.”

That will take some more people, of course. Rugg says the company plans to use the new cash to hire beyond its current roster of about 10 people, mostly in product development.

So the new database infrastructure wars rage on—and I guess that also means there’s still some Series A funding out there for startups, particularly if you’re focusing on some nitty-gritty IT technology problems.

“I’m a first-time CEO, so I’m going through this process for the first time. I’ve got friends who say, ‘Yeah, it’s terrible these days,’” Rugg says. “I haven’t really seen it that way.”

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