San Jose-based Cirtas emerged from stealth back in September 2010 with a $10 Million (€7.86 Million then) Series A funding round, their novel Bluejet hardware appliance, and the backing of Amazon.

Today they’re back, with a new CEO and another $22.5 Million (€16.6 Million) in the bank. The Series A investors — New Enterprise Associates, Lightspeed Venture Partners and, unusually, Amazon — are joined by Shasta Ventures and Bessemer Venture Partners for a Series B round that positions the company for some rapid growth.

Cirtas’ Bluejet Cloud Storage Controller is a hardware appliance, deployed in the data centres of medium and large enterprises to simplify the task of integrating existing on-premise Tier 2 and Tier 3 storage with disparate Cloud-based solutions such as Amazon’s S3, EMC Atmos, Iron Mountain and AT&T’s Synaptic Storage as a Service.

Talking ahead of today’s announcements, new CEO Gary Messiana suggested that Cirtas’ decision to deliver a hardware appliance rather than a software-based solution reflects their deep understanding of both their customers and the sales channel. Messiana is not the first to suggest that buyers of enterprise storage are a conservative bunch, and he’s certainly not criticising that conservatism; when business continuity depends upon the decisions you make and the systems you buy, you’re hardly going to take unnecessary risks, now are you? A piece of physical hardware that you can see, touch (and even hug) delivers an element of familiarity that appears to appeal to enterprise-class customers taking the first steps to leverage Cloud-based storage within their existing solutions portfolio. With Bluejet, Messiana suggests, control continues to reside inside the data centre. The Cloud provider(s) to which the appliance directs data are simply (dumb?) utilities upon which the enterprise may choose to draw in a manner abstracted by Cirtas’ technology. A hardware solution also suits the channel-based (rather than direct sales) model by which these companies tend to buy. As Messiana notes,

“[much of] the money changes hands in the channel… and [channel partners] know how to sell tin.”

Formerly an entrepreneur in residence at Series B participant Bessemer, Messiana talks persuasively about the clarity of proposition and go to market strategy that drew him to Cirtas. Drawing upon pre-Bessemer experiences as CEO of traffic optimising Netli (acquired by Akamai in 2007), Messiana argues that the shift off-premise makes expertise in moving data just as critical as the data storage skills of incumbents. Might Akamai, Limelight and their ilk make inroads into this market, at the expense of EMC, HDS, 3Par et al, I wonder?

In storage as in so much else, big incumbent enterprises are very different from smaller or younger companies. Whilst startups and SMEs might be quick to embrace entirely virtual solutions — often starting in the Cloud rather than migrating to it from elsewhere — the ‘multi-billion dollar corporations’ served by Cirtas will almost inevitably follow a very different path. Across Pharma, HR, manufacturing, publishing, insurance and finance, Messiana reports that customers with market caps of $500 Million – $10 Billion and more are flocking to the company.

So why take more VC money, so soon, and dilute the company? Messiana insists that “plenty” of the initial $10 Million is still in the bank, and that VCs were falling over one another in their enthusiasm to invest. The deal was apparently closed rapidly, with an aggressive valuation that sees “minimal dilution” whilst giving Messiana the cash to expand sales, support, and other areas of the company.

Cirtas would appear to be off to a good start, but it would be dangerous to be complacent. The company is not alone in seeing hardware as a way to encourage enterprises toward the Cloud, and there are plenty of software-based cloud storage gateways waiting for the opportunity to demonstrate their capabilities as those conservative CIOs become more willing to trust the Cloud. And then there’s Amazon. What might they do next?

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“EUCALYPTUS — Elastic Utility Computing Architecture for Linking Your Programs To Useful Systems — is an open-source software infrastructure for implementing Elastic/Utility/Cloud computing using computing clusters and/or workstation farms. The current interface to EUCALYPTUS is interface-compatible with Amazon.com’s EC2 (arguably the most commercially successful Cloud computing service), but the infrastructure is designed to be modified and extended so that multiple client-side interfaces can be supported. In addition, EUCALYPTUS is implemented using commonly-available Linux tools and basic web service technology making it easy to install and maintain.”

Since then, we’ve seen EUCALYPTUS embraced by Sun Microsystems in their Cloud announcements and potentially downloaded to millions of machines around the world as part of the latest update to Linux’s popular Ubuntu distribution.

Today the UCSB research project takes the next step, announcing a successful Series A investment round led by Benchmark Capital that moves the team out of the University and onto a professional footing with $5.5 Million to spend. Project Director Wolski becomes CTO, with Woody Rollins as CEO and Matt Reid as VP Sales & Marketing rounding out Eucalyptus Systems‘ fledgling management team. Wolski reports that the entire UCSB development team is moving across to the newly capitalised company, which is licensing IP from UCSB in return for an undisclosed equity stake. Benchmark’s Kevin Harvey takes a seat on the Board, which is Chaired by former AOL Europe CEO Andreas Von Blottnitz.

Wolski is quick to stress that Eucalyptus Systems is an open source company; there is no intention to start charging for software that is freely available for download today, and this will be actively maintained and developed moving forward. A point release is expected ‘in about a week’ to resolve minor issues with respect to Ubuntu 9.04, and version 1.6 of Eucalyptus will follow ‘in 6-8 weeks.’

Speaking of the company’s proposition to new customers, Wolski suggests that

“Eucalyptus Systems will enable businesses of any size to leverage their own IT resources to get the benefits of cloud computing without the concerns of lock-in, security ambiguity, and unexpected storage costs that can be associated with public clouds.”

Interestingly, Wolski describes the revenue model traditionally employed by companies seeking to make money from open source as no more than a way of boot-strapping Eucalyptus Systems toward their real goal. Rather than simply concentrating on the provision of for-profit support and consultancy, Wolski has his sights set on the sale of new Eucalyptus-powered software solutions directly addressed to Enterprise customers. It’s not yet clear whether these solutions will be SaaS offerings or for on-premise installation, but Wolski is confident that the company’s early customers will begin to receive their new software during the third quarter of 2009.

Although best known for providing an on-premise equivalent to Amazon’s Elastic Compute Cloud (EC2), Wolski stresses that the Eucalyptus architecture is API agnostic and could be extended to emulate other Cloud solutions relatively easily. This, allied with Eucalyptus’ industry-leading support for both the KVM and Xen hypervisors, raises the prospect of enterprise customers integrating their own (Eucalyptus powered) internal Cloud with different public Clouds, seamlessly and at will.

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• Karmic Koalas Love Eucalyptus (radar.oreilly.com)
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