Aiming for Third-Time Charm, San Diego’s Astute Networks Raises $12M

6/18/12Follow @bvbigelow

[Corrected 6/19/12, 10:25 am. See below.] San Diego’s Astute Networks, which reinvented itself almost two years ago by focusing on flash-based technology for accelerating virtualized computing systems, has closed on a $12 million Series B financing led by Samsung Investment Corp. The deal reflects the merits of the company’s new strategy, says Astute CEO Steve Topper, who likens raising capital for tech companies in San Diego to “trying to find water in the desert.”

Astute Networks was founded in 2000 as a fabless chip design company, but later shifted its focus to advanced telecommunications computing architecture as a manufacturer of blade storage equipment for telecommunications, aerospace, government and other “mission critical” markets. In the fall of 2010, the company again changed course to focus its business on addressing the performance issues that arise with network virtualization, a method for enabling network users to share computer resources much more efficiently. “We address the issues that arise with server virtualization and the I/O [input/output] needed to sustain performance to storage,” Topper says.

Steve Topper

[Clarifies and corrects terminology] Virtualization offers tremendous cost savings by greatly reducing the number of servers needed to run a business, and offers greater flexibility in the way computing resources are allocated to users in virtual networks. Topper estimates there are now 60 million virtual machines (desktops and servers) in the U.S., and he cites IDC projections of strong growth in the multi-billion dollar global market for solid state disc (SSD) technology.

But Topper says virtualization can pose significant challenges by penalizing network performance and bogging down user applications.

“Think of it as driving down a highway at 60 miles per hour, and you want to get off at the next exit,” Topper says. “But the off-ramp is where all the cars have lined up, and there’s just a huge, huge, funnel to get off the freeway. That’s the bottleneck that we address. We allow everyone to have sustained computing resources.”

Topper joined … Next Page »

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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