Skytap, Fresh Off Boston-Led $10M Financing, Seeks to Make Cloud Computing Work Better

1/4/11Follow @xconomy

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its headcount this year, through hiring sales and marketing people as well as more in R&D, Roza says.

But clearly, the new financing is really about taking a company that has cleared a lot of its early technical hurdles and pushing it forward into a bigger sales and marketing player. That’s why OpenView Venture Partners made sense as the lead investor, Roza says.

Interestingly, OpenView didn’t come to this story through connections to the earliest VCs. OpenView had been scoping out the cloud computing space for a while, identified Skytap in a Gartner Group report, and started doing its own digging. As he got to know senior managing director Scott Maxwell and the OpenView crew, Roza says he was intrigued by the firm’s track record with helping startups get to the next level with expansion capital. But interestingly, OpenView offered more than just a track record. It also can provide actual help in sales and marketing through what it calls “OpenView Labs.” This is basically a small group of people OpenView employs to test marketing messages on customers, and offer advice to portfolio companies on how to tweak messages to better match what the customers want.

This will be an interesting time to survey customer attitudes about cloud computing. The field is mainly growing on usage from early adopters, and on new computing projects—not so much on migrating existing projects from in-house servers to the cloud, Roza says. Prices of cloud computing infrastructure rates have come down, which certainly helps customers justify making the leap now when the economy is still weak. The classic question—to build it in-house, or buy a product—is the main thing that customers need to wrestle with when they decide whether or not to buy from Skytap, Roza says.

These are sophisticated customers Skytap is dealing with, at the levels of chief information officers or vice presidents of engineering. They may get swept up in buzz like anybody else who watches a Microsoft TV commercial, but for Skytap to be successful it needs to make a strong case that its cloud computing software can save companies more time, money, and staff headaches. If the company can put its new capital to work on that front, it will be on its way to becoming what Roza calls a “large independent company” in Seattle.

Of course, it’s still too early to say if that will really happen. A lot of fundamental things to any business need to happen first.

“You have to build a terrific product, and wow your customers every day so much they tell their peers,” Roza says. “If you do those things, the rest will take care of itself.”

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