Scale Computing Closed $12 million in Series D Funding

Scale Computing, Inc., provider of seamlessly integrated IT infrastructure for SMBs, has closed $12 million in Series D funding, led by Heron Capital Venture Fund.

Reservoir Venture Partners also contributed to this round as a new investor to Scale, joining existing investors who also contributed to Series D, including: Allos Ventures, CID Equity Capital, Spring Mill Venture Fund, Northgate Capital, Benchmark Capital Partners and Scale Venture Partners. Funding will be used to further accelerate the growth of HC3 (Scale’s new ‘datacenter-in-a-box’ product), continued product development and the launch of a new partner program later this year.

"Scale Computing is at the forefront of virtualization hyperconvergence," said Bill Gurley, partner at Benchmark Capital, a Silicon Valley venture capital firm in Menlo Park, CA. "Scale is able to remove both the complexity and cost of CPU/storage virtualization with their HC3 product. The hypervisor isn’t merely commoditized – it elegantly disappears inside the intuitively simple interface."

Scale is also reporting record results for its third quarter, ending September 30, 2012 (Q3’12):

• 65% of new Q3 pipeline from HC3 opportunities
• Pipeline growth for HC3 was 100% over Q2’2012
• HC3 represented 50% of Q3 sales

"The launch of HC3 earlier this quarter has already had a significant impact on our company growth and overall sales pipeline," said Jeff Ready, CEO of Scale Computing. "We are just four weeks removed from the launch date, and we are already approaching 100 HC3 deployments. There is a huge opportunity unfolding for us here in the mid-market with over one million companies in the US looking to virtualize for the first time. HC3 offers them an alternative to being locked down by EMC and VMware by providing a product that eliminates ongoing licensing fees for the hypervisor, leverages open source technologies, and simplifies support with a single vendor. Early feedback has been outstanding, with some users reporting that HC3 takes as little as one-tenth the effort to set up and manage compared to traditional infrastructures, and with a 75% cost savings. Convergence is the macro-trend in IT, and we will continue to lead the way toward the hyperconverged world as we further develop HC3 and release new product features."

Scale Computing has transformed their affordable scale-out storage cluster into a hyperconverged solution that combines servers, storage, and virtualization into a product that delivers virtualized infrastructure-as-an-appliance. Launched at VMworld 2012 in late August, HC3 is the an affordable virtualization system built for the midmarket. With no virtualization software to license and no external storage to buy, HC3 lowers out of pocket costs by as much as 75% and simplifies the infrastructure needed to keep applications running. It makes the deployment and management of a HA and scalable infrastructure as easy to manage as a single server. It removes the complexity of managing a virtualized environment, eases the challenges of working with multiple vendors, and enables IT departments to actually focus their time on the applications.

"Hyperconvergence attacked the market in late Q3 of 2012 with astounding energy and received immediate and vigorous interest from end users," said Jeff Boles, Jeff Boles, senior analyst and director of Validation Services at the Taneja Group. "Irrespective of market or niche, the idea of truly converged computing technology that seamlessly combines all the key elements of the data center into one, flexibly scalable system resonates. We’ve seen this ourselves from hands-on time that demonstrates a better than 4x improvement in time and effort required for virtual machine deployment and management. Customers today are desperate for simplification in the face of increasing complexity, and hyper convergence delivers this without a compromise in capability."

As an integrated appliance, HC3 eliminates the need to purchase virtualization software, external servers, and shared storage – resulting in reductions in both costs and complexity. As a scale-out solution, additional compute or storage resources can be added to a cluster within minutes, with applications and data failing over between nodes in the event of equipment failure.

For first-time virtualizers and small IT departments, a complete 3-node HC3 cluster capable of 15 – 30 virtual workloads starts at under $25,500 and includes all necessary servers, storage and virtualization, along with 24×7 support.