Cloud computing is becoming the way to go in the corporate world, and venture capitalist firms are taking note. Realizing that the cloud is only as good as one’s access to it, many corporations are seeking to ensure that their Wide Area Network – or WAN – is reliable, allowing for quick access to software. WAN optimization is becoming the latest hot ticket, and many venture capitalist firms are getting in on the wave of the future. WAN optimization is a relatively mature field.
However, the rise of cloud computing has created a new niche for the industry – and the funding is beginning to show it. Venture dollars are beginning to pour into this industry; In August alone, Ipanema and Expand Networks were funded with over $15 million from Noble Ventures and Intel Capital respectively. And from all indications, that is just the beginning. While it may not seem terribly thrilling to be in charge of keeping the data pipeline between different offices and data centers moving quickly and efficiently, it is a multi-billion dollar industry.
Corporations are intent on maintaining the integrity of their systems, and for key players like Riverbed (RVBD), BlueCoat (BCSI), and Packeteer (PKTR) (which BlueCoat agreed to buy back in April), as well as Citrix (CTXS), Cisco (CSCO), and Juniper (JNPR), it’s game on. So what’s in it for the venture firms? The depth of knowledge WAN optimization companies have access to is a big boon to venture firms and corporations alike.
For one, there is that visibility into a network and the servers running applications which make it possible to track the delivery of cloud-based services and offer service-level agreements. Many start ups are now offering compression, which has the potential for reducing the costs of delivering data from a cloud. For consumers it means applications like Twitter may become more reliable, while for corporate users it means one less strike against cloud computing. This new silver lining promises to keep all investors on cloud nine for years to come.