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Intel invests in cloud management firm

With money, Adaptive Computing plans to hire staff to accelerate expansion

September 14, 2010 07:30 AM ET

Computerworld - A company that makes a cloud management system is getting a $14 million investment from Intel and others, and it will use that money to hire new employees.

The company, Provo, Utah-based Adaptive Computing, intends to use the money to add "dozens" of people to its staff, which now numbers around 75 employees, according to its COO and president, Michael Jackson.

The nine-year-old privately-held company began as Cluster Resources, before changing its name to Adaptive Computing last year. It focuses on high-performance computing systems but has adapted its Moab workload management technologies to handle cloud environments.

"This is a space everybody wants to be in right now," said Glenn O'Donnell, an analyst at Forrester Research. He said a variety of firms "are all trying to bring solutions to the market that can help enterprises build their own cloud."

The goal is to enable companies to build infrastructures that function as internal clouds -- something akin to an internal Amazon "EC2 type service," O'Donnell said.

Where Adaptive differs is in its ability to provide application automation, as well as infrastructure automation -- all in a cloud environment. "[Adaptive] is taking this whole discussion up a level," O'Donnell said.

Jackson said the company's system works as a manager of management tools and is designed to interface with variety of provisioning management technologies, and to connect storage, network and virtualization management systems.

The system can also look into the future to link performance to the terms of service-level agreements, or focus on green computing needs or other requirements.

Adaptive has been profitable since its founding, said Jackson, and its growth has been entirely from customer revenue. However, he said that recently demand for its products has been outstripping the company's ability to grow with "organic revenues."

The investment will be used to hire people to help deliver its services, Jackson said.

Paul Burns, an analyst at Neovise in Fort Collins, Colo., said the overall market for cloud management tools is fairly immature and is experiencing an influx of a lot of new companies, "but I think we're going to start to see some acquisitions."

Investors in Adaptive include Intel Capital, Tudor Ventures and Epic Ventures. Intel Capital says it has invested more than $9.5 billion in over 1,000 companies in the past two decades.

Intel's reach continues to expand, most recently with its plan to purchase security vendor McAfee for $7.86 billion. Cloud infrastructures tend to built in mostly x86 environments, which may explain Intel's interest in investing in a company that develops tools for that platform.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at Twitter @DCgov, or subscribe to Patrick's RSS feed Thibodeau RSS. His e-mail address is pthibodeau@computerworld.com.

Read more about Cloud Computing in Computerworld's Cloud Computing Topic Center.



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