Scale Computing Attracts More Investment

October 23, 2012

News Release

INDIANAPOLIS, Ind. - Scale Computing, the leading provider of seamlessly integrated IT infrastructure for small to medium-sized organizations, today announced it 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 HC(3) (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 HC(3) 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). Highlights of Q3'12 include:

-- Sixty-five percent of new Q3 pipeline from HC(3) opportunities

-- Pipeline growth for HC(3) was 100 percent over Q2'2012

-- HC(3) represented 50 percent of Q3 sales

"The launch of HC(3) 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 HC(3) deployments. There is a huge opportunity unfolding for us here in the midmarket with over one million companies in the US looking to virtualize for the first time. HC(3) 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 HC(3) takes as little as one-tenth the effort to set up and manage compared to traditional infrastructures, and with a 75 percent 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 HC(3) 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 the industry's first product that delivers virtualized infrastructure-as-an-appliance. Launched at VMworld 2012 in late August, HC(3) is the easiest, most affordable virtualization system specifically built for the midmarket. With no virtualization software to license and no external storage to buy, HC(3) lowers out of pocket costs by as much as 75 percent and radically simplifies the infrastructure needed to keep applications running. HC(3) makes the deployment and management of a highly available and scalable infrastructure as easy to manage as a single server. HC(3) removes all of 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 making their companies profitable.

"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 Sr. 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 a fully integrated appliance, HC(3) eliminates the need to purchase virtualization software, external servers, and shared storage - resulting in significant 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.

Ideal for first-time virtualizers and small IT departments, a complete 3-node HC(3) cluster capable of 15 - 30 virtual workloads starts at under $25,500 and includes all necessary servers, storage and virtualization, along with 24x7 premium support. To learn more about Scale Computing, visit www.scalecomputing.com or call 877-SCALE-59.

About Scale Computing

Scale Computing develops scale-out clustered IT infrastructure products for small to medium-sized organizations based on its patented ICOS [Intelligent Clustered Operating System] technology. Since launching its initial scale-out storage solution in 2009, Scale has grown to over 1,000 deployments. Scale is currently expanding its footprint throughout the datacenter with what analysts are calling the industry's first hyperconverged architecture, HC(3). Scale's HC(3) seamlessly integrates storage, servers and virtualization into a scalable, turnkey infrastructure that's as easy to manage as a single server. Designed specifically for IT generalists, HC(3) is ideal for those who have not yet adopted virtualization due to cost and complexity, enabling them to run highly available applications. For additional info, visit www.scalecomputing.com .

SOURCE: Scale Computing