Egenera Lands More Funding

As more enterprises flirt with virtualization, startup Egenera has racked up $26 million in additional funding, although there is still no date for the company's much-talked-about IPO. (See Egenera Raises $26M .)

The round, which was led by Pharos Capital, and Egenera's OEM partner Fujitsu Siemens, brings the firm's total funding to over $150 million. Tom Sheehan, Egenera's CFO, told Byte and Switch that the firm needs big bucks to go up against its virtualization rivals IBM, HP, and Sun. "Our biggest challenge over recent years has been one of distribution," he says. "We're competing against the big companies and we probably have only about 30 quote-carrying reps in North America."

The funding will be used to double Egenera's North American sales force, where the vendor relies mainly on direct sales. "We want to get more aggressive," explains Sheehan. (See FSC, Egenera Sign Deal and Egenera Cuts Big Blade Deal.)

Increasing numbers of users are looking to virtualization as a way to control the skyrocketing cost of storage, even though there are still standards issues to be resolved. (See Insider Tackles SAN, Insider: Virtualization Needs Standards, Insider: Users Cite Virtual Savings, and Insider Studies NAS.)

Egenera hit the headlines last year when it filed a registration statement with the U.S. Securities and Exchange Commission (SEC) to trade its common stock on the Nasdaq under the symbol EGEN. (See Egenera Seeks IPO.) But, at a time when tech sector IPOs were few and far between, market conditions later forced the startup to rethink its IPO plans. (See Egenera Waits on IPO.)Today, however, Sheehan told Byte and Switch that Egenera's IPO plans remain on hold. "The tech IPO markets are not very strong at the moment," he explains. "We want to choose the moment where the markets are strong and receptive -- it won't be this year."

Despite Egenera's reticence, storage sector IPOs are becoming more common. Last week, for example, replication vendor Double-Take became the third storage company to file for an IPO this year, following in the footsteps of Riverbed and CommVault. (See Double-Take Seeks IPO, Double-Take Files For IPO, Riverbed Makes It Official, and CommVault's Taking the Plunge.)

Other storage vendors are expected to follow with IPO plans this year. Industry insiders expect InfiniBand chip vendor Mellanox to file, and clustered file system vendor Isilon is often mentioned as a candidate. (See Will Mellanox Make IPO Move?.)

Egenera execs would not divulge how this week's funding announcement will affect the firm's product roadmap, although they confirmed that the vendor now has around 135 customers, up from 100 just over a year ago. (See Egenera Overhauls BladeFrame, Egenera Releases BladeFrame, Egenera Wins in Shanghai, and US Census Picks Egenera.)

James Rogers, Senior Editor, Byte and Switch