SDN Startup Pluribus Nabs $95 Million In Funding

Software-defined networking startup Pluribus Networks opened some eyes this week by nabbing $50 million in a Series D round of funding led by Singapore sovereign wealth fund Temasek and including Swedish telecommunications company Ericsson as a strategic investor.

This round brought the Palo Alto, Calif.-based company's total funding to $95 million.

Solution providers and industry analysts said investors are handing over large amounts of money to a number of SDN startups, while companies are investing in SDN strategies in their own organizations.

[Related: Software-Defined Networking Poised For Its Breakout Year, Solution Providers Say]

"There is absolutely a large amount of investment going into SDN," said Chad Williams, vice president of research and education at Matrix Integration, a Jasper, Ind.-based Hewlett-Packard and Cisco Systems partner. "Organizations like HP, Cisco, Juniper, IBM, a lot those guys are also investing this kind of money in SDN, it's just all sort of internal investment, so it's not something that would be made public."

Williams, who's been involved with SDN for the past seven years, said investors saw Pluribus as a strategic company to invest in because it is geared toward "software-defined everything."

"The key for Pluribus is that they're not just SDN, they have been bringing the SD-everything [approach]. So everything is becoming software-defined whether you're talking servers or storage or infrastructure. These guys are designing a platform that's going to [be associated] with all those areas," said Williams.

Pluribus delivers SDN as an open application platform in an effort to revolutionize data center operations. According to the company, its flagship product, Netvisor, is the industry's first distributed network hypervisor operating system -- converging compute, network, storage and virtualization with an open, programmable approach.

Bill Smeltzer, CTO of Focus Technology Solutions, a Seabrook, N.H.-based Cisco partner, is somewhat hesitant about the SDN market due to the standards but sees it as plausible from an investor standpoint.

"I do know that all of the networking manufacturers I talk to -- Cisco, Extreme, HP -- all of them talk about the coming of SDN and incorporating SDN. In terms of pure investments into SDN outside of that, a lot of private equity startups are dumping money into SDN," said Smeltzer. "My hesitation around it is that there is not a lot of standards right now. Everyone is implementing their own homegrown versions of SDN -- such as Amazon, Google, Facebook."

Pluribus said it will use the funds for the expansion of sales, marketing, business development and engineering.

Kittu Kolluri, general partner of New Enterprise Associates, a Pluribus investor, said in a release that Pluribus is one of the few companies in the IT infrastructure space that has taken a platform approach to deliver on the promise of SDN network programmability, operational simplicity and unification of the economic model of computing and networking.

NEXT: Analyst Weighs In On Pluribus Funding

"This was certainly a good chunk of change for Pluribus to raise and I think it was wise of the investors," said Zeus Kerravala, principal analyst at ZK Research. "SDN is hot now with lots of startups that have great technology. I would also expect to see the other startups step on the same gas pedal as customers look to find the best solution provider."

Focus Technology Solutions' Smeltzer said people are asking questions around switching upgrades when purchasing hardware to make sure there is some type of future SDN road map.

"There are startups coming up with innovative ways, so there could be opportunity for those types of startups and maybe that’s what the investors see in this particular case," said Smeltzer. "I do think these SDN deals are going to be at the tens-of-millions type of transactions with large telecommunications, large cloud providers. I'm not sure how quick we're going to see it trickle down into the enterprise space."

Kumar Srikantan, president and CEO of Pluribus, said in a release regarding the new funding round that the "sea has changed" and CIOs are turning away from "endless" hardware upgrade cycles to a software and network-application-centric view.

"The funding validates our architecture approach and the breakaway growth potential of the company,’ said Srikantan.

PUBLISHED JAN. 23, 2015