Engine Yard gets $15M for Rails hosting, and a new platform

Engine Yard, a hosting and support company for the popular Ruby on Rails programming framework, has raised $15 million in a second round of financing. Chief Technology Officer and co-founder Tom Mornini says the San Francisco startup will soon expand its offerings with the release of Vertebra, its platform for managing Rails applications in the Internet cloud.

The new funding is kind of surprising, since Engine Yard just announced its $3.5 million first round back in January. But the two rounds didn’t happen as close together as you might think, since Engine Yard actually secured the first round in October. More importantly, the company will eventually need more cash to grow, Mornini says, and if the economic slump continues, it could be a lot harder to raise venture backing in a few months.

The second round was led by New Enterprise Associates, with participation from Amazon.com and existing investor Benchmark Capital. Amazon’s involvement is particularly interesting, since Amazon Web Services is one of the leading providers of cloud storage, and some Rails deployment companies, such as Heroku, actually host their applications through Amazon. But Mornini is quick warn against reading too much into the deal — it just means Amazon executives think Engine Yard is a good investment, and isn’t necessarily a sign of future partnerships or acquisitions, he says.

As Engine Yard grows, its focus is shifting. Right now, the company’s selling point is the service and support it provides to its customers — and Mornini says Engine Yard doesn’t plan to abandon hosting — but the Vertebra platform could sbring in more money and a bigger customer base. Vertebra was initially developed for in-house use, to help manage Engine Yard’s hosting service. It’s logical to make Vertebra available as a separate product, too. Mornini says the platform will stand out through its ability to operate between clouds and to gradually add automation of repetive tasks to the application management process. He won’t give me an exact date for the release, but notes that Engine Yard has already created product prototypes, and adds, “It won’t be two years from now.”

The new funding will also support Engine Yard’s Ruby open-soure projects, Rubinius and Merb.

There’s been a spate of other Rails investment in the last few months, including $3 million for Heroku and $3.5 million, also from Benchmark, for application management company New Relic.