Selling technology to schools is still a formidable task, but it’s a far less expensive and extended process than it used to be.

And because of this friendlier climate, we’re seeing the second wave of education technology tools and a surge in interest from businesspeople and entrepreneurs. But the education field only received 1 percent of venture capital funding between 1995 and 2011 — and educational startups still face a critical shortage of resources.

Oakland, Calif.-based NewSchools Venture Fund was formed 15 years ago to fund technology intended for K-12 schools. To meet the needs of educators and entrepreneurs, the nonprofit discussed its expansion plans this week, including strategic partnerships with venture firm Rethink Education and Zynga.org, the charitable arm of social-game publisher Zynga.

“Education is undergoing a long-awaited revolution,” said NewSchools’ CEO Ted Mitchell [above]. The partnerships will merge “cutting-edge technology with forward-thinking capital on behalf of kids’ learning,” he explained.

Most interesting is the agreement with Rethink Education; according to a release, the New York-based venture firm with $50 million under management will provide a “significant portion of the fund’s carried interest” to New Schools. Rethink Education will hand over an unspecified percentage of its profits from its investments in its portfolio, which includes Pathbrite and EverFi.

“This marks an unprecedented step in the alignment of public and private education investors and a powerful alliance between the two booming education technology centers of New York and San Francisco,” said Rethink Education managing partner Rick Segal in a statement.

Mitchell didn’t provide further insight into the terms of the deal, but he said the donation is “certainly generous” and will boost seed and early-stage funding.

In concert with Zynga.org, NewSchools also just launched a learning games accelerator. Zynga will provide the office space, access to product managers, and $1 million in capital for the first year. Zynga CEO Mark Pincus made the announcement Wednesday, and he referenced the surge in enthusiasm for educational games. “Everybody at Zynga is passionate about having a positive world impact,” he said.

In lieu of the recent announcements, VentureBeat reached out to NewSchools for insight into its investment thesis.

“A few years ago, our inbound deal pipeline was one or two startups a week” said Jennifer Carolan, the partner who leads the firm’s seed fund. “Now we’ll get 15 calls.”

Carolan said they regularly meet with educators to ask about the gaps and pain points. She said infrastructure is still a “massive problem” in schools, so analytics and cloud-based technology is of keen interest. Another focus for the seed fund is high-quality content, including a curriculum to help students learn to code. Carolan also noted the “unprecedented, rapid growth” of the tablet, and will invest in technology for special needs children.

In the previous ed-tech wave in the 1990s, school districts spent the majority of the budget on hardware, not software. Now it’s the opposite. As a result, “technology is finally reaching kids and impacting learning,” Carolan said. “The goal is for kids to become content creators — not just consumers.”

Images via NewSchools’ Facebook 

“Pivotal One reinvents Enterprise PaaS and sets a new standard for the industry, enabling businesses to store and analyze massive amounts of data cost-effectively, ingest huge numbers of events in real time, create insights with the data and events, and rapidly deliver applications and innovation to their customers,” the company said on its site.

According to statements issued by both companies, this deal is part of GE’s interest in the ‘Industrial Internet,” or the integration of physical machinery with connected sensors and software. In November 2012, GE announced that it would invest $1 billion in Industrial Internet technology because its improves efficiency, which will ultimately lead to billions of dollars in savings.

“It’s no secret that the cloud and Big Data are driving dramatic business transformation enabling an Industrial Internet,” said Bill Ruh, GE’s Vice President in a statement. “At the heart of it is that machines can be intelligent, connected, and that we can use software to analyze the information coming out of them. To support this next frontier requires an architectural shift in how our services are built and delivered.”

GE will take a 10% equity stake in the startup and the companies will work together on research and development initiatives. Pivotal was founded in December 2012 by former VMware CEO Paul Maritz as a spin-off of VMware and EMC.

Photo Credit: pandrcutts/Flickr

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Canonical and VMware announced today a partnership that will enable customers to run efficient OpenStack clouds using the two sets of technologies.

VMware is the latest company to throw its heft behind OpenStack, the cloud operating system that kicked off two-and-a-half years ago to enable any organization to offer open source software and services. Contributors to the OpenStack project include IBM, Rackspace, and Amazon.

Canonical’s Ubuntu, one of the most popular OpenStack distributions, will now include the plug-ins necessary to operate with VMware technologies, including vSphere or Vicira NVP. Canonical is a 600-person company that competes with Microsoft on desktop, Citrix, and VMware. “In every part of our history, we are encroaching on other people’s territory — but at the same time, we collaborate on OpenStack,” said Mark Baker, a product manager at Canonical, in a recent interview.

This is a major announcement for the industry — and somewhat of a surprise — as VMware hasn’t always embraced the project. Mirantis CEO Boris Renski wrote in a blog post that VMware is a competitor to OpenStack and should take part in the initiative.

Kyle MacDonald, Canonical’s cloud vice president, said in a recent interview that this is an “astute move” for VMware. “They are taking their enterprise business and partnering it with an open source project to try to get the best of both worlds,” he continued.

McDonald, who has defended VMware in the past, said that customers can now “reuse VMware estate with an open-source stack.” It’s a far cry from a world where “you’re either VMware or you’re not.”

As we reported in January, VMware has recently been getting back to basics with a renewed focus on infrastructure. The company announced it would spin off a separate business unit dedicated to “big data” and cloud.

Update: This story has been updated with the correct funding amount. It was $1.8 million, not $18 million.

What do Crossfit and RackWare have in common? They both aim to make their customers flexible and agile and get them running at optimal performance.

RackWare is a cloud startup that has raised $1.8 million in its first round of funding.

RackWare has developed a series of enterprise solutions to bring “intelligence and automation to the cloud.” The RackWare Management Module (RMM) helps businesses scale across private, public, or hybrid cloud environments, without changing applications.

As businesses migrate their operations to the cloud, there is a greater need for tools to help manage this infrastructure. RackWare launched in September 2012 with its management software that helps IT teams get the “highest performing” cloud throughout their applications’ lifecycle. The company touts the “mobility” and “elasticity” that RMM brings. The technology makes it easy to scale up or down, depending on demand, as well as disaster recovery.

“Today’s enterprise IT organizations need solutions that allow them to immediately benefit from deploying applications in the cloud within their current environment,” said founder and CEO Sash Sunkara in a statement at the time. “With RackWare Management Module, users can take full advantage of the cloud without comprising their current investment in infrastructure and applications. And once RMM is in place, it is easy to expand use of the cloud to increase cost savings to the business through greater availability and flexibility for application developers and users.”

Sunkara was one of the cofounders of 3Leaf Systems and served as VP of marketing at QLogic’s Network Solutions Division. Her cofounder, Todd Matters, worked on networking at Unisys and IBM and founded SilverSteam. They founded RackWare in 2009 and at the time raised a small amount of angel funding. This $1.8 million is part of an intended $2.67 million, according to an SEC filing. The investors are undisclosed, although VentureBeat has reached out to RackWare for comment.

RackWare is based in Santa Clara, California. Read the filing.

Photo Credit: CrossFit Kandahar/Flickr

PagerDuty provides IT alerting and incident tracking software. In this era of cloud computing, sites need to be fully functional at all times. Issues can arise at any time of the day or night, leaving IT teams scrambling to respond to the problem.

A number of companies provide monitoring tools, such as Nagios, Zenoss, Pingdom, monit, Munin, Splunk, and BasicState, which send out notifications when something is going wrong. Many of these services focus on just one part of IT infrastructure.  As a result, companies have to cobble together monitoring systems that can be disorganized and generate too much noise.

PagerDuty integrates with these systems and aggregates the alerts. When an incident is triggered, notifications are sent via email, SMS, and phone. PagerDuty has developed a unique set of tools to ensure that the right person receives the right notifications (database administrators don’t get pinged about application problems), and 4 am alerts are only sent when absolutely urgent. IT teams can use the software to set up escalation systems, meaning that if one person doesn’t respond, someone else is notified until there is a response. This prevents problems from slipping through the cracks. Scheduling features make it easier to divvy up on-call responsibilities, which also prevents lapses.

“Today, we are the “9-1-1 dispatch” system for IT,” said CEO Alex Solomon in a blog post about the funding. “The next major step in the vision is to expand beyond just the critical incidents. We ultimately will become the central nervous system of IT: we’ll provide the interconnecting fabric between your systems and the people responsible for managing them. Our big audacious goal is to reduce the noise. In other words, only the critical issues should wake you up at 4am, false alerts should be automatically filtered out, and low priority incidents should be surfaced in aggregate in summary reports.”

Clients include high-profile customers like Microsoft, Adobe, EA, Square, Github, Pinterest, Braintree, Heroku, Intuit, 37signals, and Etsy. This first round of investment will go towards hiring more “crazy-smart engineers” for product development and fuel global expansion. In addition to Andreessen Horowitz, the Webb Investment Network, Opscore founder Jesse Robbins, and existing seed investors Harrison Metal, Baseline Ventures, and Ignition Partners contributed.

PagerDuty was founded in 2009 and is based in San Francisco. Read the press release

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

In Silicon Valley, a growing number of venture capitalists are breaking away from the larger firms to form smaller, highly specialized funds.

Sunil Dhaliwal, managing partner of Amplify Partners.

The newest is Amplify Partners; its managing partner Sunil Dhaliwal is formerly of Battery Ventures, where he invested in hot enterprise companies like Splunk and Netezza (acquired by IBM). Dhaliwal has succeeded in raising a $40 million fund to invest solely in emerging IT infrastructure companies.

“Technical founders working on IT infrastructure startups have far fewer options for funding compared to digital media, consumer Internet, or even application software startups,” said Dhaliwal in an interview. He was inspired to start the firm after meeting entrepreneurs in this space who felt that angel investors and larger firms didn’t have the time to provide “senior level attention.”

Dhaliwal believes that incumbent IT infrastructure vendors are “vulnerable” in a way the industry hasn’t seen for 25 years. And with hundreds of billions of dollars to be made, “it was pretty clear that I should fill that gap,” he said.

Amplify’s startups are all led by “technical founders who would rather write code than PowerPoint.” The three key themes the firm is looking for are scale-out architectures, data growth, and real-time infrastructure. The entrepreneurs tackling these problems must be focused on efficient business models from day one.

Dhaliwal revealed that Amplify Partners will make initial investments ranging from $50,000 to $1.5 million, and retains the necessary capital to fund its entrepreneurs through several rounds. Current portfolio companies include AppNeta, Continuuity, Datadog, Fastly, Wibidata, and several startups in stealth mode. Amplify Partners has offices in Cambridge and at Sand Hill Road in Palo Alto.

Frankly, tech incubators are getting too ubiquitous for their own good. Why do we need yet another Y-Combinator or 500 TechStars imitator?

But when Silicon Valley’s newest accelerator, Alchemist, launched its first class of startups this week, investors opened their check books.

The startups that have been selected for the first class are far from sexy — unless a “software-defined infrastructure platform for heterogeneous computing” does it for you – but they’re all generating revenues. What they have in common is that they target their products at businesses, not consumers.

Ravi Belani, the program’s managing director, has introduced the program at the perfect time. Part of Alchemist’s appeal is that investors are wary of consumer-facing mobile apps and social games, which have millions of users who won’t fork over a dime. As a result, this year’s hot investing targets are business-to-business (“B2B” or “enterprise”) startups.

General Catalyst is just one of the venture capital firms that is keeping a close eye on Alchemist’s seed-stage startups. “Incubators have historically worked well in the consumer internet space,” noted Deepak Jeevankumar, an enterprise-focused VC at the firm. “With the right access to mentorship and design customers, Alchemist is well-positioned to guide enterprise startups,” he said.

Already, Andreessen Horowitz, Citrix’s Accelerator, True Ventures, Greylock Partners, and Founders Fund have invested in the program’s startups. Alchemist provides the startups with about $30,000 in initial funding, which is a larger sum than alternative programs such as Y Combinator.

“I think what Ravi is doing is exceptionally interesting,” said Kevin Spain, a partner at Emergence Capital.

At Alchemist’s packed Demo Day in Mountain View, Calif.

“There’s a real need for enterprise-focused accelerators in the market,” said Spain, explaining that B2B companies have a whole different set of requirements than consumer startups to get their products off the ground.

Lightspeed‘s Bipul Sinha, an investor with a focus on the enterprise, agrees that it makes far more sense for enterprise-focused startups to enroll in an accelerator. In an interview, he said the “product building and sales process” are very different from the consumer space. He added, “there is a need for mentorship and education.”

Belani isn’t surprised that investors have been so receptive. After all, VCs are beholden to their limited partners (LPs), who expect to see solid returns. “It’s fun to build stuff and make money,” said Belani. “And in the enterprise, your first customers will write million-dollar checks.”

During their six months at the accelerator (a typical accelerator program lasts three months), Alchemist connects the founders with chief information officers at Fortune 500 companies, and they learn how to present a compelling sales pitch. Most of the entrepreneurs have a strong technical background, so this education in marketing and business is vital.

To ensure the startups get the attention they need, Belani will only take on 10 teams per quarter. Belani has already raised enough money to fund 90 companies in the next two years, but won’t yet disclose the amount. The big picture vision is to foster a stronger relationship between Silicon Valley’s enterprise tech startups and key decision-makers at Fortune 500 companies. The current class met with top executives at Procter & Gamble, Best Buy, and Dell.

Ravi Belani, the managing director of Alchemist’s Accelerator.

“We have different needs than guys in a garage building a social game,” said Ryan Nichols, founder of Tylr Mobile, a startup targeting sales professionals that raised $500,000 last month. The serial entrepreneur, who spent four years at SAP, saw a lot of value in the program, which fronted about half of his startup’s seed round. ”I don’t need business 101 advice, but I’m absolutely hungry for expertise in making enterprise sales and help finding development customers with specific needs.”

Mark Trang, cofounder of Social Pandas (pictured above, flanked by his cofounders), heads one of Alchemist’s venture-funded startups. He said he tapped Belani’s “network of experts,” including former Oracle-on-Demand CEO Timothy Chou and DFJ’s Tim Draper, for advice on hiring, research and development, and PR. With its social tools for salespeople, Social Pandas has already raised a sizable $1.5 million seed round.

Related: In 2013, analysts predict that 80 percent of the companies that will go public are B2B.

When Balani hatched the idea for the new model accelerator, he had no trouble convincing Khosla Ventures, Cisco, SAP Ventures, US Venture Partners, and his former VC firm, DFJ, to underwrite the fund. This is an impressive feat. With a few notable exceptions, said Belani, “Venture funds do not fund another instrument that is funding startups.”

Alchemist spun out of the Harvard Club in San Francisco, where Belani brought in top speakers to meet with talented college students. Likewise, the first batch of startups in Alchemist’s program met with entrepreneurs and visionaries like Adam Pisoni, Yammer’s cofounder and CTO; Melinda Gates; and Box’s 27-year-old CEO, Aaron Levie.

At a launch party for Cambrian Genomics, one of the startups enrolled in the accelerator.

At a recent get-together with the founders, I noticed an unusually large number of female entrepreneurs and developers. In another unusual twist, about half of the class are recent college grads, which suggests that the growing interest in enterprise-technology is permeating the top universities.

Andrea Faz is the twenty-something cofounder of ConnectBright, which offers a directory of reviews of B2B companies. Given her lack of real-world corporate experience, the mentorship was invaluable.

“We all unite on this common ground of innovating the sexiest industry [and that's the] enterprise,” said Faz.

With an explosion of seed-stage companies, and a relatively steady supply of first-round capital, it seems pragmatic to teach entrepreneurs how to make money. Alchemst’s founders will be in a strong position when they decide to raise, if they need VC funding at all.

In their own words, the first batch of startups are:

• SendTask, a next generation enterprise task management platform.
• Social Pandas, a social selling platform to help salespeople close deals.
• Xockets, a software-defined intfrastructure platform for heterogeneous computing cofounded by a former Cisco engineer.
• JyMob, a platform to choose the best people for your jobs.
• Selligy, a mobile service helping salespeople with their primary activity, sales meetings [Editor's note: Selligy was a finalist at VentureBeat's Mobile Innovation competition.]
• Active Scaler, a storage-load balancer for network driver enterprise storage.
• ConnectBright, an advocacy empowerment platform for B2B service providers.
• Cambrian Genomics, a DNA laser printer.
• MobileSpan, a BYOD platform for enterprises.

ScaleArc has pulled in $12.3 million for its second funding round to bolster its efforts to make SQL databases easier to manage.

The Silicon Valley-based company simplifies the way you deploy database environments. It claims its ScaleArc iDB software can lower costs by up to 50 percent for its customers, which include online gaming company Kixeye and Weather Decision Technologies.

Most valuable data is stored in SQL, but caching data is typically a manual task that required a team of engineers. ScaleArc automates this complex process to give its customers a visibility into every query, provide real-time analytics and instant troubleshooting, and more.

TechCrunch’s Alex Williams predicts that the company will likely use the infusion of capital to attack the NoSQL market. This will ensure that the company can stay ahead of its competition, which includes Citrix and Netscaler.

To further the development of its database infrastructure software, ScaleArc raised funding from Accel Partners with participation from Trinity Ventures and Nexus Ventures. This brings the company’s total investment to $18.3 million.

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The current media hype around Big Data has clouded where the real opportunity is: software applications that exploit Big Data.

The infrastructure and platform plays that are grabbing the headlines are critical, but they won’t create the same long-term value as those entrepreneurs who figure out how to apply Big Data to the task of disrupting or accelerating a market.

Instead the market needs companies to provide Big Data applications that embed the insights for a particular market or business process, delivered at the right time, and to the widest possible audience. Why? Because there are simply too few skilled Big Data practitioners available for every organization that needs access to such insights to work it all out for themselves.

It’s not just the media that has been focused on Big Data infrastructure, much of the recent venture and growth equity investment activity has gravitated towards the tools and platforms needed to manage Big Data and deliver analytic insights. However the largest wave of Big Data value creation is still to come and it will focus on exploiting the infrastructure to create new applications that analytically optimize business processes.

My firm’s investment thesis focuses on software and information services companies who are bringing together three key capabilities: control or access to a business process; Big Data infrastructure and skills; and information rights to the broadest set of relevant data. Our term for this convergence is Applied Analytics and through our work with a wide range of companies we’ve developed the 11 Principles of Applied Analytics, a framework to assist strategic thinking around this opportunity.

In our experience the companies who are best positioned to be successful in exploiting Big Data are those who have focused on three key patterns.

The first is that they start with the answers their customers need rather than focusing on the data they currently have and what they think that data tells them. They work backward to figure out what is required (more data, tools, knowledge) to get to that answer.

A second trait is rather than delivering insights to a small number of business leaders; the insights are embedded directly into a business application or workflow. Getting the most out of Big Data means making sure insights are consumed, consciously or not, by the widest number of people and not just the data elite.

These companies all share a third characteristic: a strong understanding of Information Rights. In this brave new cloud-based, multi-tenant, third party data world they are methodical in their approach to acquiring, managing and using data.

Successful companies secure the appropriate rights to use key information and then proactively manage how that data is used to both maximize value creation and to ensure that the company stays on right side of the court of public opinion. They are not only compliant, they can prove compliance.

Leading companies such as Google and Amazon have blazed an applied analytics trail in display advertising and eCommerce. Those early innovations have now led to significant investments in Big Data infrastructure, the building blocks necessary to make Big Data mainstream. We look forward to the next wave of value creation that will come from the wide swath of software and Internet companies who exploit the emerging infrastructure and create new Big Data applications.

Justin LaFayette is a managing director of Georgian Partners, the growth-stage Private Equity firm he co-founded in 2008. Prior to Georgian Partners, Mr. LaFayette was Vice President of Strategy for Information Platform and Solutions with IBM Software Group.

Prior to IBM, Mr. LaFayette was a co-founder of DWL, an enterprise software company that led the Master Data Management (MDM) market. DWL was named one of the fastest growing technology companies for three consecutive year by Deloitte and Touche and was acquired by IBM in 2005. Mr. LaFayette was the recipient of Ernst & Young’s Entrepreneur of the Year award for Technology in 2001.

Follow Georgian Partners on Twitter @GeorgianPrtnrs.

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It’s unlikely that you, Dear Reader, will ever experience the big-data challenges or infrastructure demands of a Facebook-scale, billion-user software platform. But if you do, you’ll be happy to know that the company is sharing a sip of its secret sauce today.

Called Corona, the aforementioned sip contains a more efficient way to handle scheduling for Apache Hadoop MapReduce.

Facebook’s been Hadoop/MapReduce powered for some time now, “and that served us well for several years,” writes the Corona team today on the company’s dev blog. “But by early 2011, we started reaching the limits of that system. … It was pretty clear that we would ultimately need a better scheduling framework.”

The team briefly flirted with YARN as an alternative, but there were too many incompatibilities with Facebook’s version of HDFS, and the team was fairly sure YARN couldn’t handle Facebook-scale workloads.

So the Facebook infrastructure team started working on a MapReduce scheduler that would scale better, be easier to upgrade, have lower latency for small jobs, make better use of clusters, and schedule “based on actual task resource requirements rather than a count of map and reduce tasks.”

The result is Corona, a push-based scheduling framework that removes cluster resource management from job coordination, tracking the nodes and free resources continuously for minimal latency.

And if that sentence totally made sense to you, you can check out Corona on GitHub now — that’s the version Facebook is currently running in production.

“Corona has allowed us to achieve our initial goals of greater scalability, lower latency, no-downtime upgrades, and better resource management,” the team concluded.

“It has also helped us achieve better scheduling fairness, faster job restartability, a cleaner code base, and the ability to integrate with other systems for scheduling.”

Facebook will be making upgrades to Corona as time goes by, since it’s now a core part of the company’s infrastructure.

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On election night, Twitter eclipsed many of its own records and even beat Facebook as the preferred medium to announce and spread news.

So how is it that the once crash-prone service saw nary a fail whale amid last night’s social media frenzy? Twitter’s engineering czar chalks it up to Ruby — rather, to the fact that Twitter has turned its back on the Ruby stack for good.

Throughout the day yesterday, Twitter users sent around 31 million election-related tweets. At the height of result-tallying activity, the service was getting 327,452 tweets per minute (TPM) about the election alone, with tweets on all topics totaling 874,560 TPM at last night’s peak, far outstripping previous records.

While Twitter used to see brief spikes during major media events, Twitter infrastructure VP Mazen Rawashdeh wrote today on the company blog that election night was a sustained, hours-long onslaught of activity — a traffic pattern the company also experienced at lower volumes during the Olympic closing ceremonies and the VMAs.

“Over time, we have been working to build an infrastructure that can withstand an ever-increasing load,” Rawashdeh said.

“For example, we’ve been steadily optimizing the Ruby runtime [see Twitter's detailed post on dealing with the Ruby garbage collector]. And, as part of our ongoing migration away from Ruby, we’ve reconfigured the service so traffic from our mobile clients hits the Java Virtual Machine (JVM) stack, avoiding the Ruby stack altogether.”

Ouch, Ruby! You need some aloe for that burn?

Conflict manufacturing aside, Twitter has for some time known that as its place in the world of media grows, it’s becoming more of a public information utility and less a mere microblogging service. As such, downtime is unacceptable. We know it, and they know it, too.

“The bottom line: No matter when, where, or how people use Twitter, we need to remain accessible 24/7, around the world,” said Rawashdeh. “We’re hard at work delivering on that vision.”

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CEO Brendan McCorkle

CloudMine started out as a business-to-business big data service, but quickly pivoted into a instant, managed backend for app developers. The goal: enable app developers to focus on the front end of their applications … the user interface features that users actually touch, rather than the infrastructure and data management that enables them.

VentureBeat spoke to chief executive Brendan McCorkle yesterday.

“Any time you build an app there’s all this scaffolding that needs to go up: infrastructure, account management, data security and other basic services just so an app can run,” says McCorkle. “We build that scaffolding so you don’t have to.”

For example, a local business-finding app might need geolocation support, user registration, some definition of public and private data, and more. CloudMine enables all the backend components of this through a single API … which has the potential to significantly simplify development and shorten build time.

“Essentially, we can abstract away the backend. We can abstract away EC2,” McCorkle said, referring to Amazon’s Elastic Compute Cloud, a common cloud computing service for developers. “That enables you as an app developer to focus on your core competency and do your thing.”

For almost all apps, he argues, the server side infrastructure is not what makes a developer’s app unique. Connection to the cloud for data and computing are essential, in fact business critical, but they are not what the user sees. They are the underlying components that support the app, and CloudMine’s goal is to provide them quickly and easily.

In addition, the company promises benefits that extend beyond simplification and cost savings.

Because CloudMine abstracts the backend, app makers are able to host their data on multiple Amazon availability zones without any additional work, significantly improving the chances of their service staying up even if a part of Amazon’s cloud goes down. In fact, McCorkle told VentureBeat, this could even extend to mirroring on multiple clouds from additional providers such as Rackspace, further increasing reliability with zero additional developer overhead.

The company is seeing some traction in two very different spaces: enterprise and startups.

CloudMine has two Fortune 500 customers who are currently using the company’s backend to expose legacy data to mobile applications. And startup clients are using the backend infrastructure to rapidly prototype and deploy sophisticated mobile apps.

CloudMine began its young life at Startup Weekend Philly just nine months ago, and is currently running more than 1500 apps on the platform. Pricing is simple: $.05 per active user per month, or custom pricing for large data consumers.

The company received $20,000 in seed investment, and a $100k investment from Ben Franklin Technology Partners of Southeastern Pennsylvania. CloudMine is based in Philadelphia.

Image credit: ShutterStock

Stuxnet showed us the potential for great damage in an attack on infrastructure. Now, a serious new piece of malware is stealing architectural and engineering plans for infrastructure.

“I think every public organization should be concerned about this,” said ESET security intelligence program manager Pierre-Marc Bureau in an interview with VentureBeat. “When you’re starting to see some serious attempts at stealing intellectual property from one country to another, that’s something to be concerned about.”

Security firm ESET discovered the malware, now called ACAD/Medre.A, around February and noted it was “military-grade.” The worm attacks AutoCad, a popular software used by architects and engineers to draw up blue prints and other infrastructure plans. It targets computers running the Windows operating system to steal and e-mail out AutoCad “drawings.” These drawings are then received by an e-mail that ESET found is based in China.

Stuxnet, Duqu, Flame and other malware that hasn’t yet been discovered have been developed to hit where it really hurts: our physical modes of operation. But the theft of infrastructural plans could be just as damaging. Especially when it involves blueprints and plans for the construction of bridges, secretive or government-owned complexes, or energy infrastructure.

The catch with this piece of malware is that it’s not heavily attacking the United States, Europe, or China, but rather in Peru. It’s an odd location, which leads Bureau to believe the malware was probably written by people who wanted to see what their competition was up to. It could be an attempt to one-up a competing agency for a new business pitch, or other similar situations.

He did stress, however, that this malware is too complex to be written by any old cyber criminal wannabe. It isn’t as complex as say, Stuxnet, which shut down fuel to Iran’s nuclear program in 2010, he said, but it does have the potential to spread faster and wider. Bureau said this is probably not a state-sponsored attack, however, given that Peru is being hit the hardest.

“[This is] either for somebody who wants to bid on public service contracts, maybe know what their competition is doing, or they’re trying to find the system for building these things,” he said.

Despite the fact that this malware could simply be an act of corporate espionage, Bureau warns that governments and security teams should remain aware.

“I think this is pretty serious and a good example of a trend that is going to continue for the next months and years,”  he said.

Blueprint image via Shutterstock

Australian venture firm Starfish Ventures led the investment in Melbourne, Australia-based Scalify, which has created Badumna, a technology that uses a peer-to-peer user network to deliver functions normally handled by large server farms. The result is games that look better, perform better, and cost less to operate. That’s important since driving down online costs is key to making game companies more profitable.

Scalify says that rapid growth can cause a lot infrastructure headaches for game publishers. Traditional client-server online games rely on centralized communication. That slows gameplay, is difficult to scale quickly, and reduces the number of players who can be online at any given time.

Badumna allows traffic to communicate via peer-to-peer in a decentralized network. The company argues that this approach enables multiplayer apps that were not possible before. It does so by forming a secondary network of trusted nodes that are used for services such as authentication, third-party arbitration, and others tasks. These tasks are executed in the peer-to-peer network, and so, that network offloads work from the servers.

“As each player joins the game, they automatically contribute additional capacity to the network, making the approach inherently more scalable than any client-server approach,” Steve Telburn, chief executive of Scalify, said in an email. “This is obviously important because publishers do not know if their games will be a success or not, so they need to plan their infrastructure based on the ‘best case’ scenario.”

That’s true even if the infrastructure is outsourced as they still need to secure dedicated servers. Testing shows improvements to latency, Telburn said. “There is only one hop peer-to-peer rather than two hops via a server.”

He contends the approach can reduce server and bandwidth costs by up to 75 percent, depending on the design of the game. Those costs are usualy the third-highest expense for an online game — after development and advertising. In addition, the game design can be better, Telburn said. Designers can create un-sharded worlds with lots of synchronous (simultaneous) action.

Past peer-to-peer gaming attempts haven’t succeeded well on a large scale. But Telburn said Badumna is different as it was created after a huge four-year research effort. His team has addressed things such as dealing with cheaters through a “distributed validation” technology.

The first version of Badumna debuted last year, and it is now being used to power games in the U.S., Europe, and Asia. The new funds will be used to expand the company’s sales and marketing capability and increase the range of game development platforms supported.

Starfish investment director Anthony Glenning, who will join Scalify’s board, said, “The online gaming market is large and is growing quickly, but is hindered by the traditional client-server model which is expensive and limits scalability. We recognized Scalify’s unique solution for peer-to-peer games, especially in terms of scalability and reducing traffic to the server.”

Telburn said, “We always get a great reaction to our product from customers, so we’ve always been very keen to expand its reach. We’re thrilled that this investment will now enable us to show Badumna’s full potential.”

The core technology came from NICTA, Australia’s Information and Communications Technology Research Centre of Excellence. That entity worked on the technology for four years as a research project. Scalify was formed in 2010, and it has four employees. Rivals include networking middleware companies such as Exit Games, but their solutions are based on client-server designs.

Scalify has also gotten a small grant from the Australian government. Game trials are now under way with major publishers. In addition to Telburn, another founder is Santosh Kulkarni, chief technology officer.

But it didn’t mention one of the prime benefits of that shift. For every three servers that it used to have on Amazon Web Services, it can now get away with just one on the zCloud.

The zCloud can thus dramatically lower the company’s costs, Allan Leinwand, chief technology officer for infrastructure engineering at Zynga, told VentureBeat. That, in turn, gives Zynga some huge cost advantages over its rivals in the social game business, he said. Leinwand is sharing these details in a speech at the Cloud Connect conference in Santa Clara, Calif. today.

Zynga started out using its own servers. Then, in June 2009, it launched FarrmVille. The game was an enormous success and it forced Zynga to shift to Amazon Web Services, a public cloud-based infrastructure that allowed it to tap Amazon’s extra computing resources as necessary to handle the enormous demand for Zynga’s games.

FarmVille grew from zero to 10 million daily active users in its first six weeks and hit 25 million DAUs in its first five months. AWS gave Zynga huge flexibility, and it formally adopted a hybrid cloud strategy that mixed public and private clouds. Between 2009 and 2011, Zynga’s server capacity grew two orders of magnitude.

But starting last year, the company began heavily investing in the private zCloud. Yesterday, the San Francisco company disclosed that it spent $238 million on capital expenditures in 2011, up four-fold from the year before. And most of that was due to zCloud spending on server infrastructure that was precisely suited for Zynga’s mix of games. As it designed the zCloud, Zynga focused on the hardware and tried to eliminate every bottleneck in server components such as microprocessors, storage, and memory.

“We launched with AWS and then began to understand the stresses of the traffic and how we could manage it,” Leinwand said.

At the beginning of 2011, 20 percent of Zynga’s daily active users were hosted on the zCloud and 80 percent were on Amazon. Now that has been reversed. Over time, even more users will be hosted on the zCloud. Zynga was able to deploy the zCloud for its initial trial within six months. CityVille Hometown, a mobile game, was the first to be entirely hosted on zCloud. In November, CastleVille started on the zCloud, and the system was able to handle huge traffic growth when the game grew to five million users in six days. Zynga now has 240 million monthly active users.

Of course, shifting most of its user base to a private cloud carries its risks. Zynga now has to invest in its own data centers. If its games suddenly become unpopular and the user count drops, Zynga could get stuck with too much infrastructure. But the bet has paid off so far with steady growth in users and lower costs per user. Zynga can now deploy up to 1,000 servers in 24 hours. Zynga’s infrastructure is one of the largest uses of public and private clouds in the world.

Leinwand also said that Zynga has more control over the availability of its games. The company can now precisely understand the computing experience that players have, like how many seconds they have to wait for something to happen. Now it can measure everything. Leinwand said Zynga embraced the idea of “all-in availability,” which meant it would handle the load even if Amazon went down.

“We wanted to understand our availability and make sure that it was solid and always there,” he said.

Now that the zCloud is up and running, the company is collecting data on just how well all of the parts of the data center are working and what can be done to cut costs and improve the user experience. While Amazon is an all-purpose four-door sedan, Zynga’s custom-built zCloud is a sports car tuned to one purpose.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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From Flickr user David Stanley

Tumblr has been spending several million dollars per month on web hosting, sources tell VentureBeat.

“You wouldn’t believe the amount they are spending just to keep the site up and running,” said a source familiar with Tumblr’s expenses. “It’s crazy considering they don’t have a real business model figured out yet.”

The work of scaling Tumblr’s backend architecture, which now supports 15 billion page views a month, is a massive job, according to the blog High Scalability. The post compared the blogging platform’s challenges to massive sites like Twitter and Facebook, both of which dwarf Tumblr in terms of employees and funding.

Once you dig into the size of the technical challenge Tumblr is handling on a daily basis, it’s not as surprising as our source made it seem. Tumblr is growing at 30 percent each month and, as High Scalability points out, has 500 million page views a day, a peak rate of ~40k requests per second, ~3TB of new data to store a day, all running on 1000+ servers.

The unique follower model set up by Tumblr presents a one-two punch:

• Data-rich posts full of images, music, and video, much like Facebook
• A Dashboard that lets users follow along in a manner similar to Twitter, with real-time updates coming from hundreds of blogs they follow.

This massive amount of media is all stored on Amazon web services.

“This is the fascinating thing about building a startup these days,” said Bijan Sabet of Spark Capital, an investor in Tumblr who sits on the board, speaking with VentureBeat by phone. “With the elastic cloud, you can reach a fairly massive scale on a limited amount of capital.”

But when a startup goes from being a scrappy, fast growing company to a massive, top twenty property on the web, the cost of having a third party like Amazon supporting your infrastructure can begin to outweigh the benefits. “Building our own data center is something Tumblr will do at some point,” Sabet said. “We raised a significant amount of capital with these challenges in mind.”

Tumblr raised $85 million in September of 2011, back when it had just 13 billion pageviews a month, a round that valued the company at $800 million dollars. “This is not a company with a big burn rate,” Sabet insisted, pointing out that Tumblr still had money left over from the $30 million it raised in December of 2010.

Sources say that with 60 employees and mounting costs on the back end, Tumblr’s total burn rate is several million dollars a month and growing fast. That would still give it plenty of breathing room, however, at least two years based on their last funding.

“Initially the site was designed on a pretty traditional LAMP stack,” Blake Matheny, Tumblr’s director of platform engineering told VentureBeat by phone. “But we reached the end of what that technology could offer us.” The company now has 20 full time engineers on staff. “When we had half a dozen guys, all we could do was fight fires,” Matheny said. “Now we can begin to do some planning for the long term.”

Tumblr is experimenting aggressively with new revenue streams, recently rolling out highlighted posts, which let users pay $1 to attach stickers to individual blog posts. But so far founder David Karp has adamantly resisted the idea of injecting any traditional brand advertising into the site.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Anyone who who follows technology trends has undoubtedly heard the term “cloud service” thrown around a few gazillion times over the past few months. But if you don’t know the difference between terms such as PaaS, IaaS and SaaS, don’t fret — you’re far from alone.

Let’s start at the beginning. “Cloud” is a metaphor for the Internet, and “cloud computing” is using the Internet to access applications, data or services that are stored or running on remote servers.

When you break it down, any company offering an Internet-based approach to computing, storage and development can technically be called a cloud company. However, not all cloud companies are the same. Typically, these companies focus on offering one of three categories of cloud computing services. These different segments are called the “layers” of the cloud.

Not everyone is a CTO or an IT manager, so sometimes following the lingo behind cloud technology can be tough. With our first-annual CloudBeat 2011 conference coming up at the end of this month, we thought this would be a good opportunity to go over the basics of what purpose each layer serves and some company examples to help give each term more meaning.

Layers of the cloud

A cloud computing company is any company that provides its services over the Internet. These services fall into three different categories, or layers. The layers of cloud computing, which sit on top of one another, are Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS). Infrastructure sits at the bottom, Platform in the middle and Software on top. Other “soft” layers can be added on top of these layers as well, with elements like cost and security extending the size and flexibility of the cloud.

Here is a chart showing simplified explanations for the three main layers of cloud computing:

IaaS: Infrastructure-as-a-Service

The first major layer is Infrastructure-as-a-Service, or IaaS. (Sometimes it’s called Hardware-as-a-Service.) Several years back, if you wanted to run business applications in your office and control your company website, you would buy servers and other pricy hardware in order to control local applications and make your business run smoothly.

But now, with IaaS, you can outsource your hardware needs to someone else. IaaS companies provide off-site server, storage, and networking hardware, which you rent and access over the Internet. Freed from maintenance costs and wasted office space, companies can run their applications on this hardware and access it anytime.

Some of the biggest names in IaaS include Amazon, Microsoft, VMWare, Rackspace and Red Hat. While these companies have different specialties –  some, like Amazon and Microsoft, want to offer you more than just IaaS — they are connected by a desire to sell you raw computing power and to host your website.

PaaS: Platform-as-a-Service

The second major layer of the cloud is known as Platform-as-a-Service, or PaaS, which is sometimes called middleware. The underlying idea of this category is that all of your company’s development can happen at this layer, saving you time and resources.

PaaS companies offer up a wide variety of solutions for developing and deploying applications over the Internet, such as virtualized servers and operating systems. This saves you money on hardware and also makes collaboration easier for a scattered workforce. Web application management, application design, app hosting, storage, security, and app development collaboration tools all fall into this category.

Some of the biggest PaaS providers today are Google App Engine, Microsoft Azure, Saleforce’s Force.com, the Salesforce-owned Heroku, and Engine Yard. A few recent PaaS startups we’ve written about that look somewhat intriguing include AppFog, Mendix and Standing Cloud.

SaaS: Software-as-a-Service

The third and final layer of the cloud is Software-as-a-Service, or SaaS. This layer is the one you’re most likely to interact with in your everyday life, and it is almost always accessible through a web browser. Any application hosted on a remote server that can be accessed over the Internet is considered a SaaS.

Services that you consume completely from the web like Netflix, MOG, Google Apps, Box.net, Dropbox and Apple’s new iCloud fall into this category. Regardless if these web services are used for business, pleasure or both, they’re all technically part of the cloud.

Some common SaaS applications used for business include Citrix’s GoToMeeting, Cisco’s WebEx, Salesforce’s CRM, ADP, Workday and SuccessFactors.

We hope you’ll join us at CloudBeat 2011 at the end of the month to explore a number of exciting case studies in cloud services.

Cloud photo via Jeff Coleman/Flickr

Cloud breakdown slide via “Windows Azure Platform: Cloud Development Jump Start” via Microsoft

CloudBeat 2011 takes place Nov 30 – Dec 1 at the Hotel Sofitel in Redwood City, CA. Unlike  other cloud events, we’ll be focusing on 12 case studies where we’ll dissect the most disruptive instances of enterprise adoption of the cloud. Speakers include: Aaron Levie, Co-Founder & CEO of Box.net; Amit Singh VP of Enterprise at Google; Adrian Cockcroft, Director of Cloud Architecture at Netflix; Byron Sebastian, Senior VP of Platforms at Salesforce; Lew Tucker, VP & CTO of Cloud Computing at Cisco, and many more. Join 500 executives for two days packed with actionable lessons and networking opportunities as we define the key processes and architectures that companies must put in place in order to survive and prosper. Register here. Spaces are very limited!

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Xignite is out to democratize access to financial data, which has exploded in the past decade with the onset of real-time, 24-hour trading. It is doing so by making that data more accessible via cloud computing and has just raised $10 million in a second round of funding, it announced today.

Financial experts once accessed the data exclusively from terminals such as Bloomberg machines or trading computers. But now wider swaths of people want to access data in real-time from the web and mobile apps.

The problem is that financial data has exploded in volume. The financial markets generate 100 times more data than they did just five years ago.

Converting that data so that it can be delivered to the right places is an expensive mess. The data are more plentiful because of high-frequency trading, the rise of regional exchanges all around the globe, and an ever-expanding pool of financial instruments.

The result is huge infrastructure costs for companies that need to receive, reformat, or filter the firehose of data coming from various stock markets.

Xignite’s offering will make financial markets more transparent, as more consumers and businesses will be able to access market data and understand it immediately.

“This is the democratization of data,” said Joel York (pictured below), chief marketing officer and general manager of direct sales for Xignite, in an interview.

The San Mateo, Calif., company will use the new funding to grow its sales and marketing operations and extend its Xignite platform.

StarVest Partners led the round. Also participating were John Steffens of Spring Mountain Capital and former vice chairman of Merrill Lynch; Altos Ventures; Startup Ventures; and Peter Caswell.

Xignite hopes to transform the way that financial services firms, buy, sell, and consume the core market data required to run their businesses, said Deborah Farrington, general partner at StarVest Partners.

Xignite directly accesses data in the exchanges and filters it as needed for a wide variety of clients, who can then access it from the web or mobile devices. Apps that access financial data are multiplying like weeds, but there’s no easy way to feed the data directly from the stock markets to the apps themselves.

“There’s a change in the way people get their information,” York said. “The question is, how you get the data to the devices?”

The Xignite market data cloud platform makes the data available via the cloud, or web-connected data centers, as if it were a utility selling electricity. Businesses can buy the data online in an automated process and plug applications into the cloud within minutes. They simply plug into Xignite’s applications programming interfaces (APIs) and access data in a variety of forms. Xignite sells subscriptions to the data for as low as $600 a year and as high as $100,000 a year, depending on the data. The data are delivered in 5 milliseconds to 50 milliseconds.

The alternative to this kind of platform costs a lot of money. Businesses have to invest in custom computing infrastructure to take the firehose of data that is sold by the exchanges, then they have to do the programming necessary to access the data and present it to users in an understandable format. Rivals include Thomson Reuters, Bloomberg, and custom financial houses. Xignite believes it can cut costs 90 percent compared to custom coding options, and it can produce results in two days, compared to six months for custom coding.

Xignite can also lower costs for big banks and other financial companies. Businesses can put their market data onto the XigniteOnDemand private label platform. That way, they can get their data in the hands of almost anyone around the globe. Participants include CME Group, BGCantor, Pearson and Nasdaq OMX.

Stephane Dubois, chief executive of Xignite, worked on an idea for a business for a while and then switched to the current manifestation of Xignite in 2005. The company previously raised a $5 million round. Demand really took off around 2008, York said.

Now it has 900 clients in 47 countries. Those clients access a piece of data more than 5 billion times per month. Customers include Citi, GE, Wells Fargo, ING, BNY Mellon, Natixis, Forbes.com, SeekingAlpha, ExxonMobil, Starbucks, Netsuite, and Barrick Gold.

Xignite has 30 employees and hopes to double that number in the next year or two.

The company’s web application will basically serve as a front-end access point for the files stored on private servers with EMC’s Documentum software. That means that any changes made to the file on Box.net will automatically carry over to the file stored in Documentum, and vice versa. The idea is to ensure companies that use Documentum give their employees multiple ways to access files stored on in-house servers — such as through a BlackBerry or an iPad.

It does fracture one of the major benefits of in-house servers — which safely store information behind multiple firewalls and are typically protected from outside attacks. Box.net’s servers are secure and follow the same governance and regulatory requirements that major companies that typically employ EMC’s products need, Levie said. But it still might not match the kind of security requirements major companies have to ensure intellectual property isn’t stolen or tampered with.

But this is a pretty significant deal between a massive traditional provider of infrastructure for large enterprises and one of the darlings of the cloud-based enterprise world. The deal could indicate a new trend where some of the more traditional enterprise powerhouses, like Cisco and others, end up making deals with newer cloud computing companies.

“We’re insanely excited because of the credibility that EMC has in the enterprise space,” Levie said. “This does represent the kinds of partnerships that could emerge between [software as a service] players and traditional infrastructure players.”

The deal was a year in the making, with negotiations ramping up in the last three months. Box.net hired former EMC chief marketing officer Whitney Tidmarsh as general manager of the company’s enterprise division and product line last month, which was apparently enough to speed things up and help Box.net and Levie close the deal with EMC. He didn’t disclose any financial details about the new agreement.

Box.net is basically an enterprise version of Dropbox — it lets businesses store documents on remote servers that employees can access from almost any Internet-connected device. The online app also lets employees modify documents and files within the actual storage space without having to download the file. They can also comment on files and changes and use the web app as a way to collaborate with employees on the other side of the country.

The company is still in the process of ramping up its staff and will be moving to a newer office space soon because its staff continues to grow, Levie said. The company recently secured a $48 million funding round that included investors like Meritech Capital and Emergence Capital. At the time, Levie said the company would use the funding to double its sales and development teams and move to an additional office in Palo Alto, Calif.

And it looks like the plan worked. Facebook’s latest data center in Oregon will use 38 percent less energy than the rest of its data centers and will cost 24 percent less to deploy and maintain than the rest of its centers. Facebook seems pretty proud of its accomplishment, too, since it is opening up the specifications of its new data centers and servers to the public and creating an open source project, called Open Compute Project, to build a more efficient data center.

The project is a web site that keeps track of the latest tweaks and modifications Facebook makes to its new hardware specifications. The company wants outside readers to follow the changes and drop in suggestions about improvements to the data centers and hardware — such as suggesting a specific type of fan or power supply. Facebook said it is working with Dell, Hewlett-Packard, Rackspace, Skype and Zynga to develop more efficient servers and data centers through the project.

As part of the project, Facebook has published the specifications of the hardware in its newest data center. It also published the specifications for the data center housing the servers. The company first announced it would build a data center in Oregon in January last year. Facebook intended to make the data center more green by reusing the air to cool servers to heat the office and removing the need for an uninterrupted power supply that would sap additional electricity unnecessarily.

Crowd-sourcing has worked in the past for software projects — ranging from open-source programming projects like Linux to video game development. This is a pretty high-profile attempt at crowd-sourcing the creation of an efficient data center, which might prove to be a good way to offload the costs of having to deploy and test new hardware in-house. That’s assuming it is able to build up a strong community around the project. The landing page has received nearly 700 “likes” since it was announced just this morning.

Electric cars vs. public charging infrastructure — Electric cars for the masses are arriving. The Nissan Leaf and partially electric Chevrolet Volt already arrived as of December. Other models from Ford and Toyota are coming within the next year or two, along with releases from Tesla, Coda, Wheego and Think. Advocates argue that the cars will be fine without public charging stations thanks to home charging, while skeptics say sales will be stunted by leery customers until charging infrastructure is built out. Companies like Ecotality and Coulomb are currently rolling out about 20,000 chargers nationwide with the aid of Department of Energy funds. Power plant company NRG Energy has also launched a privately financed charging system in Houston, Tex. with various charging plans.

Atlantic Wind Connection — Trans-Elect is planning a transmission backbone that will run from New Jersey to Virginia to enable offshore wind on the Atlantic Coast. Google and Good Energies have taken majority stakes in the first phase of what is estimated to be a $5 billion project, which seems to have gotten good feedback from the government and environmentalists. But is it too big a risk? Wind expert and former Massachusetts assistant environmental secretary R.J. Lyman, who advocates for smaller wind projects, outlined the risks and rewards:

“The Atlantic connection is an important contributor to some of the infrastructure challenges. That’s like building a highway out into the cornfields of Iowa and hoping that McDonalds and Walmart and homebuilders will build on the interchanges. It’s a big bet. Maybe they’re right. But they’ve never done anything anywhere near this scale. Their largest project was one-tenth a size of this but … you have to start somewhere.”

Offshore wind — Offshore wind would solve a multitude of landbound wind farms’ ills — wind is typically stronger and steadier offshore, and turbines could be located far enough out of sight to avoid complaints about marring the landscape. This isn’t quite an infrastructure project, but could spur them —  the U.S. government is streamlining the permitting process for offshore wind development on the Outer Continental Shelf on the East Coast, which could provide more than 1,000 gigawatts in wind energy, according to Bloomberg.

Biofuels stations – Clean-fuel company Propel announced plans to build 75 biofuel stations across California by 2011, thanks to $10.9 million in federal and state funding. The stations will sell E85 and biodiesel.

Wind energy for the Southern U.S. — Pattern Energy  is proposing a 400-mile transmission line to export wind from West Texas, which is the top wind-producing region in the country. If it’s successful, buildings in the Southeast could be wind-powered by 2016.

Wind energy within Texas — Texas regulators have assigned $4.93 billion of transmission projects to transport wind from the West Texas and Panhandle regions to more highly populated areas like Dallas and Austin. The state’s Public Utility Commission says the projects will eventually transmit 18,456 megawatts of wind power. Dallas utility Oncor is planning to build about 850 miles of transmission lines to transport wind from West Texas.

[Image via Flickr/robstephaustralia]

Infrastructure seems to be the sexy acquisition target in 2010. This is the second major purchase of an infrastructure provider in just a few months. Hewlett-Packard announced it would pick up 3Par, a cloud storage provider, for a cool $2.4 billion back in September.

Novell has two significant business operations. It operates a suite of enterprise software products that range from collaboration to security. It also develops the SuSE Linux operating system and manages an online open source development community for the operating system.

As part of the agreement, Novell will be split into two different business units operated by Attachmate. Novell’s SuSE will be spun out into a separate business unit, and the remainder of the company will operate under the Novell brand. Novell bought the SuSE brand and trademarks back in 2003 and was a big promoter of the open source operating system in its infancy.

Novell is also selling a chunk of its intellectual property to a batch of technology companies organized by Microsoft for $450 million. The company didn’t specify what projects it was coughing up to the rest of the world. But given Microsoft’s position on operating systems and the enterprise, it’s possible Microsoft is using this time to pick up some of the enterprise market that’s operating on SuSE. Microsoft recently extended its deal with Novell to help develop better interoperability between Windows and the SuSE Linux operating infrastructure.

What isn’t clear right now is the fate of Attachmate. The company could use this as an opportunity to go public through a reverse merger, or it could remain a privately held company. Attachmate is currently owned by Golden Gate Capital, Francisco Partners and Thoma Bravo. We’ve contacted Attachmate and Novell to try to find that out and will update as soon as we know.

Investors were all over the news. Novell’s shares were up about 6 percent today to $5.96. The share purchase price is about a 28 percent premium to the shares’ closing price on March 2, when the company entertained an acquisition from a private firm for $5.75 per share. Novell rejected that offer, saying it undervalued the company. It represents a 9 percent premium to yesterday’s closing price, $5.60.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Motorola announced today that it would be selling its wireless equipment division — which supplies wireless infrastructure to cellular carriers like Verizon and Sprint Nextel –  to Nokia Siemens for $1.2 billion.

The deal would land Nokia Siemens — a joint venture between its Finnish and German parent companies — relationships with more than 50 wireless operators, and “strengthen relationships with others.” The division provides products and services for a variety of wireless networks. According to the press release, it’s a “market leader in WiMAX [4G network technology], with 41 contracts in 21 countries; has a strong global footprint in CDMA with 30 active networks in 22 countries; and a robust GSM installed base, with more than 80 active networks in 66 countries; and excellent traction with LTE early adopters.”

Based on the division’s revenue, Nokia Siemens expects the acquisition to make it the No. 2 wireless infrastructure vendor globally, the No. 3 vendor in the US, and Japan’s No. 1 foreign vendor.

When the deal closes at the end of the year, more than 7,500 employees will move to Nokia Siemens, which has significant research and development operations in the US, China, and India. Motorola will retain its wireless infrastructure patent portfolio as well as its iDEN technology that powers the push-to-talk feature on Sprint Nextel phones.

Motorola has long talked about dividing up its wireless business. It will be spinning off its handset business as Motorola Mobility in the first quarter of next year. Motorola Solutions, which caters to government and corporate clients with products like bar-code scanners and police radios, will be the remainder, according to the AP.

Motorola shares rose 21 cents, or 2.8 percent, Monday morning.