By Staff Report Thursday, July 1st, 2010

In one of the largest technology deals of recent years, Santa Barbara-based cloud computing software firm Eucalyptus Systems raised $20 million in venture capital on July 1 from a group led by Menlo Park-based New Enterprise Associates.

With the deal, Eucalyptus has raised $25.5 million since launching last year. Earlier this year, the firm brought aboard CEO Marten Mickos, who led MySQL, the open-source database firm whose technology powers Facebook and other Web sites, from a startup to its $1 billion sale to Sun Microsystems in 2008.

“Hybrid clouds are the vision of the future,” Mickos told the Business Times a few days before the funding round was announced. “In terms of the product, we are the pioneer in the field, and nobody has a product that is as mature as ours. That gives us a great lead in the market.”

Invented by a team of UC Santa Barbara professors led by Rich Wolski, Eucalyptus’ software runs hybrid clouds. Cloud computing means Web-based computing, where heavy number-crunching and data storage are handled by large groups of computers linked together and accessed over the Internet. Public clouds are available from Amazon and other firms, or companies can build their own private clouds internally. Eucalyptus’ software allows public and private clouds to work together.

Still in its infancy, the cloud computing space is expected to expand rapidly in the next few years.

“We’ve been studying this market for some time and early on identified infrastructure software for cloud computing as a major new opportunity,” Peter Sonsini, a partner at New Enterprise Associates who will take a seat on Eucalyptus’ board of directors, said in a news release. “With a scalable, standards-compliant and mature solution — as well as unmatched adoption across the globe — Eucalyptus has emerged as a clear leader in this space.”

At $20 million, the Eucalyptus deal also appears to be the largest disclosed single round of technology funding in the Tri-Counties this year. Eucalyptus is among a handful of software companies that have secured big rounds of capital in recent years. Cloud computing resource management firm RightScale has raised more than $22.2 million since 2006, and Web software firm AppFolio has raised more than $30 million since its launch.

The companies also share common investors. Benchmark Capital and BV Capital, two of Eucalyptus’ early investors, joined in the most recent round. Benchmark also has an investment in RightScale, and BV is an investor in AppFolio.

“If you look at a heat map of the major leading cloud computing companies in the world, Santa Barbara would be a bright spot way out of proportion with our population,” Michael Crandell, CEO and a founder of RightScale, told the Business Times a few days before the Eucalyptus funding announcement.