Cisco to Acquire Private Cloud Vendor Metacloud

Networking giant Cisco Systems said today it will acquire Metacloud, a privately held startup focused on selling private cloud computing services to companies.

Cisco says Metacloud fits with its larger vision to build what it calls a “network of clouds.” It said in March it would spend $1 billion on an initiative it calls Intercloud. That plan calls for Cisco to deliver cloud services through a network of third parties rather than build a distinct service to compete with the likes of Amazon Web Services or IBM SoftLayer.

Financial terms of the Metacloud deal aren’t being disclosed, but the Pasadena, Calif.-based company had, according to Crunchbase, raised a combined $25 million in three funding rounds, the most recent of which was a $15 million B round led by Pelion Venture Partners, Silicon Valley Bank and UMC Capital. Other investors include AME Cloud Ventures, Canaan Partners and Storm Ventures.

Metacloud has two products, both of them based on OpenStack, the open source cloud operating system. One product runs in a company’s own data center — often referred to as “on premise.” The other was a hosted private cloud that it offered as a service.

Some companies are attracted to the idea of so-called private clouds because they offer flexibility similar to using a cloud service like AWS or SoftLayer, while allowing the customer to maintain control of data they may consider too sensitive to put in the hands of a third party. Numerous companies stepping into the cloud computing services business — which, aside from Cisco, include IBM and Hewlett-Packard — often argue in favor of a hybrid approach that combines privately-run cloud infrastructure with additional capacity from an outside service provider.

Cisco’s deal comes on top of last week’s acquisition by HP of Eucalyptus Systems. It’s another cloud software operation that helps companies manage the various cloud services they use — private and public. It also makes it easy to move computing jobs in and out of Amazon’s cloud.