Ruby, Rails Cloud Provider Heroku Gets $10M Infusion

Heroku, a Ruby cloud application platform-as-a-service provider, receives $10 million in new venture capital funding from a group led by Ignition Partners, which is packed with former Microsoft executives.

Heroku, a provider of Ruby cloud application platform-as-a-service products, announced May 11 that it has received $10 million in new venture capital funding from a group led by Ignition Partners, a company heavy with former Microsoft executives.

In addition to the funding news, Heroku announced, "John Connors, general partner with Ignition and former CFO [chief financial officer]/CIO of Microsoft Corporation, has joined the company's board of directors." Although the Series B round of funding was led by Ignition, other participants are "existing investors Redpoint Ventures, Baseline Ventures and Harrison Metal Capital."

The announcement said the funds "will be used to accelerate Heroku's rapid growth and technology lead as customers shift more and more aggressively towards building, running and managing apps in the cloud. Heroku was founded with seed money in 2007 from Y Combinator."

"We are excited to have John and Ignition join our team as we aggressively expand our business and, together with our customers and partners, fundamentally shift the status quo in application platforms and development," Heroku CEO Byron Sebastian said in a statement. "Tens of thousands of developers are proving every day: The industry is ready for a change. Heroku and its partners are providing the productivity, openness and resiliency in a cloud platform that represents a real, inexorable shift away from the old way of doing business to a new, more agile, service-based approach."

The new investment is evidence of the continued emergence of the Ruby programming language and the Ruby-based Ruby on Rails framework as key components in enterprise application development schemes. In addition to Heroku, companies such as Engine Yard and New Relic have made big splashes with enterprise customers opening up to Ruby and Rails. And enterprise users of Ruby and Rails include, IBM, JP Morgan, NASA, Oracle, Twitter and Yahoo, among a host of others.

Meanwhile, this is not the first time Ignition Partners has invested in a company run by Sebastian-who was formerly an entrepreneur in residence at Ignition. In 2004, Ignition invested in SourceLabs, an open-source software and services startup Sebastian founded. And Ignition founding partner and former Microsoft executive Brad Silverberg joined the SourceLabs board. Anticipating a return from another successful venture led by Sebastian, Ignition joined the latest round of Heroku funding.

"The consumerization of IT is one of the major themes of our investment strategy: Trends like cloud computing are driving tremendous, transformative improvements in productivity, agility, efficiency and reliability," Connors said in a statement. "Heroku's team, approach and product have given it a significant and increasing lead in the exploding cloud application platform market. This is demonstrated by the 60,000 apps running on Heroku's platform, the dramatic business value delivered to customers by those apps, the huge popularity of the company's add-on system and [the] vibrancy of the ecosystem building around Heroku. We see tremendous opportunity for companies of all sizes working with Heroku to build new applications or extend their enterprises to deliver value to customers."

Heroku officials said the company provides a "more productive way to build, run and manage applications, using sophisticated runtime technology for cloud scalability and resiliency combined with tools and automation for developer productivity. Heroku's user base of tens of thousands of developers are creating ... Web applications used on the hottest new technology like the iPad, iPhone and on Twitter, as well as in Global 2000 companies."

"By 2014, up to 33 percent of all new server-side Web application software will be software services and applications created and deployed within a cloud-based APAAS [application platform as a service], and executed in support of an enterprise's processes," Gartner Research analyst Eric Knipp said in the Heroku statement. "Development frameworks have attracted an entire generation of new developers-citizen developers if you will-that are looking for faster, simpler and more intuitive development platforms. Platform as a service, or APAAS, has become an important center of gravity for development teams to get to market quicker, going around internal IT. With grassroots support coming from the business teams, we are seeing more and more traditional enterprises creating serious applications using Ruby, forging inroads into the heart of enterprise IT."

"When we founded Heroku, we set out to build a completely new way of deploying and running applications," James Lindenbaum, co-founder of Heroku, said in a statement. "Today we are doing just that. The validation, expertise and muscle provided by Ignition's participation is not only a huge boost to our vision, but also a real testament to the strength of the Ruby language and community. It reinforces our view that cloud application platforms and service-based approaches are having a fundamental, transformative impact on the industry at large."