Skytap Banks $45 Million VC to Move Legacy Apps to Cloud

Moving apps that work well for organizations in data centers but haven't been retrofitted to work in cloud deployments is a common inhibitor for an enterprise moving to a cloud-based environment.


Skytap, a global public hybrid cloud provider that specializes in moving legacy apps to the cloud effectively, revealed Aug. 22 announced that it has closed $45 million in Series E funding.

Goldman Sachs Private Capital Investing led the round, which also included participation from existing investors.

The Seattle-based company said the new funding comes during a period of growth. Skytap said its total sales more than tripled year-over-year in Q2 2017, because several Fortune 500 organizations in health care, retail, financial services, media and more have adopted Skytap Cloud to modernize conventional enterprise applications.

Skytap's primary offering is designed to provide end users with the ability to quickly create cloud-based virtual environments using self-service tools and automated procedures. The virtual environments can be configured to provide applications, networking, collaboration capabilities and other capabilities to allow businesses of any size to create ad hoc desktop and network services with little or no support from IT staffers.

Older Apps Are Hard to Retrofit to Cloud

Moving apps that work well for organizations in data centers but haven't been retrofitted to work in cloud deployments is probably the most common inhibitor for an enterprise as it tries to move to a mobile or cloud-based environment. Employees simply want to use apps with which they are familiar; retraining them on new apps because of a move to the cloud is costly, time-consuming and often detrimental to morale.

Recent Gartner research found that, "through 2017, 20.4 percent of most organizations' IT budgets will be allocated for spending on cloud and cloud-related services." While cloud services are growing rapidly, the majority of enterprise IT budgets remain locked in the data center because it is difficult to move them efficiently to a cloud-based deployment.

Enterprises need a better way to migrate and modernize those core business applications. Skytap Cloud is specifically designed to enable this transformation, the company said.

Skytap said its existing customer upgrades grew 130 percent YoY in Q2 2017, while the company’s average revenue per customer grew 60 percent in the same period. Three of the company’s top five customers were obtained this year and nearly 60 percent of Skytap’s revenue now comes from large enterprises.

Cloud Utilization Has Grown 10-Fold in Three Years

Skytap said its cloud utilization has grown 10-fold in less than three years as the company expands its product capabilities to address the entire breadth of the software development lifecycle.

Skytap Cloud claims to be the only Infrastructure-as-a-Service (IaaS) provider that supports IBM’s AIX operating system, in addition to Windows and Linux. This integration provides the most direct path for enterprises to migrate legacy AIX applications to the cloud and modernize them in-line with business needs.

Earlier this year, Skytap released Skytap Container Management, which enables IT organizations to develop, deploy, and run traditional enterprise and containerized applications together in Skytap Cloud.

For more information about Skytap Cloud, go here.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 15 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...