Firms aim to make servers serve more

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By Vishesh Kumar

(IDG) -- There are only so many servers a company can buy. They're costly, they take up space, and they require a lot of attention. So now the venture capitalists who forked over the money to finance dot-coms' server purchases are trying to figure out how to make using them more affordable.

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That's why Ejasent, based in Mountain View, Calif., has investors lining up to give it money. The firm expects to close a $15 million financing round by October, and CEO Tim Unger says he may have to take even more money to avoid turning away desirable investors. The round is being led by Crescendo Ventures, which also contributed to the firm's $1.5 million seed financing in June 1998 and its $26 million round in August 2000.

Ejasent's pitch? It lets companies obtain additional capacity to run software applications, like processing e-mail or conducting e-commerce transactions, without having to buy more servers (or more space at a Web hosting firm, which would have to buy more servers).

Ejasent's service, dubbed Apps on Tap, allows its customers to store and run business software applications on a network of servers, which customers will tap into only when they need it. Essentially, companies rent processing time from Ejasent rather than doing it on their own or hiring an ASP to run an Internet operation for them. Ejasent inked a deal in June with Web hosting company Exodus that will give Exodus customers access to the service.

Other startups that offer similar technologies also are attracting financing. Sockeye and NetVmg, for instance, recently closed rounds of $26 million and $57 million, respectively. Another Ejasent rival, backed by Benchmark Capital and Sequoia Capital, is expected to emerge from stealth mode in August.

With computing undergoing a historic shift from desktops and big corporate mainframes onto the Internet, Ejasent can count on seeing more competitors. And VCs appear ready to back them.