Zenoss Raises $4.8 Million in Venture Capital Funding

The company will use the funds to expand open source IT management offerings.

Boulder Ventures and Intersouth Partners Lead this Investment in the Next Frontier for Open Source Software.

Zenoss, Inc., a leading provider of open source IT operations management software, announced recently the closing of a $4.8 million financing round, led by Boulder Ventures and Intersouth Partners. Zenoss will use the capital to further product development, expand infrastructure and support for its growing community, and build out commercial operations.

Also participating in the round are NEA founder Frank Bonsal; SourceFire CMO Michele Perry; Amplifier Venture Partners represented by former IBM Tivoli executive Marty Frederickson, and the Maryland Department of Business and Economic Development. In connection with the funding, Jonathan Perl from Boulder Ventures and Don Rainey from Intersouth Partners will join Zenoss’s board of directors.

“IT management is the next large software category to be disrupted by open source,” said Jonathan Perl, General Partner, Boulder Ventures. “Zenoss is very well positioned to lead this revolution and capitalize on an important market opportunity.”

“Companies will spend over $8 billion on IT management software this year, yet most organizations still struggle to monitor and manage their growing IT infrastructures,” said Bill Karpovich, Co-Founder and CEO of Zenoss. “We provide a new alternative to the bloated and over-priced products from IBM, CA, BMC, and HP that dominate the market today.”

Erik Dahl, Zenoss Co-Founder and CTO, first began development of the company’s software product in 2002. Zenoss’s application provides the complete set of functionality needed to monitor an organization’s entire IT infrastructure, including network devices, servers, applications and environmental controls in a single, integrated package. Mid-market organizations in particular benefit from this offering because they previously could not afford this depth of functionality.

Unlike first-generation open source management utilities that were hard to use and lacked support, Zenoss’s system is easy for administrators to set up and maintain. While other venture-backed open source IT management providers now release only a watered-down version of their software as open source, Zenoss offers a complete solution that is available as an entirely free, downloadable product. Similar to other successful open source companies — such as Red Hat and JBoss — Zenoss generates revenues by providing commercial-grade subscription-based support, training, partner programs, and other value-added offerings.