As PaaS funding winds down, Standing Cloud raises $3M

Although it appears significant venture capital investment in Platform-as-a-Service startups is drawing to a close, Boulder, Colo.-based Standing Cloud was able to raise another $ 3 million, it announced on Thursday. The money comes from existing investors Foundry Group and Avalon Ventures, bringing Standing Cloud’s total investment to $ 8 million. The company likely can thank its unique spin on PaaS for keeping it in investors’ good graces.

Unlike more-popular PaaS options such as Heroku or Microsoft Windows Azure, Standing Cloud isn’t so much about automation and scalability as it is about choice. Developers choose the infrastructure cloud on which they want to deploy (you name it, Standing Cloud supports it), build their application stack (i.e., web servers, database, programming language, etc.), port their code and then launch their server. Standing Cloud also hosts a variety of open source applications that customers can choose to launch, as well, which takes the platform into SaaS territory. It’s not as sexy as what some other PaaS providers are doing, but it’s very functional and probably very approachable for a large number of small businesses.

At this point, though, PaaS is becoming passé, at least with regard to general-purpose platforms for hosting web applications. It’s not that PaaS adoption has peaked — far from it, actually — but that the market seems to be getting saturated with regard to how many platforms it can support. Heroku, Google App Engine, Windows Azure, Amazon Elastic BeanStalk, Red Hat’s OpenShift are all backed by the deep pockets of public companies. In the startup realm, DotCloud, AppFog and CloudBees are all operating on double-digit-millions in funding and are regularly expanding their capabilities. Then there’s Standing Cloud, the similarly application-focused BitNami and veteran Engine Yard.

Assuming the world doesn’t need dozens of PaaS offerings — there are only a handful of legacy application platforms that PaaS providers are trying to displace, after all — it’s hard to imagine what investors would have to see to find a new PaaS investment worthwhile. Maybe it’s a focus on a new breed of social and mobile developers, or a business model that blends SaaS and PaaS in such a manner as to make those labels irrelevant. Thankfully for anyone trying to build those next-generation platforms, projects such as VMware’s Cloud Foundry help eliminate the need to invest in foundational PaaS capabilities so companies can just focus on differentiation.

But when it comes to broad platforms targeting applications generally, it seems investors have picked their horses and are backing them to the finish line. Hopefully, that means a wave of innovation to push the cloud platform discussion to the next level.

Image courtesy of Standing Cloud.

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