Engine Yard Raises $15M for Rails Hosting

More cloud funding: Engine Yard announced a Series B financing round of $15 million to further develop its cloud platform.

Engine Yard, a hosting provider specializing in hosting Ruby and Rails apps, today announced a Series B financing round of $15 million led by New Enterprise Associates, with investment from Amazon.com and Benchmark Capital (which earlier supplied $3.5 million in Series A funding).

Engine Yard used its first round of financing to build hosting clusters in Sacramento, New Jersey and London. The company's primary hosting operation is based in the Herakles Data facility in Sacramento, and it also hosts equipment with Equinix.

The new funding will be invested in R&D for an upcoming cloud computing cluster platform. Amazon's investment is another sign that the company's interest in the growth of cloud computing extends beyond its AWS platform. "We believe that cloud computing will be a large industry with companies providing a range of different services," said Jeff Blackburn, Amazon.com Senior Vice President for Business Development. "Engine Yard is passionate about providing their customers with scalable and reliable cloud-based infrastructure for their Ruby on Rails applications."

"Engine Yard's exceptional track record and substantial mindshare within the open-source community position the company to be at the forefront of two key emerging markets in the computing space: Ruby and Rails and cloud computing," said Peter Sonsini, a Partner at NEA who joins Engine Yard's board of directors. "I look forward to working with the Engine Yard team to build the business and take the company to the next growth stage."

There's some analysis of the Engine Yard funding from Nik at TechCrunch IT:

The ambitions at Engine Yard are high, and it is reflected in the amount of funding they have raised as well as the caliber of those investors. Their sights are set on competing not only with Java in the enterprise, but the numerous billion-dollar vendors currently providing app servers, tools and more as part of the J2EE stack. While Ruby, and Rails in particular, are increasing in popularity amongst startups, the impact within the enterprise to date has been limited (and almost insignificant on a revenue basis).