Indianapolis-based Scale Computing, a small to midsized business (SMB) storage specialist, announced today that it had raised $12 million in a Series D round of funding. Heron Capital Venture Fund led the round, which included newcomer Reservoir Venture Partners and several existing investors.

According to Scale Computing, the money will go toward accelerating market momentum for the company's HC3 "datacenter-in-a-box" product slate, a line of virtualization-heavy, converged systems that leverage open source to blend servers and storage into a "virtualized infrastructure-as-an-appliance" offering. HC3is a progression of the company's Scale Computing Storage Systems, clustered systems managed by the firm's Intelligent Clustered Operating System software.

Charting a somewhat different course from converged IT vendors like Dell and Hitachi, Scale Computing is targeting first-time virtualizers and small IT shops. Prices start at under $25,000 for a 3-node HC3cluster, including servers, storage and virtualization software, that can handle 15 to 30 virtual workloads, by the firm's estimates.

In the short time HC3 has been in the market, demand has been brisk, says Scale Computing CEO Jeff Ready. "We are just four weeks removed from the launch date, and we are already approaching 100 HC3deployments," he said in a company statement.

And there's plenty of room to grow, adds Ready. He hopes to make a splash with midsized firms still grappling with virtualization, particularly the licensing terms imposed by some vendors.

"There is a huge opportunity unfolding for us here in the midmarket with over one million companies in the US looking to virtualize for the first time. HC3offers them an alternative to being locked down by EMC and VMware by providing a product that eliminates ongoing licensing fees for the hypervisor, leverages open source technologies, and simplifies support with a single vendor," said Ready.

IT convergence is here to stay, says Ready. He claims that some early HC3adopters have experienced cost reductions of 75 percent and required only one-tenth the effort to get up and running compared to traditional systems.

Those results are bound to grab the attention of IT execs struggling with runaway IT complexity, says Jeff Boles, a senior analyst and Director of Validation Services at the Taneja Group.

"Irrespective of market or niche, the idea of truly converged computing technology that seamlessly combines all the key elements of the data center into one, flexibly scalable system resonates. We’ve seen this ourselves from hands-on time that demonstrates a better than 4x improvement in time and effort required for virtual machine deployment and management," he observed.