Why Ericsson just became the biggest owner of cloud startup Apcera

Swedish telecom Ericsson demonstrated a big commitment to the cloud business today, by announcing that it’s taken a majority stake in Apcera, a startup with software for running applications in clouds or companies’ data centers.

The deal gives new cloud capabilities to Ericsson but lets Apcera remain a standalone company, according to a statement on the news.

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On the surface, the deal puts Ericsson in the same camp as other telecommunications companies that have shelled out to enhance their cloud offerings. CenturyLink, NTT, and Verizon, among others, have already made cloud moves. Now Ericsson has set itself up to gain cloud mindshare.

But more deeply, the deal gives Ericsson distinct technology that’s more than just a platform as a service for building and deploying applications. Apcera lets companies create, run, and manage applications in ways that conform to security and governance policies. Admins, security, and IT can dictate how their computing infrastructure gets used and who can use it. And with that increased control, more companies could feel comfortable using the cloud.

“I honestly think that this company and this deal [are] absolutely catalytic for everything being in a cloud environment over the next few years — that there will actually be a time before this deal and after this deal,” said Jason Hoffman, Ericsson’s vice president and head of product line cloud software, in an interview with VentureBeat.

Hoffman joined Ericsson from cloud provider Joyent last year. The Apcera deal marks the first major news to come from Ericsson since then.

Companies might have been reluctant to place applications and data on clouds, Hoffman said, because it’s impossible to know if everything is where it was originally placed, who’s looking at it all, and who’s modified it. But if companies have ways to see that sort of information and control where everything goes, perhaps the use of clouds could skyrocket.

Apcera’s tools can operate with the same systems companies already use for launching applications: the Amazon Web Services public cloud, VMware software for managing data center infrastructure, and OpenStack open-source software.

The startup’s customers include Ericsson, as well as financial services, media, and other telecommunications companies, said Derek Collison, founder and chief executive San Francisco-based Apcera.

Apcera’s previous investors include Andreessen Horowitz, Kleiner Perkins Caufield & Byers, and True Ventures. The startup has taken on $7.2 million, including a $2.2 million seed round in 2012.

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The startup now employs 23 people. “You can imagine that we will quickly be over 100 as fast as we can and keep going from there,” Collison told VentureBeat.