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Venture capital funding is at a historic low, yet at least eight software startups announced VC funding in the past two weeks for a total of more than $60 million. Their products are all very different, but they have one thing in common: they're delivered in a software-as-a-service model.

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In a relatively brief period, VMware has gone from a small company to 2008 revenues of $1.9 billion. At VMworld in San Francisco, I got a sense of how that rapid growth leads to growing pains. For one thing, some of your best customers prefer your little competitors to you.

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Apptio's newest service tackles chargebacks for server virtualization.

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Egnyte, which blends local and online storage for SMBs, pulled in millions in VC investment today.

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Investments rose 15 percent in the second quarter of 2009, with IT earning the most VC dollars. But funding remains significantly low compared to previous years.

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Startup Altor Networks launches a new version of its VM firewall that's built for speed and includes an intrusion detection engine from Sourcefire.

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Paglo announced a new service that lets IT send and store logs in the cloud. Logs can be searched and analyzed on demand.

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SaaS startup Paglo has added monitoring for Amazon's cloud to its IT search and management service.

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Eucalyptus Systems, the startup behind the open source cloud computing software, has identified its first two customers: NASA and Eli Lilly. That's an impressive start for a company that's barely three months old.

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Little known fact: Apple and Microsoft were both started without venture capital and both started in a recession. So what's your fledgling company need to do to navigate the current economic climate?

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McKinsey & Co. has come under fire for suggesting that cloud computing may be more expensive than running servers inside your own data center. I have more bad news for would-be cloud users--the costs may be even higher than McKinsey suggests.

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Cassatt, a six-year-old enterprise software company, is "close to the end" of operations, according to Forbes. Cassatt had positioned its data center management software as a platform for private clouds, but the startup's steep licensing fees are apparently more than IT departments are willing to spend in this economy.

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Venture capital funding may have dropped overall in the first quarter of this year, but not all sectors suffered as seen by the multimillion dollar deals granted to the likes of Meru, Beceem, Stokes, Lavante, iScience, and Ausra.

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The release of InformationWeek's Startup 50 raises the old question: Should IT departments do business with startups at all? The unequivocal answer is yes, and here's my advice on how to pick the right ones.

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Mi5 Networks, which makes a Web security appliance, will be integrated into Symantec's product line later this year.

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Innovation is alive and well, as demonstrated by the companies on our first-ever list of 50 compelling young technology companies

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Second and third rounds of financing for startups often come at critical times, as three different IT software firms found out this week.

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It sounds counterintuitive, but you're better off investing in your idea, building your social network, and attracting potential customers than spending hours refining how a plan looks on paper.

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Google's loss is Accel Partners' gain as Sukhinder Singh Cassidy has joined the venture capital firm as its new CEO-in-Residence. Does the position include access to a world-class cafeteria?

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Several Silicon Valley startups are celebrating fresh infusions of cash this week as the venture capital economy may be showing signs of a comeback.

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Three cheers to the PR firm or freelancer behind the publicity for Kosmix, which is a startup company offering an alternative approach to aggregating Internet search results. One recent story asked that it not get compared to Google, and then compared it.

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Digital Reef swings for the data management fences by indexing and classifying all unstructured data in the enterprise. Top applications include e-discovery and storage management.

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This April, InformationWeek will unveil the Startup 50, the top tech companies shaking up IT. You can help decide which startups make the cut by voting for the most innovative, disruptive companies.

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Startup Paglo, which offers SaaS-based IT management based on search, now collects Netflow data to help customers monitor bandwidth usage by users, applications and protocols.

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Pay-as-you-go online storage services are a flexible way to deal with exploding data volume. For 25 cents per month, you can rent a gigabyte of storage from Nirvanix. But is that any way to buy enterprise storage?

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Amid the growing interest in cloud computing, Coghead's collapse provides a reality check. SAP is providing a safety net for Coghead's intellectual property and its employees, but Coghead's customers are left to fend for themselves.

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Don't quite trust online storage providers with your company's files? A new service wants to lure the doubtful with a hybrid model that combines local and cloud-based storage. Startup Egnyte links your premises file server to an online service for belt-and-suspenders storage and backups.

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I despise having to carry paper. You also can add credit and ATM cards, driver's licenses, insurance cards -- all of this stuff we need to carry every day to that list, too. While we worry about hackers cracking retailers' Web sites and getting our credit card or financial information -- a lost wallet or purse can easily end up being a much bigger nightmare.

A startup from Bend, Ore., believes it may have a solution.

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ParaScale is about to release new software that lets customers create "storage clouds" using commodity Linux servers. The economics are such that the cost of a petabyte of storage, once the domain of only the largest organizations, is coming within reach of more companies.

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I arrived in Austin, Texas, today to go talk to IBM, again, about how it's helping make the planet smarter, this time focusing on how Web 2.0 technologies can help companies become more green. I am well prepared for Austin because I was just here in November (editor's note: It was October, Fritz), and I have a photogenic memory (editor's note: uh, photographic, and no).

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Semantic search is like porn: I'm pretty sure I'll know it when I see it. So when semantic search upstart Truevert came by for a visit, I got all googly (I think I might have even screamed "yahoo"). The Truevert system, powered by OrcaTec's discovery toolkit, is narrowly defined around green, but it's definitely an eye-opening, fresh approach to an elusive problem.

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I'm sure just about everything can happen in the cloud these days -- maybe even things I don't want to know about. But when we're starting to help companies perform API management in the cloud, which is what Mashery is doing, it's probably a pretty good sign.

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Private clouds that emulate the characteristics of public cloud services sound promising, but they won't necessarily be fast, easy, or cheap to create. A recent meeting with Cassatt CEO Bill Coleman reinforced that impression, especially when I heard about the price tag associated with them.

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What are the most innovative and compelling tech startups with products and services for business? InformationWeek is setting out to identify those up-and-coming companies, and we're asking your help in finding them.

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Sometimes it's the tiniest things that thrill me. In the middle of the gigantic TVs and the booming sound systems and the magic acts and the private suites and the thrumming parties was Ctera, an 18-employee company headquartered in Israel. When they showed me their device, I literally did a double-take (luckily off camera; very awkward). The CloudPlug is a tiny plug with a processor inside, an Ethernet jack, and a USB port, with which you can turn any USB device into a NAS and back up your data to Ctera's cloud-based service. And it's so damned cute.

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In the past few weeks, Engine Yard has brought in a new CEO, laid off 15% of its workforce, and merged two of its key development efforts. With that out of the way, the Ruby on Rails hosting company appears ready to announce a cloud platform and a new hosting option.

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I talked to two cloud startups today, but to my mind only one of them should get to use the term "cloud" in how it positions itself.

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The day has arrived when Average Joe can manage data center resources from a soccer field or the beach using the world's most popular gadget. Ylastic, an Atlanta-based startup founded last year, has introduced an iPhone version of its management interface for Amazon Web Services.

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If you like wide-screen TVs and computer monitors, check out Hiperwall's video wall technology. The startup has demonstrated its system running on 40 LCD monitors combined into a display that's 10-feet-high and 27-feet-across. Now, Samsung Electronics has agreed to distribute and support the super-sized, high-resolution displays.

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It’s been a big year for Click Forensics, a company that helps advertisers, agencies, and ad networks recognize and reduce low-quality Web traffic. In addition to naming a new CEO and securing second-round funding, the fraud-fighting startup struck a deal with Google.

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It's unclear exactly how cloud computing will fare during the recession, but RightScale CEO Michael Crandell has a rosy outlook. That prognostication appears deserved for now: the cloud management startup just raised an additional $13 million.

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The DotNetNuke team has a few things to celebrate. It recently closed on a round of financing, won a pair of awards in Packt Publishing's Open Source CMS Awards, and is getting ready for the release of DotNetNuke 5.0.

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Microsoft's SharePoint is the T. rex of collaboration products: big, fiercely competitive, and standing atop the social computing food chain. But smaller, nimbler players are using SaaS to compete against the thundering giant.

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Yieldex, a one-year-old company with a product for forecasting online ad inventory, is the winner of Amazon Web Services' startup challenge. The prize: $50,000 in cash, $50,000 in AWS credits, and a potential investment from Amazon.

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Forrester Research forecasts SaaS will take a modest bite out of the IT management market. The big surprise is the high level of interest from medium-sized and large enterprises.

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FastSoft, the two-year-old startup with an Internet accelerator appliance that employs souped-up TCP/IP, has two new customers. Limelight Networks is using the device to speed content uploads to its storage servers, and Getty Images has deployed it to hasten video distribution across long distances.

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G.ho.st, a startup that has developed a "virtual computer," is integrating Twitter with its browser-based user environment. More than a dozen applications are available from G.ho.st, a unique company where Israelis and Palestinians work together writing Web 2.0 software.

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Microsoft today introduces a new program that gives startups no-cost access to its software, technical support, and marketing machine for three years. The initiative, called Microsoft BizSpark, makes it much easier for entrepreneurs to build new businesses using Microsoft software and services. It comes at a time when cash-strapped startups may be looking for help.

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Anxiety is high in Silicon Valley over an anticipated decline in VC funding, but investment money hasn't dried up yet. In the past few days, a handful of startups have pulled in $70 million.

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The list of emerging companies with cloud services and infrastructure products keeps growing. Since we compiled InformationWeek's guide to 20 Cloud Computing Startups in September, eight more have drifted in.

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