Monday, February 18, 2008

Virtualization firm InstallFree preps to launch after $1.7M funding

By Christopher Calnan

A Connecticut entrepreneur plans to publicly launch next month a Stamford-based company developing desktop virtualization software for corporate IT departments.

Yorum Gabay is poised to release the first product of InstallFree Inc. in March after nearly 18 months of development. Last month, the company closed on a $1.7 million round of financing, primarily from U.S.-based angel investors.

InstallFree software is designed to enable applications to operate independently from the desktop computer's operating system, allowing users access to custom applications and settings regardless of physical desktop or hardware. It also allows numerous desktop computers to be managed centrally, which can make it easier to install new software -- improving privacy and security, Gabay said. The new business is a way to find and prevent problems in operating systems that his previous employer, Gteko Ltd., was often asked to resolve, he said.

InstallFree, founded in mid-2006, employs 14 workers -- 10 in Israel and four in the United States. Target markets include financial services, insurance and pharmaceutical industries, said Gabay.

InstallFree investors include angel investors, as well as a West Coast venture capital firm and an Israel-based venture capital firm, which he declined to identify.

Gabay's previous employer, Gteko, was acquired for a reported $110 million by Microsoft Corp. in 2006, the same year Microsoft bought Boston-based desktop virtualization company Softricity Inc. for an undisclosed amount.

Last year, New York research firm The 451 Group reported that desktop and application virtualization generated $1.5 billion in merger-and-acquisition activity during the previous 24 months. The firm projects increased activity this year as well.

Mark Bowker, an analyst for Milford-based Enterprise Strategy Group, said he expects adoption of desktop virtualization to initially occur in regulated industries such as health care and financial services.

The market is dominated by VMware Inc., a California-based spinoff of Hopkinton-based EMC Corp., and Florida-based Citrix Systems Inc., he said.

Local companies developing virtualization tech include Littleton-based Marathon Technologies Corp., which makes software that mirrors data-center servers to prevent data loss. In Lowell, Virtual Iron Software Inc. is competing with market leader VMware by undercutting VMware's price, as previously reported in Mass High Tech.