The company's main business is in cloud management software, which it sells to service providers. The idea is to present to them everything one would need for building a cloud service.

And that business seems to be doing okay, with OnApp claiming to have 500 service-provider customers. The progress was enough to attract Series B funding, announced Wednesday, for an undisclosed amount that brings OnApp's total up to $20 million. The round is expected to take OnApp through profitability.

(The amount of the Series B wasn't disclosed, but it was larger than the Series A round, says Kosten Metreweli, OnApp's chief commercial officer.)

What caught Light Reading's eye last March, though, was the OnApp CDN, built from the idle capacity inside OnApp's customers' data centers. (See Hey, Guys, Let's Build a CDN!)

It's up and running and is the world's third-largest CDN, if you count points of presence (POPs); it doesn't rank nearly that high in terms of number of users. There's one customer that the company can name: CDN77.com, a content delivery network that exists entirely on OnApp's service, Metreweli says.

OnApp says it's now got the pieces in place to open the floodgates. "You have to get the infrastructure in place first before you can really ramp up usage. We're at that phase right now, of really starting to drive traffic across that CDN," Metreweli says.

XDN Inc. and SpotCloud have tried similar ideas, but OnApp had the advantage of having the infrastructure handy, Metreweli says. "What those companies did was create a marketplace, but it was like setting up a store on an empty street," he says. "XDN had a great concept without the ability to get that critical mass of supply that you need to be a CDN."

SpotCloud wound up in the hands of Virtustream in 2011 but didn't go much further. XDN was acquired weeks ago by Fortinet Inc., which plans to use the company's people and technology but probably won't continue the CDN service. (See Fortinet Acquires CDN Startup.)

Separately, OnApp is getting ready to launch a cloud storage service. It's been in beta since May and is on the verge of general availability, Metreweli says.

Using the OnApp CDN philosophy, OnApp Storage is built from the idle drive bays of OnApp's service-provider customers. The storage gets sliced up into virtual disks, and customers also have the option of specifying that certain data has to be physically closer to them, for lower latency.

The idea was not only to offer a cheaper alternative to a storage-area network, but also to create something better suited to scale to big cloud environments, where thousands of virtual machines are accessing different pieces of data at once.

Similar territory is being plumbed by Ceph, an open-source distributed storage system. Dreamhost is one of the companies making use of it.

— Craig Matsumoto, Managing Editor, Light Reading