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CloudShare Has Big Eyes for 2012

(Reuters) – U.S.-Israeli start-up CloudShare, whose technology enables Web-based development and testing of software applications, expects to as much as triple sales in 2012 as its benefits from the rapidly growing cloud computing market.

“I think next year we will be two to three times larger than this year in terms of sales,” CEO Guri Stark told Reuters on Tuesday.

While he would not disclose sales and profit figures, Stark said he expects the company to be profitable soon.

Its top seven or eight customers — all large, well-known software firms — pay $400,000 to $800,000 a year to CloudShare. Clients include SAP, Adobe, HP, Dell and Cisco.

Earlier this month SAP announced the $3.4 billion purchase of Web-based software company SuccessFactors as it tries to catch up to rivals in cloud computing.

Stark said acquisitions in the cloud sector are happening almost weekly.

“It just shows how important the cloud has become,” he said. “The cloud is irreversible; the genie is out of the bottle.”

Stark said SAP’s acquisition reflects its desire to compete with larger rival Oracle and pioneer in the software as a service market, where business applications are hosted on the cloud, or Web.

Web-based software is popular because companies can vet the products before buying, pay by the month, and do not need to buy expensive hardware.

CloudShare does not compete in this market as it does not host applications.

“SAP has been a large and growing user for us and we expect this to accelerate,” Stark said.

Initially focusing on cloud-based sales enablement such as training, CloudShare has expanded to target development and testing of applications on the cloud, or what Stark calls preproduction.

“This is to differentiate from production, which is what most hosters such as Amazon do today. There you have an application ready and running in the cloud and customers use it instead of on premise,” he said.

“In preproduction, everything is changing all the time,” Stark said, noting major companies have focused on hosting and underestimated the size and importance of preproduction.

CloudShare said its technology makes it easy to create and change complex environments in the cloud.

Founded in 2007 by Israelis who served in an elite army intelligence unit, CloudShare moved its headquarters to California while maintaining development in Israel. Stark, who plays the harmonica, paints watercolors and lectures on art in his spare time, joined CloudShare 10 months ago.

The company raised $26 million from Sequoia Capital, Charles River Ventures, Gemini Israel Funds and Globespan Capital Partners. While it is not looking to go public or be acquired now, CloudShare is seeking partners to sell combined solutions.

“We have one on a large scale that we will announce in January with a U.S. software development company,” Stark said.

(Reporting by Tova Cohen, Editing by Mark Potter)