If you’re looking for more evidence that “small really is beautiful”, look no further than Frank Artale’s Ignition Partners venture capital firm, which has just announced the closure of its fifth investment fund at a nicely rounded $150 million.

That amount is of course less than half the size of Ignition’s previous fund, which totaled some $400 million. In line with this scaling down, Ignition also said its opening up a smaller office in Palo Alto, Calif., which fits in with its plans to focus on investing in smaller, early-stage companies.

Yesterday, the Ignition Partners’ John Connors confirmed to the Seattle Times that the venture capital firm is trimming down its operations, while at the same time tightening its focus on the enterprise software, where it’s always seen its best successes:

“That’s where we’ve had a lot of success and it’s clearly where the market’s going,” said Connors, explaining the move.

Ignition’s move is a departure from its previous strategy, which saw it pursue several different industries besides enterprise. Previously, the firm has invested in such companies as the SEO optimization service SEOMoz, cloud management provider Opscode, and predictive text company Swype, which was recently acquired by Nuance.

However, its shift in focus to business technologies like cloud computing, Big Data and enterprise IT are an indication that Ignition, like many other investment firms, sees these areas as having huge potential for growth in the next ten years. We’ve seen further evidence of this trend at this week’s Venture Alpha East (#venturealpha), where SiliconANGLE founder John Furrier will touch on the subject in his own speech.

Ignition’s senior partner Frank Artale spoke about this opportunity in depth on theCUBE at last year’s VMWorld (see video segment below). Now, he’s putting his money where his mouth is, with the firm pointedly stating that its fifth investment fund will not be used to pursue investments in consumer technology and telecoms infrastructure firms, as it’s done in the past.

To help focus its new strategy, Ignition Partners has also taken on board a new partner, Nick Sturiale, who will run the firm’s new office in Palo Alto, Calif.

Speaking in a recent interview, Artale said that having dual offices was fundamental to the venture firm’s future plans for promoting collaboration and cross-pollination:

“We want to do real social networking here — not just Facebook stuff. Palo Alto and the Bay Area are super important as great entrepreneurial engines — Cisco, Oracle and other companies down there spit out great entrepreneurs.”

Ignition certainly doesn’t lack the credentials to pull that off. Its senior-most members have more no shortage of enterprise connections, what with Artale, Connors and Cameron Myhrvold all being former Microsoft employees. What with these connections, and the success of its previous investments like Splunk, Cloudera, Opscode, DocuSign, Zenprise, Parse and Bromium, there’ll be plenty of people watching and waiting to see where Ignition hedges its bets with this latest fund.