Tag Archives: Cloud

Salesforce reaches Net Zero energy usage, announces updates to Sustainability Cloud

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Salesforce has often preached about responsible capitalism, and today at Dreamforce, the company’s annual customer extravaganza, it announced a notable achievement in the battle against global climate change. The company said that it has achieved effective Net Zero energy usage across its entire value chain with 100% renewable energy, while purchasing carbon offsets when that’s not possible.

At the same time, it announced updates to the Sustainability Cloud, a product that the company sells to other organizations to manage their climate initiatives, proving you can be responsible, and still be capitalists. Suzanne DiBianca, chief impact officer & EVP for corporate relations at Salesforce, speaking at yesterday’s Dreamforce press event says the company is proud to be an example of a large organization taking positive climate action.

“I’m very excited about our commitment to climate action around being a Net Zero company today. And this is not in 2030, not in 2040, not in some other future moment. We know we have to accelerate, and we have gotten to Net Zero today including our entire value chain, which is Scope 1, 2 and 3. Very few companies have gotten here,” she said.

There is a lot of sustainability jargon there, so we spoke to Ari Alexander, GM of Sustainability Cloud to break it down for us. Alexander explained that the sustainability community measures a company’s carbon footprint in three main areas known as Scope 1, Scope 2 and Scope 3. “Scope 1 and 2 are what you own, what you operate, what you control and then what energy is procured in order to power your operation,” he said.

Scope 3 is everything else your company touches, which is referred to as ‘up and down the value chain’ in industry parlance. “The vast majority of the emissions that a company is responsible for are actually not in their direct operational control, but relate to their upstream suppliers that they procure goods and services from, or in the case of other industries the downstream use of the product or the life of a product,” he said. A downstream example might be what happens to your phone after you trade it in for a new one.

So when Salesforce says that it’s Net Zero up and down the value chain, it involves everything it controls and every company it interacts with in the act of doing business. Because there are so many variables here outside of Salesforce’s control, Alexander says when the company can’t ensure that a partner or vendor is in compliance with the standard set by the company, it buys what he calls “high quality carbon offsets.”

“Also for where we can’t do that immediately, we are purchasing high quality carbon offsets to make up the difference to be able to be fully Net Zero now, while we continue on that really important journey of reducing to absolute zero across the supply chain [over time],” he said.

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In addition, the company announced updates to the Sustainability Cloud, the commercial tool it has developed to sell to other companies, using the same tools and technology that Salesforce is using in-house.

“Sustainability is undergoing a transformation in that it’s going from something that’s a nice to have to something that’s actually at the heart of business transformation itself. That it’s one of the mega trends of our time and growing exponentially every year, and part of what that means is that companies are moving significant resources in order to respond to the climate crisis and moving sustainability to the core of how they do business,” Alexander said.

At the same time, the company published a blueprint based on its own plans to be a more sustainable organization called the Salesforce Climate Action Plan (link to pdf) that it is making available for free online.

The company also announced plans to accelerate its tree planting goals to grow 30 million trees this year. This involves working with other organizations to plant, grow and restore 100 million trees in a 10 year period, a goal that they have been pushing to make happen much sooner.

Company president and COO Bret Taylor speaking at the Dreamforce press event said that the climate crisis has had an impact on everyone, and he believes Salesforce can have a meaningful impact based on its behavior while acting as an example for other organizations.

“We’re showing up at Dreamforce, […] really to recognize that we think business is the greatest platform for change and to paint a picture of this vision for inspiring every organization to become a trusted enterprise and address these crises [like climate],” Taylor said.


By Ron Miller

Slack releases Clips video tool, announces 16 Salesforce integrations

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Slack has been talking about expanding beyond text-based messaging for some time. Today at Dreamforce, the Salesforce customer conference taking place this week, it announced Clips, a way to leave short video messages that people can watch at their leisure.

Slack CEO Stewart Butterfield sees Clips as a way to communicate with colleagues when a full 30 minutes meeting isn’t really required. Instead, you can let people know what’s going on through a brief video. “Clips are a way to record yourself on your screen. And the idea is that a lot of the meetings shouldn’t require us to be together in real time,” Butterfield said at a Dreamforce press event yesterday.

He added that these video clips provide more value because you can still get the point that would have been delivered in a full meeting without having to actually attend to get access to that information. What’s more, he says the videos create an audit trail of activity for archival purposes.

“It’s easily shareable with people who weren’t in attendance, but [still] get the update. It’s available in the archive, so you can go back and find the answers to questions you have or trace back the roots of a decision,” he said. It’s worth noting that Slack first introduced this idea last October, and announced an early customer beta last March, at which point they hadn’t even named it yet.

He admitted that this may require people to rethink how they work, and depending on the organization that may be harder in some places than others, but he believes that value proposition of freeing up employees to meet less and work more will eventually drive people and organizations to try it and then incorporate into the way that they work.

Why Slack and Salesforce execs think they’re better together

Clips builds on the Huddles tool released earlier this year, which is a way via audio to have serendipitous water cooler kinds of conversations, again as a way to reduce the need for a full-fledged meeting when people can get together for a few minutes, resolve an issue and get back to work. Butterfield says that Huddles has had the fastest adoption of any new capability since he first launched Slack.

In March, in a Clubhouse interview with SignalFire investor Josh Constine (who is also a former TechCrunch reporter), Butterfield said that the company was also working on a Clubhouse tool for business. The company did not announce any similar tool this week though.

The company also announced 16 integrations with Salesforce that span the entire Salesforce platform. These include the sales-focussed deal room and the customer support incident response called swarms announced earlier this month, as well as new connections to other tools in the Salesforce family of product including Mulesoft and Tableau and industry-specific integrations for banking, life sciences and philanthropy.

In case you had forgotten, Salesforce bought Slack at the end of last year in a mega deal worth almost $28 billion. Today, as part of the CRM giant, the company continues to build on the platform and product roadmap it had in place prior to the acquisition, while building in integrations all across the Salesforce platform.


By Ron Miller

Fivetran hauls in $565M on $5.6B valuation, acquires competitor HVR for $700M

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Fivetran, the data connectivity startup, had a big day today. For starters it announced a $565 million investment on $5.6 billion valuation, but it didn’t stop there. It also announced its second acquisition this year, snagging HVR, a data integration competitor that had raised over $50M, for $700 million in cash and stock.

The company last raised a $100 million Series C on a $1.2 billion valuation, increasing the valuation by over 5x. As with that Series C, Andreessen Horowitz was back leading the round with participation from other double dippers General Catalyst, CEAS Investments, Matrix Partners and other unnamed firms or individuals. New investors ICONIQ Capital, D1 Capital Partners and YC Continuity also came along for the ride. The company reports it has now raised $730 million.

The HVR acquisition represents a hefty investment for the startup, grabbing a company for a price that is almost equal to all the money it has raised to date, but it provides a way to expand its market quickly by buying a competitor. Earlier this year Fivetran acquired Teleport Data as it continues to add functionality and customers via acquisition.

“The acquisition — a cash and stock deal valued at $700 million — strengthens Fivetran’s market position as one of the data integration leaders for all industries and all customer types,” the company said in a statement.

Fivetran snares $100M Series C on $1.2B valuation for data connectivity solution

While that may smack of corporate marketing speak, there is some truth to it, as pulling data from multiple sources, sometimes in siloed legacy systems is a huge challenge for companies and both Fivetran and HVR have developed tools to provide the pipes to connect various data sources and put it to work across a business.

Data is central to a number of modern enterprise practices including customer experience management, which takes advantage of customer data to deliver customized experiences based on what you know about them, and data is the main fuel for machine learning models, which use it to understand and learn how a process works. Fivetran and HVR provide the nuts and bolts infrastructure to move the data around to where it’s needed, connecting to various applications like Salesforce, Box or Airtable, databases like Postgres SQL or data repositories like Snowflake or Databricks.

Whether bigger is better remains to be seen, but Fivetran is betting that it will be in this case as it makes its way along the startup journey. The transaction has been approved by both company’s boards. The deal is still subject to standard regulatory approval, but Fivetran is expecting it to close in October


By Ron Miller

Zoom looks beyond video conferencing as triple-digit 2020 growth begins to slow

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It’s been a heady 12-18 months for Zoom, the decade-old company that experienced monster 2020 growth and more recently, a mega acquisition with the $14.7 billion Five9 deal in July. That addition is part of a broader strategy the company has been undertaking the last couple of years to move beyond its core video conferencing market into adjacencies like phone, meeting management and messaging, among other things. Here’s a closer look at how the plan is unfolding.

As the pandemic took hold in March 2020, everyone from businesses to schools to doctors and and places of worship moved online. As they did, Zoom video conferencing became central to this cultural shift and the revenue began pouring in, ushering in a period of sustained triple-digit growth for the company that only recently abated.


By Ron Miller

Mirantis launches cloud-native data center-as-a-service software

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Mirantis has been around the block, starting way back as an OpenStack startup, but a few years ago the company began to embrace cloud-native development technologies like containers, microservices and Kubernetes. Today, it announced Mirantis Flow, a fully managed open source set of services designed to help companies manage a cloud-native data center environment, whether your infrastructure lives on-prem or in a public cloud.

“We’re about delivering to customers an open source-based cloud-to-cloud experience in the data center, on the edge, and interoperable with public clouds,” Adrian Ionel, CEO and co-founder at Mirantis explained.

He points out that the biggest companies in the world, the hyperscalers like Facebook, Netflix and Apple, have all figured out how to manage in a hybrid cloud-native world, but most companies lack the resources of these large organizations. Mirantis Flow is aimed at putting these same types of capabilities that the big companies have inside these more modest organizations.

While the large infrastructure cloud vendors like Amazon, Microsoft and Google have been designed to help with this very problem, Ionel says that these tend to be less open and more proprietary. That can lead to lock-in, which today’s large organizations are looking desperately to avoid.

“[The large infrastructure vendors] will lock you into their stack and their APIs. They’re not based on open source standards or technology, so you are locked in your single source, and most large enterprises today are pursuing a multi-cloud strategy. They want infrastructure flexibility,” he said. He added, “The idea here is to provide a completely open and flexible zero lock-in alternative to the [big infrastructure providers, but with the] same cloud experience and same pace of innovation.”

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They do this by putting together a stack of open source solutions in a single service. “We provide virtualization on top as part of the same fabric. We also provide software-defined networking, software-defined storage and CI/CD technology with DevOps as a service on top of it, which enables companies to automate the entire software development pipeline,” he said.

As the company describes the service in a blog post published today, it includes “Mirantis Container Cloud, Mirantis OpenStack and Mirantis Kubernetes Engine, all workloads are available for migration to cloud native infrastructure, whether they are traditional virtual machine workloads or containerized workloads.”

For companies worried about migrating their VMware virtual machines to this solution, Ionel says they have been able to move these VMs to the Mirantis solution in early customers. “This is a very, very simple conversion of the virtual machine from VMware standard to an open standard, and there is no reason why any application and any workload should not run on this infrastructure — and we’ve seen it over and over again in many many customers. So we don’t see any bottlenecks whatsoever for people to move right away,” he said.

It’s important to note that this solution does not include hardware. It’s about bringing your own hardware infrastructure, either physical or as a service, or using a Mirantis partner like Equinix. The service is available now for $15,000 per month or $180,000 annually, which includes: 1,000 core/vCPU licenses for access to all products in the Mirantis software suite plus support for 20 virtual machine (VM) migrations or application onboarding and unlimited 24×7 support. The company does not charge any additional fees for control plane and management software licenses.


By Ron Miller

Amagi tunes into $100M for cloud-based video content creation, monetization

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Media technology company Amagi announced Friday $100 million to further develop its cloud-based SaaS technology for broadcast and connected televisions.

Accel, Avataar Ventures and Norwest Venture Partners joined existing investor Premji Invest in the funding round, which included buying out stakes held by Emerald Media and Mayfield Fund. Nadathur Holdings continues as an existing investor. The latest round gives Amagi total funding raised to date of $150 million, Baskar Subramanian, co-founder and CEO of Amagi, told TechCrunch.

New Delhi-based Amagi provides cloud broadcast and targeted advertising software so that customers can create content that can be created and monetized to be distributed via broadcast TV and streaming TV platforms like The Roku Channel, Samsung TV Plus and Pluto TV. The company already supports more than 2,000 channels on its platform across over 40 countries.

“Video is a complex technology to manage — there are large files and a lot of computing,” Subramanian said. “What Amagi does is enable a content owner with zero technology knowledge to simplify that complex workflow and scalable infrastructure. We want to make it easy to plug in and start targeting and monetizing advertising.”

As a result, Amagi customers see operational cost savings on average of up to 40% compared to traditional delivery models and their ad impressions grow between five and 10 times.

Microsoft acquires video creation and editing software maker Clipchamp

The new funding comes at a time when the company is experiencing rapid growth. For example, Amagi grew 30 times in the United States alone over the past few years, Subramanian said. Amagi commands an audience of over 2 billion people, and the U.S. is its largest market. The company also sees growth potential in both Latin America and Europe.

In addition, in the last year, revenue grew 136%, while new customer year over year growth was 44%, including NBCUniversal — Subramanian said the Tokyo Olympics were run on Amagi’s platform for NBC, USA Today and ABS-CBN.

As more of a shift happens with video content being developed for connected television experiences, which he said is a $50 billion market, the company plans to use the new funding for sales expansion, R&D to invest in the company’s product pipeline and potential M&A opportunities. The company has not made any acquisitions yet, Subramanian added.

In addition to the broadcast operations in New Delhi, Amagi also has an innovation center in Bangalore and offices in New York, Los Angeles and London.

“Consumer behavior and infrastructure needs have reached a critical mass and new companies are bringing in the next generation of media, and we are a large part of that growth,” Subramanian said. “Sports will come on quicker, while live news and events are going to be one of the biggest growth areas.”

Shekhar Kirani, partner at Accel, said Amagi is taking a unique approach to enterprise SaaS due to that $50 billion industry shift happening in video content, where he sees half of the spend moving to connected television platforms quickly.

Some of the legacy players like Viacom and NBCUniversal created their own streaming platforms, where Netflix and Amazon have also been leading, but not many SaaS companies are enabling the transition, he said.

When Kirani met Subramanian five years ago, Amagi was already well funded, but Kirani was excited about the platform and wanted to help the company scale. He believes the company has a long tailwind because it is saving people time and enabling new content providers to move faster to get their content distributed.

“Amagi is creating a new category and will grow fast,” Kirani added. “They are already growing and doubling each year with phenomenal SaaS metrics because they are helping content providers to connect to any audience.

How Bongo, the ‘Netflix of Bangladesh,’ won the local video streaming market with just $10M

 


By Christine Hall

Box wins proxy board battle with activist investor Starboard Value

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A battle between Box and its majority shareholder Starboard Value over control of the board ended today when the company’s slate of directors easily defeated Starboard’s. It culminated months of maneuvering on both sides as they battled for control of the company.

Box, in a somewhat generic statement, expressed gratitude for the results:

Box appreciates the support and perspectives we have received from our stockholders throughout this process. The Board and management team will remain focused on continuing to transform Box and executing Box’s strategy to grow profitably and deliver significant value to all Box stockholders.

Starboard on the other hand, as you might expect, was unhappy with the outcome and didn’t hide that in a letter to shareholders released earlier today.

“We are certainly disappointed by the results of this election, which were heavily skewed by the voting rights tied to the preferred equity financing and the use of stockholder capital to aggressively repurchase shares ahead of the record date from stockholders likely to support change. At this juncture, the future of Box is in the Board’s hands, and there is a significant amount of work left to be done. Many commitments have been made, and we hope that Box will finally be able to follow through on its promises to drive improved results, accountability, governance, and compensation practices,” managing director Peter A. Feld wrote in the letter.

This all began when Starboard Value invested in Box, taking a 7.5% stake, which would eventually grow to 8.8% in the company. With that stake, it became the largest shareholder, but it remained relatively quiet until March of this year. That is when public rumblings began that Starboard was unhappy with the direction of the company, a conflict that could have ultimately resulted in the ouster of founder and CEO Aaron Levie or the sale of Box.

Starboard Value takes 7.5% stake in Box

The situation took an interesting turn when Box announced it was taking a $500 million investment from KKR, a move that Starboard took great exception to and made clear in a letter published at the beginning of May that it wanted significant changes to take place. As we wrote at the time:

While they couched the letter in mostly polite language, it’s quite clear Starboard is exasperated with Box. “While we appreciate the dialogue we have had with Box’s management team and Board of Directors (the “Board”) over the past two years, we have grown increasingly frustrated with continued poor results, questionable capital allocation decisions, and subpar shareholder returns,” Starboard wrote in its letter.

Less than a week later Starboard made a move for board seats and the battle was on for control. Box’s position was strengthened by two decent earnings reports prior to the vote; the company took the unusual move of delivering the results early in order to give the voters that information prior to the vote.

The company also made the unusual move of filing a document with the SEC that pushed back against Starboard’s slate of candidates. In the end, Box won the battle. Alan Pelz-Sharpe, founder and principal analyst at Deep Analysis, who has been watching the content management space where Box operates for years, sees this as a victory for Levie and Box.

“It was not a surprise to me that Box won the day. In my opinion, Starboard misread and underestimated the loyalty that Aaron Levie generates. The fact is that to most Box employees and investors, the company is a success story, and they also know that the customer base is pretty engaged and that there is plenty of room for future growth,” he said.

“For Box this vote of confidence will mean that they can (if they want) make some acquisitions and invest more in R&D moving forward, without constantly having an aggressive investor looking over their shoulder,” Pelz-Sharpe added.

It’s hard to know what happens next, but Starboard still maintains its shares for now, and it still has some clout in those numbers. Throughout its ownership tenure, Box has performed better, as the recent earnings results have shown, and the firm says that this remains the ultimate goal.

“As we have repeatedly stated, our only goal has been to help Box perform better and adopt best-in-class practices across operating performance, financial results, governance and compensation in order to create long-term value for the benefit of all stockholders. We will continue to monitor progress at Box, and we hope to see the company embrace the changes catalyzed by our involvement and create long-term value,” Starboard’s Feld wrote.

Box takes fight with activist investor public in SEC filing


By Ron Miller

New IBM Power E1080 server promises dramatic increases in energy efficiency, power

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We know that large data centers running powerful servers use vast amounts of electricity. Anything that can reduce consumption would be a welcome change, especially in a time of climate upheaval. That’s where the new IBM Power E1080 server, which is powered by the latest Power10 processors, comes into play.

IBM claims it can consolidate the work of 126 competitive servers down to just two E1080s, saving 80% in energy costs, by the company’s estimation. What’s more, the company says, “The new server has set a new world record in a SAP benchmark that measures performance for key SAP applications, needing only half the resources used by x86 competitive servers to beat them by 40%.”

Patrick Moorhead, founder and principal analyst at Moor Insight & Strategy, who closely follows the chip industry, says that the company’s bold claims about what these systems can achieve make sense from a hardware design perspective. “The company’s claims on SAP, Oracle and OpenShift workloads pass initial muster with me as it simply requires less sockets and physical processors to achieve the same performance. These figures were compared to Intel’s Cascade Lake that will be replaced with Sapphire Rapids (in the future),” he said.

IBM breaks latest revenue losing streak as cloud revenue shows modest growth

Steve Sibley, vice president and business line executive in the Power Systems Group at IBM, says that the new server (and the Power10 chip running it) have been designed for customers looking for a combination of speed, power, efficiency and security. “If you look at what we deliver here with scale and performance, it gives customers even more agility to respond quickly to scale to their highest demands,” he said.

To give customers options, they can buy E1080 servers outright and install them in a company data center. They can buy server access as a service from the IBM cloud (and possibly competitor clouds) or they can rent the servers and install them in their data centers and pay by the minute to help mitigate the cost.

“Our systems are a little bit more expensive on what I call a base cost of acquisition standpoint, but we allow customers to actually purchase [E1080 servers] on an as-a-service basis with a by-the-minute level of granularity of what they’re paying for,” he said.

What’s more, this server, which is the first to be released based on the Power10 chip, is designed to run Red Hat software under the hood, giving the company another outlet for its 2018 $34 billion acquisition.

“Bringing Red Hat’s platform to this platform is a key way to modernize applications, both from just a RHEL (Red Hat Enterprise Linux) operating system environment, as well as OpenShift (the company’s container platform). The other place that has been key with our Red Hat acquisition and our capitalizing on it is that we’re leveraging their Ansible projects and products to drive management and automation on our platform, as well,” Sibley explained.

Since Arvind Krishna took over as CEO at IBM in April 2020, he has been trying to shift the focus of the company to hybrid computing, where some computing exists in the cloud and some on prem, which is the state many companies will find themselves in for many years to come. IBM hopes to leverage Red Hat as a management plane for a hybrid environment, while offering a variety of hardware and software tools and services.

While Red Hat continues to operate as a standalone entity inside IBM, and wants to remain a neutral company for customers, Big Blue is still trying to find ways to take advantage of its offerings whenever possible and using it to run its own systems, and the E1080 provides a key avenue for doing that.

The company says that it is taking orders for the new servers starting immediately and expects to begin shipping systems at the end of the month.


By Ron Miller

Virtual meeting platform Vowel raises $13.5M, aims to cure meeting fatigue

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Meetings are an inevitable part of the work day, but as workplaces became more distributed over the past 18 months, Vowel CEO Andy Berman says we are steadily moving toward “death by meeting.”

His virtual meeting platform is the latest to receive venture capital funding — $13.5 million — with the goal of making meetings more useful before, during and after.

Vowel is launching a meeting operating system with tools like real-time transcription; integrated agendas, notes and action items; meeting analytics; and searchable, on-demand recordings of meetings. The company has a freemium business model and will also be rolling out a business plan this fall for $16 per user per month. Extra features will include advanced integrations, security and admin controls.

Otter.ai’s newest feature offers live, interactive transcripts of your Zoom meetings

The Series A was led by David Hornik of Lobby Capital, who was joined by existing investors Amity Ventures and Box Group and a group of individual investors, including Calendly CEO Tope Awotona, Intercom co-founder Des Traynor, Slack VP Ethan Eismann, former Yammer executive Viviana Faga, former InVision president David Fraga and Okta co-founder Frederic Kerrest.

Prior to starting Vowel, Berman was one of the founders of baby monitor company Nanit. The company had teams spread out around the world, and communication was tough as a result. In 2018, the company went looking for a tool that would work for synchronous and asynchronous meetings, but there were still a lot of time zones to manage, he said.

Taking a cue from Nanit’s own baby monitors that were streaming video over 17 hours a day, the idea for Vowel was born, and the company began to focus on the hypothesis that distributed work would be prevalent.

“People initially thought we were crazy, but then the pandemic hit, and everyone was learning how to work remotely,” Berman told TechCrunch. “As we now go back to hybrid work, we see this as an opportunity.”

In 2017, Harvard Business Review reported that executives spent 23 hours in meetings each week. Berman now estimates that the average worker spends half of their time each week in meetings.

Vowel is out to bring Slack, Figma and GitHub components to meetings by recording audio and video that can be paused at any time. Users can add notes and see where those notes fall within a real-time transcription that enables people who arrive late or could not make the meeting to catch up easily. After meetings are over, they can be shared, and Vowel has a search function so that users can go back and see where a particular person or topic was discussed.

The new funding will enable the company to grow its team in product, design and engineering. Vowel plans to hire up to 30 new people over the next year. The company recently closed its beta test and has amassed a 10,000-person waitlist. The public launch will happen in the fall, Berman said.

Workplace productivity and office communication tools are not new concepts, but as Berman explained, became increasingly important when homes became offices over the past 18 months.

Competitors took different approaches to solving these problems: focusing on video conferencing or audio or meeting management with plugins. Berman says an area where many have not succeeded yet is integrating meetings into the typical workflow. That’s where Vowel comes in with its “meeting OS,” he added.

3 views on the future of meetings

“Our goal is to make meetings more inclusive and worthwhile, which includes the prep, the meeting and the follow-up,” Berman said. “We see the future will be about knowledge management, so the difference between what we are doing is ensuring you can catch up quickly and keep that knowledge base. A Garner report said that 75% of workplace meetings will be recorded by 2025, and that is a trend we are reinventing from the ground up.”

David Hornick, founding partner at Lobby Capital, said he became acquainted with Vowel from its existing investor Amity Ventures. Hornick, who sits on the GitLab board, said GitLab was one of the largest distributed companies in the tech space, prior to the pandemic, and saw first-hand the challenge of making distributed teams functionable.

When Hornick heard about Vowell, he said he “jumped quickly” on the opportunity. His firm typically invests in platform businesses that have the capacity to transform business spaces. Many are pure software, like Splunk or GitLab, while others are akin to Bill.com, which transformed how small businesses manage financial operations, he added.

All of those combine into a company, like Vowel, especially given the company’s vision for a meeting OS to transform a meeting space that hadn’t moved forward in decades, he said.

“This was quickly obvious to me because my day is meetings — an eight-Zoom day is a normal day — I just wish I could remember everything,” Hornick said. “Speaking with early customers using the product, when I asked them what they would do if this ever went away, the first thing they said was ‘cry,’ and, because there was no alternative, would return to Zoom or other tools, but it would be a big setback.”


By Christine Hall

The time Animoto almost brought AWS to its knees

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Today, Amazon Web Services is a mainstay in the cloud infrastructure services market, a $60 billion juggernaut of a business. But in 2008, it was still new, working to keep its head above water and handle growing demand for its cloud servers. In fact, 15 years ago last week, the company launched Amazon EC2 in beta. From that point forward, AWS offered startups unlimited compute power, a primary selling point at the time.

EC2 was one of the first real attempts to sell elastic computing at scale — that is, server resources that would scale up as you needed them and go away when you didn’t. As Jeff Bezos said in an early sales presentation to startups back in 2008, “you want to be prepared for lightning to strike, […] because if you’re not that will really generate a big regret. If lightning strikes, and you weren’t ready for it, that’s kind of hard to live with. At the same time you don’t want to prepare your physical infrastructure, to kind of hubris levels either in case that lightning doesn’t strike. So, [AWS] kind of helps with that tough situation.”

An early test of that value proposition occurred when one of their startup customers, Animoto, scaled from 25,000 to 250,000 users in a 4-day period in 2008 shortly after launching the company’s Facebook app at South by Southwest.

At the time, Animoto was an app aimed at consumers that allowed users to upload photos and turn them into a video with a backing music track. While that product may sound tame today, it was state of the art back in those days, and it used up a fair amount of computing resources to build each video. It was an early representation of not only Web 2.0 user-generated content, but also the marriage of mobile computing with the cloud, something we take for granted today.

For Animoto, launched in 2006, choosing AWS was a risky proposition, but the company found trying to run its own infrastructure was even more of a gamble because of the dynamic nature of the demand for its service. To spin up its own servers would have involved huge capital expenditures. Animoto initially went that route before turning its attention to AWS because it was building prior to attracting initial funding, Brad Jefferson, co-founder and CEO at the company explained.

“We started building our own servers, thinking that we had to prove out the concept with something. And as we started to do that and got more traction from a proof-of-concept perspective and started to let certain people use the product, we took a step back, and were like, well it’s easy to prepare for failure, but what we need to prepare for success,” Jefferson told me.

Going with AWS may seem like an easy decision knowing what we know today, but in 2007 the company was really putting its fate in the hands of a mostly unproven concept.

“It’s pretty interesting just to see how far AWS has gone and EC2 has come, but back then it really was a gamble. I mean we were talking to an e-commerce company [about running our infrastructure]. And they’re trying to convince us that they’re going to have these servers and it’s going to be fully dynamic and so it was pretty [risky]. Now in hindsight, it seems obvious but it was a risk for a company like us to bet on them back then,” Jefferson told me.

Animoto had to not only trust that AWS could do what it claimed, but also had to spend six months rearchitecting its software to run on Amazon’s cloud. But as Jefferson crunched the numbers, the choice made sense. At the time, Animoto’s business model was for free for a 30 second video, $5 for a longer clip, or $30 for a year. As he tried to model the level of resources his company would need to make its model work, it got really difficult, so he and his co-founders decided to bet on AWS and hope it worked when and if a surge of usage arrived.

That test came the following year at South by Southwest when the company launched a Facebook app, which led to a surge in demand, in turn pushing the limits of AWS’s capabilities at the time. A couple of weeks after the startup launched its new app, interest exploded and Amazon was left scrambling to find the appropriate resources to keep Animoto up and running.

How Amazon EC2 grew from a notion into a foundational element of cloud computing

Dave Brown, who today is Amazon’s VP of EC2 and was an engineer on the team back in 2008, said that “every [Animoto] video would initiate, utilize and terminate a separate EC2 instance. For the prior month they had been using between 50 and 100 instances [per day]. On Tuesday their usage peaked at around 400, Wednesday it was 900, and then 3,400 instances as of Friday morning.” Animoto was able to keep up with the surge of demand, and AWS was able to provide the necessary resources to do so. Its usage eventually peaked at 5000 instances before it settled back down, proving in the process that elastic computing could actually work.

At that point though, Jefferson said his company wasn’t merely trusting EC2’s marketing. It was on the phone regularly with AWS executives making sure their service wouldn’t collapse under this increasing demand. “And the biggest thing was, can you get us more servers, we need more servers. To their credit, I don’t know how they did it — if they took away processing power from their own website or others — but they were able to get us where we needed to be. And then we were able to get through that spike and then sort of things naturally calmed down,” he said.

The story of keeping Animoto online became a main selling point for the company, and Amazon was actually the first company to invest in the startup besides friends and family. It raised a total of $30 million along the way, with its last funding coming in 2011. Today, the company is more of a B2B operation, helping marketing departments easily create videos.

While Jefferson didn’t discuss specifics concerning costs, he pointed out that the price of trying to maintain servers that would sit dormant much of the time was not a tenable approach for his company. Cloud computing turned out to be the perfect model and Jefferson says that his company is still an AWS customer to this day.

While the goal of cloud computing has always been to provide as much computing as you need on demand whenever you need it, this particular set of circumstances put that notion to the test in a big way.

Today the idea of having trouble generating 3,400 instances seems quaint, especially when you consider that Amazon processes 60 million instances every day now, but back then it was a huge challenge and helped show startups that the idea of elastic computing was more than theory.


By Ron Miller

Pixalate tunes into $18.1M for fraud prevention in television, mobile advertising

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Pixalate raised $18.1 million in growth capital for its fraud protection, privacy and compliance analytics platform that monitors connected television and mobile advertising.

Western Technology Investment and Javelin Venture Partners led the latest funding round, which brings Pixalate’s total funding to $22.7 million to date. This includes a $4.6 million Series A round raised back in 2014, Jalal Nasir, founder and CEO of Pixalate, told TechCrunch.

The company, with offices in Palo Alto and London, analyzes over 5 million apps across five app stores and more 2 billion IP addresses across 300 million connected television devices to detect and report fraudulent advertising activity for its customers. In fact, there are over 40 types of invalid traffic, Nasir said.

Nasir grew up going to livestock shows with his grandfather and learned how to spot defects in animals, and he has carried that kind of insight to Pixalate, which can detect the difference between real and fake users of content and if fraudulent ads are being stacked or hidden behind real advertising that zaps smartphone batteries or siphons internet usage and even ad revenue.

Navigating ad fraud and consumer privacy abuse in programmatic advertising

Digital advertising is big business. Nasir cited Association of National Advertisers research that estimated $200 billion will be spent globally in digital advertising this year. This is up from $10 billion a year prior to 2010. Meanwhile, estimated ad fraud will cost the industry $35 billion, he added.

“Advertisers are paying a premium to be in front of the right audience, based on consumption data,” Nasir said. “Unfortunately, that data may not be authorized by the user or it is being transmitted without their consent.”

While many of Pixalate’s competitors focus on first-party risks, the company is taking a third-party approach, mainly due to people spending so much time on their devices. Some of the insights the company has found include that 16% of Apple’s apps don’t have privacy policies in place, while that number is 22% in Google’s app store. More crime and more government regulations around privacy mean that advertisers are demanding more answers, he said.

The new funding will go toward adding more privacy and data features to its product, doubling the sales and customer teams and expanding its office in London, while also opening a new office in Singapore.

The company grew 1,200% in revenue since 2014 and is gathering over 2 terabytes of data per month. In addition to the five app stores Pixalate is already monitoring, Nasir intends to add some of the China-based stores like Tencent and Baidu.

Noah Doyle, managing director at Javelin Venture Partners, is also monitoring the digital advertising ecosystem and said with networks growing, every linkage point exposes a place in an app where bad actors can come in, which was inaccessible in the past, and advertisers need a way to protect that.

“Jalal and Amin (Bandeali) have insight from where the fraud could take place and created a unique way to solve this large problem,” Doyle added. “We were impressed by their insight and vision to create an analytical approach to capturing every data point in a series of transactions —  more data than other players in the industry — for comprehensive visibility to help advertisers and marketers maintain quality in their advertising.”

Audio out-of-home advertising is reinventing personalization

 


By Christine Hall

Databricks raises $1.6B at $38B valuation as it blasts past $600M ARR

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Databricks this morning confirmed earlier reports that it was raising new capital at a higher valuation. The data- and AI-focused company has secured a $1.6 billion round at a $38 billion valuation, it said. Bloomberg first reported last week that Databricks was pursuing new capital at that price.

The Series H was led by Counterpoint Global, a Morgan Stanley fund. Other new investors included Baillie Gifford, UC Investments and ClearBridge. A grip of prior investors also kicked in cash to the round.

The new funding brings Databricks’ total private funding raised to $3.5 billion. Notably, its latest raise comes just seven months after the late-stage startup raised $1 billion on a $28 billion valuation. Its new valuation represents paper value creation in excess of $1 billion per month.

The company, which makes open source and commercial products for processing structured and unstructured data in one location, views its market as a new technology category. Databricks calls the technology a data “lakehouse,” a mashup of data lake and data warehouse.

Databricks CEO and co-founder Ali Ghodsi believes that its new capital will help his company secure market leadership.

For context, since the 1980s, large companies have stored massive amounts of structured data in data warehouses. More recently, companies like Snowflake and Databricks have provided a similar solution for unstructured data called a data lake.

In Ghodsi’s view, combining structured and unstructured data in a single place with the ability for customers to execute data science and business-intelligence work without moving the underlying data is a critical change in the larger data market.

“[Data lakehouses are] a new category, and we think there’s going to be lots of vendors in this data category. So it’s a land grab. We want to quickly race to build it and complete the picture,” he said in an interview with TechCrunch.

9 investors discuss hurdles, opportunities and the impact of cloud vendors in enterprise data lakes

Ghodsi also pointed out that he is going up against well-capitalized competitors and that he wants the funds to compete hard with them.

“And you know, it’s not like we’re up against some tiny startups that are getting seed funding to build this. It’s all kinds of [large, established] vendors,” he said. That includes Snowflake, Amazon, Google and others who want to secure a piece of the new market category that Databricks sees emerging.

The company’s performance indicates that it’s onto something.

Growth

Databricks has reached the $600 million annual recurring revenue (ARR) milestone, it disclosed as part of its funding announcement. It closed 2020 at $425 million ARR, to better illustrate how quickly it is growing at scale.

Per the company, its new ARR figure represents 75% growth, measured on a year-over-year basis.

That’s quick for a company of its size; per the Bessemer Cloud Index, top-quartile public software companies are growing at around 44% year over year. Those companies are worth around 22x their forward revenues.

At its new valuation, Databricks is worth 63x its current ARR. So Databricks isn’t cheap, but at its current pace should be able to grow to a size that makes its most recent private valuation easily tenable when it does go public, provided that it doesn’t set a new, higher bar for its future performance by raising again before going public.

Ghodsi declined to share timing around a possible IPO, and it isn’t clear whether the company will pursue a traditional IPO or if it will continue to raise private funds so that it can direct list when it chooses to float. Regardless, Databricks is now sufficiently valuable that it can only exit to one of a handful of mega-cap technology giants or go public.

Why hasn’t the company gone public? Ghodsi is enjoying a rare position in the startup market: He has access to unlimited capital. Databricks had to open another $100 million in its latest round, which was originally set to close at just $1.5 billion. It doesn’t lack for investor interest, allowing its CEO to bring aboard the sort of shareholder he wants for his company’s post-IPO life — while enjoying limited dilution.

This also enables him to hire aggressively, possibly buy some smaller companies to fill in holes in Databricks’ product roadmap, and grow outside of the glare of Wall Street expectations from a position of capital advantage. It’s the startup equivalent of having one’s cake and eating it too.

Would the math work if Databricks were valued at $38B?

But staying private longer isn’t without risks. If the larger market for software companies was rapidly devalued, Databricks could find itself too expensive to go public at its final private valuation. However, given the long bull market that we’ve seen in recent years for software shares, and the confidence Ghodsi has in his potential market, that doesn’t seem likely.

There’s still much about Databricks’ financial position that we don’t yet know — its gross margin profile, for example. TechCrunch is also incredibly curious what all its fundraising and ensuing spending have done to near-term Databricks operating cash flow results, as well as how long its gross-margin adjusted CAC payback has evolved since the onset of COVID-19. If we ever get an S-1, we might find out.

For now, winsome private markets are giving Ghodsi and crew space to operate an effectively public company without the annoyances that come with actually being public. Want the same thing for your company? Easy: Just reach $600 million ARR while growing 75% year over year.


By Alex Wilhelm

Octane banks $2M for flexible billing software

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Software billing startup Octane announced Tuesday that it raised $2 million on a post-money valuation of $10 million to advance its pay-as-you-go billing software.

Akash Khanolkar and his co-founders met a decade ago at Carnegie Mellon University and since then went off in different directions. In Khanolkar’s case, he ran a cloud consulting business and saw how fast companies like Datadog and Snowflake were coming to market and dealing with Amazon Web Services.

He found that the commonality in all of those fast-growing companies was billing software using a pay-as-you-go business model versus the traditional flat-rate plans, Khanolkar told TechCrunch.

However, he explained that monitoring consumption means that billing becomes complicated: companies now have to track how customers are using the software per second in order to bill correctly each month.

Seeing the shift toward consumption-based billing, the co-founders came back together in June 2020 to create Octane, a metered billing system that helps vendors create a plan, monitor usage and charge in a similar way to Snowflake and AWS, Khanolkar said.

“We are API-driven, and you as a vendor will send us usage data, and on our end, we store it and then do real-time aggregations so at the end of the month, you can accordingly bill customers,” Khanolkar said. “We have seen contention between engineering and product. Engineers are there to create core plans, so we built a no-code experience for product teams to be able to create new price plans and then perform changes, like adding coupons.”

Within the global cloud billing market, which is expected to reach $6.5 billion by 2025, there are a set of Octane competitors, like Chargebee and Zuora, that Khanolkar said are tackling the subscription management side and succeeding in the past several years. Now there is a usage and consumption-based world coming and a whole new set of software businesses, like Octane, coming in to succeed there.

The new round of funding was led by Basis Set Ventures and included Dropbox co-founder Arash Ferdowsi, Github CTO Jason Warner, Fortress CTO Assunta Gaglione, Scale AI CRO Chetan Chaudhary, former Twilio executive Evan Cummack, Esteban Reyes, Abstraction Capital and Script Capital.

“With the rise of product-led growth and usage-based pricing models, usage-based billing is a critical and foundational piece of infrastructure that has been simply missing,” said Chang Xu, partner at Basis Set Ventures, via email. “At the same time, it’s something that every department cares about as it’s your revenue. Many later-stage companies we talk to that have built this in-house talk about the ongoing maintenance costs and wishes that there is a vendor they can outsource it to.”

We are super impressed with the Octane team with their dedication to building a best-in-class and robust usage-based billing solution. They’ve validated this opportunity by talking to lots of engineering teams so they can solve for all the edge cases, which is important in something as mission critical as billing. We are convinced that Octane will become an inevitable part of the tech infrastructure.”

Quolum announces $2.75M seed investment to track SaaS spending

The new funding will go primarily toward hiring engineers, as well as product, marketing and sales staff. Octane currently has seven employees, and Khanolkar expects to be around 10 by the end of the year.

The company is working with a large range of companies, primarily focused on infrastructure and the depth gauge industries. Octane is also seeing some unique use cases emerge, like a construction company using the usage meter to track the hours an employee works and companies in electric charging using the meter for those purposes.

“We didn’t envision construction guys using it, but in theory, it could be used by any company that tracks time — even legal,” Khanolkar added.

He declined to speak about the company’s revenue, but did say it now had two to three years of runway.

Up next, the company plans to roll out new features like price experimentation based on usage to help customers better make decisions on how to price their software, another problem Khanolkar sees happening. It will build ways that customers can try different plans against usage data to validate which one works the best.

“We are still in the early innings of consumption-based models, but we see more end users opting to go with an enterprise that wants to let them try out the software and then pay as they go,” he added.

Subscription-based pricing is dead: Smart SaaS companies are shifting to usage-based models


By Christine Hall

Linux 5.14 set to boost future enterprise application security

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Linux is set for a big release this Sunday August 29, setting the stage for enterprise and cloud applications for months to come. The 5.14 kernel update will include security and performance improvements.

A particular area of interest for both enterprise and cloud users is always security and to that end, Linux 5.14 will help with several new capabilities. Mike McGrath, vice president, Linux Engineering at Red Hat told TechCrunch that the kernel update includes a feature known as core scheduling, which is intended to help mitigate processor-level vulnerabilities like Spectre and Meltdown, which first surfaced in 2018. One of the ways that Linux users have had to mitigate those vulnerabilities is by disabling hyper-threading on CPUs and therefore taking a performance hit. 

“More specifically, the feature helps to split trusted and untrusted tasks so that they don’t share a core, limiting the overall threat surface while keeping cloud-scale performance relatively unchanged,” McGrath explained.

Another area of security innovation in Linux 5.14 is a feature that has been in development for over a year-and-a-half that will help to protect system memory in a better way than before. Attacks against Linux and other operating systems often target memory as a primary attack surface to exploit. With the new kernel, there is a capability known as memfd_secret () that will enable an application running on a Linux system to create a memory range that is inaccessible to anyone else, including the kernel.

“This means cryptographic keys, sensitive data and other secrets can be stored there to limit exposure to other users or system activities,” McGrath said.

At the heart of the open source Linux operating system that powers much of the cloud and enterprise application delivery is what is known as the Linux kernel. The kernel is the component that provides the core functionality for system operations. 

The Linux 5.14 kernel release has gone through seven release candidates over the last two months and benefits from the contributions of 1,650 different developers. Those that contribute to Linux kernel development include individual contributors, as well large vendors like Intel, AMD, IBM, Oracle and Samsung. One of the largest contributors to any given Linux kernel release is IBM’s Red Hat business unit. IBM acquired Red Hat for $34 billion in a deal that closed in 2019.

“As with pretty much every kernel release, we see some very innovative capabilities in 5.14,” McGrath said.

While Linux 5.14 will be out soon, it often takes time until it is adopted inside of enterprise releases. McGrath said that Linux 5.14 will first appear in Red Hat’s Fedora community Linux distribution and will be a part of the future Red Hat Enterprise Linux 9 release. Gerald Pfeifer, CTO for enterprise Linux vendor SUSE, told TechCrunch that his company’s openSUSE Tumbleweed community release will likely include the Linux 5.14 kernel within ‘days’ of the official release. On the enterprise side, he noted that SUSE Linux Enterprise 15 SP4, due next spring, is scheduled to come with Kernel 5.14. 

The new Linux update follows a major milestone for the open source operating system, as it was 30 years ago this past Wednesday that creator Linus Torvalds (pictured above) first publicly announced the effort. Over that time Linux has gone from being a hobbyist effort to powering the infrastructure of the internet.

McGrath commented that Linux is already the backbone for the modern cloud and Red Hat is also excited about how Linux will be the backbone for edge computing – not just within telecommunications, but broadly across all industries, from manufacturing and healthcare to entertainment and service providers, in the years to come.

The longevity and continued importance of Linux for the next 30 years is assured in Pfeifer’s view.  He noted that over the decades Linux and open source have opened up unprecedented potential for innovation, coupled with openness and independence.

“Will Linux, the kernel, still be the leader in 30 years? I don’t know. Will it be relevant? Absolutely,” he said. “Many of the approaches we have created and developed will still be pillars of technological progress 30 years from now. Of that I am certain.”

 

 


By Sean Michael Kerner

Microsoft is discontinuing its Office apps for Chromebook users in favor of web versions

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Since 2017, Microsoft has offered its Office suite to Chromebook users via the Google Play store, but that is set to come to an end in a few short weeks.

As of Sept. 18, Microsoft is discontinuing support for Office, which includes Word, Excel, PowerPoint, OneNote and Outlook, on Chromebook. Microsoft is not, however, abandoning the popular mobile device altogether. Instead of an app that is downloaded, Microsoft is encouraging users to go to the web instead.

“In an effort to provide the most optimized experience for Chromebook customers, Microsoft apps (Office and Outlook) will be transitioned to web experiences (Office.com and Outlook.com) on September 18, 2021,” Microsoft wrote in a statement emailed to TechCrunch. 

Microsoft’s statement also noted that “this transition brings Chromebook customers access to additional and premium features.” 

The Microsoft web experience will serve to transition its base of Chromebook users to the Microsoft 365 service, which provides more Office templates and generally more functionality than what the app-based approach provides. The web approach is also more optimized for larger screens than the app.

In terms of how Microsoft wants Chromebook users to get access to Office and Outlook, the plan is for customers to, “..sign in with their personal Microsoft Account or account associated with their Microsoft 365 subscription,” according to the statement. Microsoft has also provided online documentation to show users how to run Office on a Chromebook.

Chromebooks run on Google’s Chrome OS, which is a Linux-based operating system. Chromebooks also enable Android apps to run, as Android is also Linux based, with apps downloaded from Google Play. It’s important to note that while support for Chromebooks is going away, Microsoft is not abandoning other Android-based mobile devices, such as tablets and smartphones.

For those Chromebook users that have already downloaded the Microsoft Office apps, the apps will continue to function after September 18, though they will not receive any support or future updates.


By Sean Michael Kerner