OwnBackup lands $50M as backup for Salesforce ecosystem thrives

OwnBackup has made a name for itself primarily as a backup and disaster recovery system for the Salesforce ecosystem, and today the company announced a $50 million investment.

Insight Partners led the round with participation from Salesforce Ventures and Vertex Ventures. This chunk of money comes on top of a $23 million round from a year ago, and brings the total raised to over $100 million, according to the company.

It shouldn’t come as a surprise that Salesforce Ventures chipped in when the majority of the company’s backup and recovery business involves the Salesforce ecosystem, although the company will be looking to expand beyond that with the new money.

“We’ve seen such growth over the last two and a half years around the Salesforce ecosystem. and the other ISV partners like Veeva and nCino that we’ve remained focused within the Salesforce space. But with this funding, we will expand over the next 12 months into a few new ecosystems,” company CEO Sam Gutmann told TechCrunch.

In spite of the pandemic, the company continues to grow, adding 250 new customers last quarter, bringing it to over 2000 customers and 250 employees, according to Gutmann.

He says that raising the round, which closed at the beginning of May had some hairy moments as the pandemic began to take hold across the world and worsen in the U.S. For a time, he began talking to new investors in case his existing ones got cold feet. As it turned out, when the quarterly numbers came in strong, the existing ones came back and the round was oversubscribed, Gutmann said.

“Q2 frankly was a record quarter for us, adding over 250 new accounts, and we’re seeing companies start to really understand how critical this is,” he said.

The company plans to continue hiring through the pandemic, although he says it might not be quite as aggressively as they once thought. Like many companies, even though they plan to hire, they are continually assessing the market. At this point, he foresees growing the workforce by about another 50 people this year, but that’s about as far as he can look ahead right now.

Gutmann says he is working with his management team to make sure he has a diverse workforce right up to the executive level, but he says it’s challenging. “I think our lower ranks are actually quite diverse, but as you get up into the leadership team, you can see on the website unfortunately we’re not there yet,” he said.

They are instructing their recruiting teams to look for diverse candidates whether by gender or ethnicity, and employees have formed a diversity and inclusion task force with internal training, particularly for managers around interviewing techniques.

He says going remote has been difficult, and he misses seeing his employees in the office. He hopes to have at least some come back, before the end of the summer and slowly add more as we get into the fall, but that will depend on how things go.


By Ron Miller

Apple device management company Jamf files S-1 as it prepares to go public

Jamf, the Apple device management company, filed to go public today. Jamf might not be a household name, but the Minnesota company has been around since 2002 helping companies manage their Apple equipment.

In the early days, that was Apple computers. Later it expanded to also manage iPhones and iPads. The company launched at a time when most IT pros had few choices for managing Macs in a business setting.

Jamf changed that, and as Macs and other Apple devices grew in popularity inside organizations in the 2010s, the company’s offerings grew in demand. Notably, over the years Apple has helped Jamf and its rivals considerably, by building more sophisticated tooling at the operating system level to help manage Macs and other Apple devices inside organizations.

Jamf raised approximately $50 million of disclosed funding before being acquired by Vista Equity Partners in 2017 for $733.8 million, according to the S-1 filing. Today, the company kicks off the high-profile portion of its journey towards going public.

Apple device management takes center stage

In a case of interesting timing, Jamf is filing to go public less than a week after Apple bought mobile device management startup Fleetsmith. At the time, Apple indicated that it would continue to partner with Jamf as before, but with its own growing set of internal tooling, which could at some point begin to compete more rigorously with the market leader.

Other companies in the space managing Apple devices besides Jamf and Fleetsmith include Addigy and Kandji. Other more general offerings in the mobile device management (MDM) space include MobileIron and VMware Airwatch among others.

Vista is a private equity shop with a specific thesis around buying out SaaS and other enterprise companies, growing them, and then exiting them onto the public markets or getting them acquired by strategic buyers. Examples include Ping Identity, which the firm bought in 2016 before taking it public last year, and Marketo, which Vista bought in 2016 for $1.8 billion and sold to Adobe last year for $4.8 billion, turning a tidy profit.

Inside the machine

Now that we know where Jamf sits in the market, let’s talk about it from a purely financial perspective.

Jamf is a modern software company, meaning that it sells its digital services on a recurring basis. In the first quarter of 2020, for example, about 83% of its revenue came from subscription software. The rest was generated by services and software licenses.

Now that we know what type of company Jamf is, let’s explore its growth, profitability and cash generation. Once we understand those facets of its results, we’ll be able to understand what it might be worth and if its IPO appears to be on solid footing.

We’ll start with growth. In 2018 Jamf recorded $146.6 million in revenue, which grew to $204.0 million in 2019. That works out to an annual growth rate of 39.2%, a more than reasonable pace of growth for a company going public. It’s not super quick, mind, but it’s not slow either. More recently, the company grew 36.9% from $44.1 million in Q1 2019 to $60.4 million in revenue in Q1 2020. That’s a bit slower, but not too much slower.

Turning to profitability, we need to start with the company’s gross margins. Then we’ll talk about its net margins. And, finally, adjusted profits.

Gross margins help us understand how valuable a company’s revenue is. The higher the gross margins, the better. SaaS companies like Jamf tend to have gross margins of 70% or above. In Jamf’s own case, it posted gross margins of 75.1% in Q1 2020, and 72.5% in 2019. Jamf’s gross margins sit comfortably in the realm of SaaS results, and perhaps even more importantly are improving over time.

Getting behind the curtain

When all its expenses are accounted for, the picture is less rosy, and Jamf is unprofitable. The company’s net losses for 2018 and 2019 were similar, totalling $36.3 million and $32.6 million, respectively. Jamf’s net loss improved a little in Q1, falling from $9.0 million in 2019 to $8.3 million this year.

The company remains weighed down by debt, however, which cost it nearly $5 million in Q1 2020, and $21.4 million for all of 2019. According to the S-1, Jamf is sporting a debt-to-equity ratio of roughly 0.8, which may be a bit higher than your average public SaaS company, and is almost certainly a function of the company’s buyout by a private equity firm.

But the company’s adjusted profit metrics strip out debt costs, and under the heavily massaged adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) metric, Jamf’s history is only one of rising profitability. From $6.6 million in 2018 to $20.8 million in 2019, and from $4.3 million in Q1 2019 to $5.6 million in Q1 2020. with close to 10% adjusted operating profit margins through YE 2019.

It will be interesting to see how the company’s margins will be affected by COVID, with financials during the period still left blank in this initial version of the S-1. The Enterprise market in general has been reasonably resilient to the recent economic shock, and device management may actually perform above expectations given the growing push for remote work.

Completing the picture

Something notable about Jamf is that it has positive cash generation, even if in Q1 it tends to consume cash that is made up for in other quarters. In 2019, the firm posted $11.2 million in operational cash flow. That’s a good result, and better than 2018’s $9.4 million of operating cash generation. (The company’s investing cash flows have often run negative due to Jamf acquiring other companies, like ZuluDesk and Digita.)

With Jamf, we have a SaaS company that is growing reasonably well, has solid, improving margins, non-terrifying losses, growing adjusted profits, and what looks like a reasonable cash flow perspective. But Jamf is cash poor, with just $22.7 million in cash and equivalents as of the end of Q1 2020 — some months ago now. At that time, the firm also had debts of $201.6 million.

Given the company’s worth, that debt figure is not terrifying. But the company’s thin cash balance makes it a good IPO candidate; going public will raise a chunk of change for the company, giving it more operating latitude and also possibly a chance to lower its debt load. Indeed Jamf notes that it intends to use part of its IPO raise to “to repay outstanding borrowings under our term loan facility…” Paying back debt at IPO is common in private equity buyouts.

So what?

Jamf’s march to the public markets adds its name to a growing list of companies. The market is already preparing to ingest Lemonade and Accolade this week, and there are rumors of more SaaS companies in the wings, just waiting to go public.

There’s a reasonable chance that as COVID-19 continues to run roughshod over the United States, the public markets eventually lose some momentum. But that isn’t stopping companies like Jamf from rolling the dice and taking a chance going public.


By Ron Miller

Slack announces Connect, an improved way for companies to talk to one another

Virtual events are the new norm for product rollouts in 2020, with Slack taking to the internet earlier today to talk about a new part of its service called Slack Connect.

On the heels of Apple’s lengthy and pretty good virtual WWDC that took place earlier this week, Slack’s event, part experiment and part press conference, was called to detail the firm’s new Slack Connect capability, which will allow companies to better link together and communicate inside of their Slack instance than what was possible with its shared channels feature. The product was described inside of a business-to-business context, including examples about companies needing to chat with agencies and other external vendors.

In its most basic form, Slack is well-known for internal chat functionality, helping teams talk amongst themselves. Slack Connect appears to be a progression past that idea, pushing internal communications tooling to allow companies to plug their private comms into the private comms of other orgs, linking them for simple communication while keeping the entire affair secure.

Slack Connect, a evolution past what shared channels offered, includes better security tooling and the ability to share channels across 20 orgs. The enterprise SaaS company is also working to give Connect-using companies “the ability to form DM connections independent of channels,” the company told TechCrunch.

The product could slim down email usage; if Slack Connect can let many orgs chat amongst themselves, perhaps fewer emails will be needed to keep different companies in sync. That said, Slack is hardly a quiet product. During his part of the presentation, Slack CEO Stewart Butterfield noted that the service sees up to 65 million messages sent each second at peak times.

According to the CEO, Slack Connect has been piloted for a few months, and is now available for paid plans.

Slack shares are off 3.8% today, before the news came out. Its broader company cohort (SaaS) are also down today, along with the market more broadly; investors don’t appear to have reacted to this piece of news, at least yet.


By Alex Wilhelm

Intercom announces the promotion of Karen Peacock to CEO

Three years ago almost to the day, Intercom announced that it was bringing former Intuit exec Karen Peacock on board as COO. Today, she got promoted to CEO, effective July 1st. Current CEO and company co-founder Eoghan McCabe will become Chairman.

As it turns out, these moves aren’t a coincidence. McCabe had been actively thinking about a succession plan when he hired Peacock. “When I first started talking to Eoghan three years ago, he shared with me that his vision was to hire someone as COO, who could then become the CEO at the right time and he could transition into the chairman role,” Peacock told TechCrunch.

She said while the idea was always there, they didn’t feel the need to rush the process. “We were just looking for whatever the right time was, and it wasn’t something we were expected to do in the first year or two. And now is really the right time to transition with all of the momentum that we’re seeing in the market,” she said.

She said as McCabe makes the transition away from running the company he helped found, he will still be around, and they will continue working together on things like product and marketing strategy, but Peacock brings a pedigree of her own to the new role.

Not only has she been in charge of commercial aspects of the Intercom business for the past three years, prior to that she was SVP at Intuit where she ran small business products that included QuickBooks, and grew it from a $500 million business to a hefty $2.5 billion during her tenure.

McCabe says that experience was one of the reasons he spent six months trying to convince Peacock to become COO at Intercom in 2017. “It’s really hard to find a leader that’s as well rounded, and as unique as Karen is. You know she doesn’t actually fit your typical very experienced operator,” he said. He points to her deep product background, calling her a “product nerd,” and her undergraduate degree in applied mathematics from Harvard as examples.

In spite of the pandemic, she’s taking over a company that’s still managing to grow. The company’s business messenger products, which enable companies to chat with customers online have become increasingly important during the pandemic with many brick and mortar businesses shut down and the majority of business is being conducted digitally.

“Our overall revenue is $150 million in annual recurring revenue, and a supporting data point to what we were just talking about is that our new business to up market customers through our sales teams has doubled year over year. So we’re really seeing some quite nice acceleration there,” she said.

Peacock says she wants to continue building the company and using her role to build a diverse and inclusive culture. “I believe that [diversity and inclusion] is not one person’s job, it’s all of our jobs, but we have one person who’s the center post of that (a head of D&I). And then we work with outside consulting firms as well to just try and stay in a place where we understand all of what’s possible and what we can do in the world.”

She adds, “I will say that we need to make more progress on diversity and inclusion, I wouldn’t step back and, and pat ourselves on the back and say we’ve done this perfectly. There’s a lot more that we need to do, and it’s one of the things that I’m very excited to tackle as CEO.”

According to a February Wall Street Journal article, less than 6% of women hold CEO jobs in the U.S. Peacock certainly sees this and wants to continue to mentor women as she takes over at Intercom. “It is something that I’m very passionate about. I do speak to various different groups of up and coming women leaders, and I mentor a group of women outside of Intercom,” she said. She also sits on the board at Dropbox with other women leaders like Condoleezza Rice and Meg Whitman.

Peacock says that taking over during a pandemic makes it interesting, and instead of visiting the company’s offices, she’ll be doing a lot of video conferences. But neither is she coming in cold to the company having to ramp up on the business side of things, while getting to know everyone.

“I feel very fortunate to have been with Intercom for three years, and so I know all the people and they all know me. And so I think it’s a lot easier to do that virtually than if you’re meeting people for the very first time. Similarly, I also know the business very well, and so it’s not like I’m trying to both ramp up on the business and deal with a pandemic,” she said.


By Ron Miller

‘One day we were in the office and the next we were working from home’

Ryan Easter couldn’t believe he was being asked to run a pandemic business continuity test.

It was late October, 2019 and Easter, IT Director and a principal at Johnson Investment Counsel, was being asked by regulators to ensure that their employees could work from home with the same capabilities they had in the office. In addition, the company needed to evaluate situations where up to 50% of personnel were impacted by a virus and unable to work, forcing others to pick up their internal functions and workload.

“I honestly thought that it was going to be a waste of time,” said Easter. “I never imagined that we would have had to put our pandemic plan into action. But because we had a tested strategy already in place, we didn’t miss a beat when COVID-19 struck.”

In the months leading up to the initial test, Johnson Investment Counsel developed a work anywhere blueprint with their technology partner Evolve IP. The plan covered a wide variety of integrated technologies including voice services, collaboration, virtual desktops, disaster recovery and remote office connectivity.

“Having a strategy where our work anywhere services were integrated together was one of the keys to our success,” said Easter. “We manage about $13 billion in assets for clients across the United States and provide comprehensive wealth and investment management to individual and institutional investors. We have our own line of mutual funds, a state-chartered trust company, a proprietary charitable gift fund, with research analysts and traders covering both equity and fixed income markets. Duct taping one-off solutions wasn’t going to cut it.”

Easter continued, “It was imperative that our advisors could communicate with clients, collaborate with each other and operate the business seamlessly. That included ensuring we could make real-time trades and provide all of our other client services.”

Five months later, the novel coronavirus hit the United States and Johnson Investment Counsel’s blueprint test got real.


By Walter Thompson

New Box tools should help ease creation of digitally driven workflows

As COVID-19 has forced companies to move employees from office to home, cloud services have seen a burst in business. Box has been speeding up its product roadmap to help companies who are in the midst of this transition. Today, the company announced the Box Relay template library, which includes a series of workflow templates to help customers build digital workflows faster.

Box CEO Aaron Levie says that the rapid shift to work from home has been a massive accelerant to digital transformation, in some cases driving years of digital transformation into a matter of weeks and months. He says that has made the need to digitize business processes more urgent than ever.

In fact, when he appeared on Extra Crunch Live last month, he indicated that businesses still have way too many manual processes:

We think we’re [in] an environment that anything that can be digitized probably will be. Certainly as this pandemic has reinforced, we have way too many manual processes in businesses. We have way too slow ways of working together and collaborating. And we know that we’re going to move more and more of that to digital platforms.

Box Relay is the company’s workflow tool, and while it has had the ability to create workflows, it required a certain level of knowledge and way of thinking to make that happen. Levie says that they wanted to make it as simple as possible for customers to build workflows to digitize manual processes.

“We are announcing an all new set of Box Relay templates, which are going straight to the heart of how do you automate and digitize business processes across the entire enterprise and make it really simple to do that,” he explained.

This could include things like a contract review, change order process or budget review to name a few examples. The template includes the pieces to get going, but the customer can customize the process to meet the needs of the individual organization’s requirements.

Image Credits: Box

While this is confined to Box-built templates for now, Levie says that down the road this could include the ability for customers to deploy templates of their own, or even for third parties like systems integrators to build industry or client-specific templates. But for today, it’s just about the ones you get out of the box from Box.

At the same time, the company is announcing the File Request feature, a name Levie admits doesn’t really do the feature justice. The idea is that in a workflow such as a paperless bank loan process, the individual has to submit multiple documents without having a Box account. After the company receives the documents, it can kick off a workflow automatically based on receiving the set of documents.

He says the combination of these two new capabilities will give customers the ability to digitize more and more of their processes and bring in a level of automation that wasn’t previously possible in Relay. “The combination of these two features is about driving automation across the entire enterprise and digitizing many more paper-based and manual processes in the enterprise,” Levie said.

Box will not be charging additional fees for these new features to customers using Box Relay. File Request should be available at the end of this month, while the template library should be available by the end of July, according to the company.


By Ron Miller

Gauging growth in the most challenging environment in decades

Traditionally, measuring business success requires a greater understanding of your company’s go-to-market lifecycle, how customers engage with your product and the macro-dynamics of your market. But in the most challenging environment in decades, those metrics are out the window.

Enterprise application and SaaS companies are changing their approach to measuring performance and preparing to grow when the economy begins to recover. While there are no blanket rules or guidance that applies to every business, company leaders need to focus on a few critical metrics to understand their performance and maximize their opportunities. This includes understanding their burn rate, the overall real market opportunity, how much cash they have on hand and their access to capital. Analyzing the health of the company through these lenses will help leaders make the right decisions on how to move forward.

Play the game with the hand you were dealt. Earlier this year, our company closed a $40 million Series C round of funding, which left us in a strong cash position as we entered the market slowdown in March. Nonetheless, as the impact of COVID-19 became apparent, one of our board members suggested that we quickly develop a business plan that assumed we were running out of money. This would enable us to get on top of the tough decisions we might need to make on our resource allocation and the size of our staff.

While I understood the logic of his exercise, it is important that companies develop and execute against plans that reflect their actual situation. The reality is, we did raise the money, so we revised our plan to balance ultra-conservative forecasting (and as a trained accountant, this is no stretch for me!) with new ideas for how to best utilize our resources based on the market situation.

Burn rate matters, but not at the expense of your culture and your talent. For most companies, talent is both their most important resource and their largest expense. Therefore, it’s usually the first area that goes under the knife in order to reduce the monthly spend and optimize efficiency. Fortunately, heading into the pandemic, we had not yet ramped up hiring to support our rapid growth, so were spared from having to make enormously difficult decisions. We knew, however, that we would not hit our 2020 forecast, which required us to make new projections and reevaluate how we were deploying our talent.


By Walter Thompson

Quolum announces $2.75M seed investment to track SaaS spending

As companies struggle to find ways to control costs in today’s economy, understanding what you are spending on SaaS tools is paramount. That’s precisely what early stage startup Quolum is attempting to do, and today it announced a $2.75 million seed round.

Surge Ventures and Nexus Venture Partners led the round with help from a dozen unnamed angel investors.

Company founder Indus Khatian says that he launched the company last summer pre-COVID, when he recognized that companies were spending tons of money on SaaS subscriptions and he wanted to build a product to give greater visibility into that spending.

This tool is aimed at finance, who might not know about the utility of a specific SaaS tool like PagerDuty, but who looks at the bills every month. The idea is to give them data about usage as well as cost to make sure they aren’t paying for something they aren’t using.

“Our goal is to give finance a better set of tools, not just to put a dollar amount on [the subscription costs], but also the utilization, as in who’s using it, how much are they using it and is it effective? Do I need to know more about it? Those are the questions that we are helping finance answer,” Khatian explained.

Eventually, he says he also wants to give that data directly to lines of business, but for starters he is focusing on finance. The product works by connecting to the billing or expense software to give insight into the costs of the services. It takes that data and combines it with usage data in a dashboard to give a single view of the SaaS spending in one place.

While Khatian acknowledges there are other similar tools in the marketplace such as Blissfully, Intello and others, he believes the problem is big enough for multiple vendors to do well. “Our differentiator is being end-to-end. We are not just looking at the dollars, or stopping at how many times you’ve logged in, but we’re going deep into consumption. So for every dollar that you’ve spent, how many units of that software you have consumed,” he said.

He says that he raised the money last fall and admits that it probably would have been tougher today, and he would have likely raised on a lower valuation.

Today the company consists of a 6 person development team in Bangalore in India and Khatian in the U.S. After the company generates some revenue he will be hiring a few people to help with marketing, sales and engineering.

When it comes to building a diverse company, he points out that he himself is an immigrant founder, and he sees the ability to work from anywhere, an idea amplified by COVID-19, helping result in a more diverse workforce. As he builds his company, and adds employees,  he can hire people across the world, regardless of location.


By Ron Miller

Flatfile scores $7.6M seed investment to simplify data onboarding

One of the huge challenges companies like enterprise SaaS vendors face with new customers is getting customer data into their service. It’s a problem that Flatfile founders faced first hand in their jobs, and they decided to solve it. Today, the company announced a healthy $7.6 million seed investment to expand on that vision.

The company also announced the release of its latest product called Concierge.

Two Sigma Ventures led the investment with participation from previous investors Afore Capital, Designer Fund and Gradient Ventures (Google’s AI- focused venture fund).

Company CEO David Boskovic says he and co-founder Eric Crane recognized that this is a problem just about every company faces. Let’s say you sign up for a CRM tool like Hubspot (which is a Flatfile customer). Your first step is to get your customer data into the new service.

As Boskovic points out, if you have thousands of existing customers that can be a real problem, often involving days or even weeks to prepare the data, depending on the size of your customer base. It typically includes importing your data from an existing source, then manually moving it to an Excel spreadsheet.

“What we’re trying to solve for at Flatfile is automating that entire process. You can drop in any data that you have and get it into a new product, and what that solves from a market perspective is the speed of adopting new software,” Boskovic told TechCrunch.

Image Credit: Flatfile

He says they have automated the process to the point it usually takes just a few minutes to process the data, If there are problems that Flatfile can’t solve, it presents the issue to the user who can fix it and move on.

The founders realized that not every use case is going to involve a simple one-to-one data transfer, so they created their new product called Concierge to help companies manage more complex data integration scenarios for their customers

“What we do is we provide a bridge between disparate data formats that are a little bit more complex and let our customers collaborate with their new customers that they are onboarding to bring the data to the right state to use it in the new system,” Boscovic explained.

Whatever they are doing it seems to be working. The company launched in 2016 and today it has 160 customers with 300 sitting on a waiting list. It has increased that customer count by 5x since the beginning of the year in the middle of a pandemic.

Any product that reduces labor and increases efficiency and collaboration in a digital context is going to get the attention of customers right now, and Flatfile is seeing huge spike in interest in spite of the current economy. “We’re helping onboard customers quickly and more efficiently. And our Concierge service can also help reduce in-person touch points by reducing this long, typical data onboarding process,” Boscovic said.

The company has not had to change the way it’s worked because of the pandemic as it has been a distributed workforce from day one. In fact, Boscovic is in Denver and co-founder Eric Crane is based in Atlanta. The startup currently has 14 employees, but plans to fill at least 10 roles this year.

“We’ve got a pretty aggressive hiring map. Our pipeline is bigger than we can handle from a sales perspective,” he said. That means they will be looking to fill sales, marketing and product jobs.


By Ron Miller

Slack’s new integration deal with AWS could also be about tweaking Microsoft

Slack and Amazon announced a big integration late yesterday afternoon. As part of the deal, Slack will use Amazon Chime for its call feature, while reiterating its commitment to use AWS as its preferred cloud provider to run its infrastructure. At the same time, AWS has agreed to use Slack for internal communications.

Make no mistake, this is a big deal as the SaaS communications tool increases its ties with AWS, but this agreement could also be about slighting Microsoft and its rival Teams product by making a deal with a cloud rival. In the past Slack CEO Stewart Butterfield has had choice words for Microsoft saying the Redmond technology giant sees his company as an “existential threat.”

Whether that’s true or not — Teams is but one piece of a huge technology company — it’s impossible not to look at the deal in this context. Aligning more deeply with AWS sends a message to Microsoft, whose Azure infrastructure services compete with AWS.

Butterfield didn’t say that of course. He talked about how synergistic the deal was. “Strategically partnering with AWS allows both companies to scale to meet demand and deliver enterprise-grade offerings to our customers. By integrating AWS services with Slack’s channel-based messaging platform, we’re helping teams easily and seamlessly manage their cloud infrastructure projects and launch cloud-based services without ever leaving Slack,” he said in a statement

The deal also includes several other elements including integrating AWS Key Management Service with Slack Enterprise Key Management (EKM) for encryption key management, deeper alignment with AWS’s chatbot service and direct integration with AWS AppFlow to enable secure transfer of data between Slack and Amazon S3 storage and the Amazon Redshift data warehouse.

AWS CEO Andy Jassy saw it as a pure integration play. “Together, AWS and Slack are giving developer teams the ability to collaborate and innovate faster on the front end with applications, while giving them the ability to efficiently manage their backend cloud infrastructure,” Jassy said in a statement.

Like any good deal, it’s good for both sides. Slack gets a big customer in AWS and AWS now has Slack directly integrating more of its services. One of the reasons enterprise users are so enamored with Slack is the ability to get work done in a single place without constantly have to change focus and move between interfaces.

This deal will provide more of that for common customers, while tweaking a common rival. That’s what you call win-win.


By Ron Miller

SaaS earnings rise as pandemic pushes companies more rapidly to the cloud

As the pandemic surged and companies moved from offices to working at home, they needed tools to ensure the continuity of their business operations. SaaS companies have always been focused on allowing work from anywhere there’s access to a computer and internet connection, and while the economy is reeling from COVID-19 fallout, modern software companies are thriving.

That’s because the pandemic has forced companies that might have been thinking about moving to the cloud to find tools what will get them there much faster. SaaS companies like Zoom, Box, Slack, Okta and Salesforce were there to help; cloud security companies like CrowdStrike also benefited.

While it’s too soon to say how the pandemic will affect work long term when it’s safe for all employees to return to the office, it seems that companies have learned that you can work from anywhere and still get work done, something that could change how we think about working in the future.

One thing is clear: SaaS companies that have reported recent earnings have done well, with Zoom being the most successful example. Revenue was up an eye-popping 169% year-over-year as the world shifted in a big way to online meetings, swelling its balance sheet.

There is a clear connection between the domestic economy’s rapid transition to the cloud and the earnings reports we are seeing — from infrastructure to software and services. The pandemic is forcing a big change to happen faster than we ever imagined.

Big numbers

Zoom and CrowdStrike are two companies expected to grow rapidly thanks to the recent acceleration of the digital transformation of work. Their earnings reports this week made those expectations concrete, with both firms beating expectations while posting impressive revenue growth and profitability results.


By Ron Miller

NetApp to acquire Spot (formerly Spotinst) to gain cloud infrastructure management tools

When Spotinst rebranded to Spot in March, it seemed big changes were afoot for the startup, which originally helped companies find and manage cheap infrastructure known as spot instances (hence its original name). We had no idea how big at the time. Today, NetApp announced plans to acquire the startup.

The companies did not share the price, but Israeli publication, CTECH, pegged the deal at $450 million. NetApp would not confirm that price.

It may seem like a strange pairing, a storage company and a startup that helps companies find bargain infrastructure and monitor cloud costs, but NetApp sees the acquisition as a way for its customers to bridge storage and infrastructure requirements.

“The combination of NetApp’s leading shared storage platform for block, file and object and Spot’s compute platform will deliver a leading solution for the continuous optimization of cost for all workloads, both cloud native and legacy,” Anthony Lye, senior vice president and general manager for public cloud services at NetApp said in a statement.

Spot helps companies do a couple of things. First of all it manages spot and reserved instances for customers in the cloud. Spot instances in particular, are extremely cheap because they represent unused capacity at the cloud provider. The catch is that the vendor can take the resources back when they need them, and Spot helps safely move workloads around these requirements.

Reserved instances are cloud infrastructure you buy in advance for a discounted price. The cloud vendor gives a break on pricing, knowing that it can count on the customer to use a certain amount of infrastructure resources.

At the time it rebranded, the company also had gotten into monitoring cloud spending and usage across clouds. Amiram Shachar, co-founder and CEO at Spot told TechCrunch in March, “With this new product we’re providing a more holistic platform that lets customers see all of their cloud spending in one place — all of their usage, all of their costs, what they are spending and doing across multiple clouds — and then what they can actually do [to deploy resources more efficiently],” he said at the time.

Shachar writing in a blog post today announcing the deal indicated the company will continue to support its products as part of the NetApp family, and as startup CEOs typically say at a time like this, move much faster as part of a large organization.

“Spot will continue to offer and fully support our products, both now and as part of NetApp when the transaction closes. In fact, joining forces with NetApp will bring additional resources to Spot that you’ll see in our ability to deliver our roadmap and new innovation even faster and more broadly,” he wrote in the post.

NetApp has been quite acquisitive this year. It acquired Talon Storage in early March and CloudJumper at the end of April. This represents the 20th acquisition overall for the company, according to Crunchbase data.

Spot was founded in 2015 in Tel Aviv. It raised over $52 million, according to Crunchbase data. The deal is expected to close later this year, assuming it passes typical regulatory hurdles.


By Ron Miller

Salesforce names Vlocity founder David Schmaier CEO of new Salesforce Industries division

When Salesforce announced it was acquiring Vlocity for $1.33 billion in February, it was a deal that made sense for both companies. Today, the company announced that the deal has closed and Vlocity CEO David Schmaier has been named CEO of a new division called Salesforce Industries.

Vlocity has built several industry-specific CRM tools such media and entertainment, healthcare and government on top of the Salesforce platform. While Salesforce has developed some of its own industry solutions, having a division devoted to verticalized tools creates additional market opportunities for the company.

Schmaier sees the new division as a commitment from the company on the value of an industry-focused approach.

“As Vlocity becomes part of what we’re calling Salesforce industries, this will be a larger group within Salesforce to really focus on bringing these industry-specific solutions to the customer, helping them go digital and working in a whole new way,” Schmaier told TechCrunch.

Salesforce president and COO Bret Taylor will be Schmaier’s boss. Writing in a blog post announcing the new division, Taylor said that like so many aspects of technology solutions these days, the industry focus is about helping companies with digital transformation. As the world changes before our eyes during the pandemic, companies are being forced to move operations online, and Salesforce wants to provide more specific solutions for customers who need it.

“Companies in every industry have a digital transformation imperative like never before — and many are accelerating their plans for a digital-first, work-from-anywhere environment. With Salesforce Customer 360 and Vlocity, our customers have the most advanced industries platform as well as tools and expert guidance completely tailored to their specific needs,” Taylor wrote.

Schmaier says the fact that his company’s tooling was already built on top of Salesforce allows them to really hit the ground running without the integration challenges that combining organizations typically face after an acquisition like this one.

“I’ve been involved in various mergers and acquisitions over my 30-year career, and this is the most unique one I’ve ever seen because the products are already 100% integrated because we built our six vertical applications on top of the Salesforce platform. So they’re already 100% Salesforce, which is really kind of amazing. So that’s going to make this that much simpler,” he said.

It’s likely that Salesforce will continue to build on the new division and add additional applications over time given the platform is already in place. “We basically have a platform now inside Salesforce to build verticals. So the cost to build new verticals is a fraction of what it was for us to build the first one because of this industry cloud platform. So we are going to look at opportunities to build new ones but we’re not ready to announce that today. For starters, we are forming this one organization,” Schmaier said.

The company reported a record quarter last Thursday, but light guidance for next quarter spooked investors and the stock was down on Friday (It is up .77% today as of publication). The company does not rest on its laurels though and having a division in place like Salesforce Industries provides a more focused way of dealing with verticals and another possible source of revenue.


By Ron Miller

Aaron Levie: ‘We have way too many manual processes in businesses’

Box CEO Aaron Levie has been working to change the software world for 15 years, but the pandemic has accelerated the move to cloud services much faster than anyone imagined. As he pointed out yesterday in an Extra Crunch Live interview, who would have thought three months ago that businesses like yoga and cooking classes would have moved online — but here we are.

Levie says we are just beginning to see the range of what’s possible because circumstances are forcing us to move to the cloud much faster than most businesses probably would have without the pandemic acting as a change agent.

“Overall, what we’re going to see is that anything that can become digital probably will be in a much more accelerated way than we’ve ever seen before,” Levie said.

Fellow TechCrunch reporter Jon Shieber and I spent an hour chatting with Levie about how digital transformation is accelerating in general, how Box is coping with that internally and externally, his advice for founders in an economic crisis and what life might be like when we return to our offices.

Our interview was broadcast on YouTube and we have included the embed below.


Just a note that Extra Crunch Live is our new virtual speaker series for Extra Crunch members. Folks can ask their own questions live during the chat, with past and future guests like Alexis Ohanian, Garry Tan, GGV’s Hans Tung and Jeff Richards, Eventbrite’s Julia Hartz and many, many more. You can check out the schedule here. If you’d like to submit a question during a live chat, please join Extra Crunch.


On digital transformation

The way that we think about digital transformation is that much of the world has a whole bunch of processes and ways of working — ways of communicating and ways of collaborating where if those business processes or that way we worked were able to be done in digital forms or in the cloud, you’d actually be more productive, more secure and you’d be able to serve your customers better. You’d be able to automate more business processes.

We think we’re [in] an environment that anything that can be digitized probably will be. Certainly as this pandemic has reinforced, we have way too many manual processes in businesses. We have way too slow ways of working together and collaborating. And we know that we’re going to move more and more of that to digital platforms.

In some cases, it’s simple, like moving to being able to do video conferences and being able to collaborate virtually. Some of it will become more advanced. How do I begin to automate things like client onboarding processes or doing research in a life sciences organization or delivering telemedicine digitally, but overall, what we’re going to see is that anything that can become digital probably will be in a much more accelerated way than we’ve ever seen before.

How the pandemic is driving change faster


By Ron Miller