Microsoft today announced the launch of a new open-source service mesh based on the Envoy proxy. The Open Service Mesh is meant to be a reference implementation of the Service Mesh Interface (SMI) spec, a standard interface for service meshes on Kubernetes that has the backing of most of the players in this ecosystem.
“SMI is really resonating with folks and so we really thought that there was room in the ecosystem for a reference implementation of SMI where the mesh technology was first and foremost implementing those SMI APIs and making it the best possible SMI experience for customers,” Microsoft partner program manager (and CNCF board member) Gabe Monroy told me.
He also added that, because SMI provides the lowest common denominator API design, Open Service Mesh gives users the ability to “bail out” to raw Envoy if they need some more advanced features. This “no cliffs” design, Monroy noted, is core to the philosophy behind Open Service Mesh.
As for its feature set, SMI handles all of the standard service mesh features you’d expect, including securing communications between services using mTLS, managing access control policies, service monitoring and more.
There are plenty of other service mesh technologies in the market today, though. So why would Microsoft launch this?
“What our customers have been telling us is that solutions that are out there today, Istio being a good example, are extremely complex,” he said. “It’s not just me saying this. We see the data in the AKS support queue of customers who are trying to use this stuff — and they’re struggling right here. This is just hard technology to use, hard technology to build at scale. And so the solutions that were out there all had something that wasn’t quite right and we really felt like something lighter weight and something with more of an SMI focus was what was going to hit the sweet spot for the customers that are dabbling in this technology today.”
Monroy also noted that Open Service Mesh can sit alongside other solutions like Linkerd, for example.
A lot of pundits expected Google to also donate its Istio service mesh to the CNCF. That move didn’t materialize. “It’s funny. A lot of people are very focused on the governance aspect of this,” he said. “I think when people over-focus on that, you lose sight of how are customers doing with this technology. And the truth is that customers are not having a great time with Istio in the wild today. I think even folks who are deep in that community will acknowledge that and that’s really the reason why we’re not interested in contributing to that ecosystem at the moment.”
How and when should startup founders think about the “exit”? It’s the perennial question in tech entrepreneurialism, but the how’s and when’s are questions to which there are a multitude of answers. For one thing, new founders often forget that the terms of the exit may not eventually be entirely in their control. There’s the board to think of, the strategic direction of the company, the first-in investors, the last-in. You name it. We’ll be chatting about this at Disrupt 2020.
Exits normally happen in only one of two ways: Either the startup gets acquired for enough money to give the investors a return or it grows big enough to list on the public markets. And it just so happens we have two perfect founders who will be able to unpack their own journeys on those two roads.
Cloudflare’s Michelle Zatlyn saw every nook and cranny of the company’s journey towards its IPO, which received a warm reception, even if there were a few bumps along the road leading up to it. What comes after an IPO and how to do you even get there in the first place? Zatlyn will be laying it all out for us.
PlanGrid’s journey to acquisition by Autodesk was equally fascinating, and Tracy Young – who, as CEO and co-founder, shepherded the company to an $875 Million exit – will be able to give us an insight into what it’s like to dance with a potential acquirer, go through that (often fraught) process, and come out the other side.
PandaDoc, the startup that provides a fully digital sales document workflow from proposal to electronic signature to collecting payment, announced a $30 million Series B extension today, making it the the second such extension the company has taken since taking its original $15 million Series B in 2017. The total for the three B investments is $50 million.
Company co-founder and CEO Mikita Mikado says that he took this approach, taking the original money in 2017, then $5 million last year along with the money announced today because it made more sense financially for the company than taking a huge chunk of money all at once.
“Basically when we do little chunks of cash frequently, [we found that] you dilute yourself less,” Mikado told TechCrunch. He said that they’ve grown comfortable with this approach because the business became more predictable once it passed 10,000 customers. In fact today it has 20,000.
“With a high velocity in-bound sales model, you can predict what’s going to happen next month or [say] six months out. So you kind of have this luxury of raising as much money as you need when you need it, minimizing dilution just like public companies do,” he said.
While he wouldn’t discuss specifics in terms of valuations he did say that the B1 had 2x the valuation of the original B round and the B2 had double the valuation of the B1.
For this round, One Peak led the investment with participation from Microsoft’s Venture Fund (M12), Savano Capital Partners, Rembrandt Venture Partners and EBRD Venture Capital Investment Programme.
Part of the company’s growth strategy is using their eSignature tool to move people to the platform. They made that tool free in March just as the pandemic was hitting hard in the U.S., and it has proven to be what Mikado called “a lead magnet” to get more people familiar with the company.
Once they do that he says, they start to look at the broader set of tools and they can become paying customers. “This launch helped us validate that businesses need a broader workflow solution. Businesses used to think of the eSignature as the holy grail in getting a deal done. Now they are realizing that eSignature is just a moment in time. The full value is what happens before, during and after the eSignature in order to get deals done,” Mikado said.
The company currently has 334 employees with plans to hit 380 by year’s end and is aiming for 470 by next year. With the office in San Francisco, Belarus and Manila, it has geographic diversity built in, but Mikado says it’s something they are still working at and includes anti-bias programs and training and leadership programs to give more people a chance to be hired or promoted into management.
When it came to shutting down offices and working from home, Mikado admits it was a challenge, especially since some of the geographies they operate in might not have access to a good internet connection at home or face other challenges, but overall he says it has worked out in terms of maintaining productivity across the company. And he points out being geographically diverse, they have had to deal with online communications for some time.
As Kubernetes and cloud native technologies proliferate, developers and IT have found a growing set of technical challenges they need to address, and new concepts and projects have popped up to deal with them. For instance, operators provide a way to package, deploy and manage your cloud native application in an automated way. Kubermatic wants to take that concept a step further, and today the German startup announced KubeCarrier, a new open source, cloud native service management hub.
Kubermatic co-founder Sebastian Scheele says three or four years ago, the cloud native community needed to solve a bunch of technical problems around deploying Kubernetes clusters such as overlay networking, service meshes and authentication. He sees a similar set of problems arising today where developers need more tools to manage the growing complexity of running Kubernetes clusters at scale.
Kubermatic has developed KubeCarrier to help solve one aspect of this. “What we’re currently focusing on is how to provision and manage workloads across multiple clusters, and how IT organizations can have a service hub where they can provide those services to their organizations in a centralized way,” Scheele explained.
Scheele says that KubeCarrier provides a way to manage and implement all of this, giving organizations much greater flexibility beyond purely managing Kubernetes. While he sees organizations with lots of Kubernetes operators, he says that as he sees it, it doesn’t stop there. “We have lots of Kubernetes operators now, but how do we manage them, especially when there are multiple operators, [along with] the services they are provisioning,” he asked.
This could involve provisioning something like Database as a Service inside the organization or for external customers, while combining or provisioning multiple services, which are working on multiple levels and a need a way to communicate with each other.
“That is where Kubecarrier comes in. Now, we can help our customers to build this kind of automation around provisioning, and service capability so that different teams can provide different services inside the organization or to external customers,” he said.
As the company explains it, “KubeCarrier addresses these complexities by harnessing the Kubernetes API and Operators into a central framework allowing enterprises and service providers to deliver cloud native service management from one multi-cloud, multi-cluster hub.”
KubeCarrier is available on GitHub, and Scheele says the company is hoping to get feedback from the community about how to improve it. In parallel, the company is looking for ways to incorporate this technology into its commercial offerings and that should be available in the next 3-6 months, he said.
Harness has made a name for itself creating tools like continuous delivery (CD) for software engineers to give them the kind of power that has been traditionally reserved for companies with large engineering teams like Google, Facebook and Netflix. Today, the company announced it has acquired Drone.io, an open source continuous integration (CI) company, marking the company’s first steps into open source, as well as its first acquisition.
The companies did not share the purchase price.
“Drone is a continuous integration software. It helps developers to continuously build, test and deploy their code. The project was started in 2012, and it was the first cloud native, container native continuous integration solution on the market, and we open sourced it,” company co- founder Brad Rydzewski told TechCrunch.
Drone delivers pipeline configuration information as code in a Docker container. Image: Drone.io
While Harness had previously lacked a CI tool to go with its continuous delivery tooling, founder and CEO Jyoti Bansal said this was less about filling in a hole than expanding the current platform.
“I would call it an expansion of our vision and where we were going. As you and I have talked in the past, the mission of Harness is to be a next generation software delivery platform for everyone,” he said. He added that buying Drone had a lot of upside.”It’s all of those things — the size of the open source community, the simplicity of the product — and it [made sense], for Harness and Drone to come together and bring this integrated CI/CD to the market.”
While this is Harness’ first foray into open source, Bansal says it’s just the starting point and they want to embrace open source as a company moving forward. “We are committed togetting more and more involved in open source and actually making even more parts of Harness, our original products, open source over time as well,” he said.
For Drone community members who might be concerned about the acquisition, Bansal said he was “100% committed” to continuing to support the open source Drone product. In fact, Rydzewski said he wanted to team with Harness because he felt he could do so much more with them than he could have done continuing as a stand-alone company.
“Drone was a growing community, a growing project and a growing business. It really came down to I think the timing being right and wanting to partner with a company like Harness to build the future. Drone laid a lot of the groundwork, but it’s a matter of taking it to the next level,” he said.
Bansal says that Harness intends to also offer a commercial version of Drone with some enterprise features on the Harness platform, even while continuing to support the open source side of it.
Drone was founded in 2012. The only money it raised was $28,000 when it participated in the Alchemist Accelerator in 2013, according to Crunchbase data. The deal has closed and Rydzewski has joined the Harness team,
On Wednesday, the e-commerce giant announced it has partnered with Bharti Airtel, the third-largest telecom operator in India with more than 300 million subscribers, to sell a wide-range of AWS offerings under Airtel Cloud brand to small, medium, and large-sized businesses in the country.
The deal could help AWS, which leads the cloud market in India, further expand its dominance in the country. The move follows a similar deal Reliance Jio, India’s largest telecom operator, struck with Microsoft last year to sell cloud services to small businesses. The two announced a 10-year partnership to “serve millions of customers.”
Airtel, which serves over 2,500 large enterprises and more than a million emerging businesses, itself signed a similar cloud deal with Google in January this year. That partnership is still in place.
“AWS brings over 175 services. We pretty much support any workload on the cloud. We have the largest and the most vibrant community of customers,” said Puneet Chandok, President of AWS in India and South Asia, said on a call with reporters.
The two companies will also collaborate on building new services and help existing customers migrate to Airtel Cloud, they said.
Today’s deal illustrates Airtel’s push to build businesses beyond its telecom venture, said Harmeen Mehta, Global CIO and Head of Cloud and Security Business at Airtel, said on the call.
Deals with carriers, which were very common a decade ago as tech giants looked to acquire new users in India, illustrates the phase of the cloud adoption in the nation.
Nearly half a billion people in India came online last decade. And slowly, small businesses and merchants are also beginning to use digital tools, storage services, and accept online payments.
India has emerged as one of the emerging leading grounds for cloud services. The public cloud services market of the country is estimated to reach $7.1 billion by 2024, according to research firm IDC.
This is a developing story. More to follow…
You might have missed it, but amidst the current political-M&A-pandemic-election-disinformation news cycle we find ourselves in this week, SaaS and cloud companies reached new public market records.
Yesterday, the Bessemer-Nasdaq cloud index closed at 2,035.54, a new record finish for the basket of software companies. And, today, the index broached the 2,040 mark before ceding some ground.
What matters for our purposes is that with a good chunk of the Q2 earnings cycle behind us, software companies are not only holding onto their gains from earlier in the year, they are managing to add to them, albeit modestly. Of course, valuation expansion during earnings season could still lead to gently falling multiples; as companies grow, if their shares gain value at a slower pace, their price/sales ratio can lose ground.
Regardless, for our purposes it’s notable that recent public market gains are not dissipating. Tech valuation boosts have helped major American indices regain ground lost early in the year, and Q2 earnings were a possible threat to prior progress. So far earnings-related dents are thin on the ground.
A 17-year-old Florida teenager is accused of perpetrating one of the year’s biggest and most high-profile hacks: Twitter.
A federal 30-count indictment filed in Tampa said Graham Ivan Clark used a phone spearphishing attack to pivot through multiple layers of Twitter’s security and bypassed its two-factor authentication to gain access to an internal “admin” tool that let the hacker take over any account. With two accomplices named in a separate federal indictment, Clark — who went by the online handle “Kirk” — allegedly used the tool to hijack the accounts of dozens of celebrities and public figures, including Bill Gates, Elon Musk and former president Barack Obama, to post a cryptocurrency scam netting over $100,000 in bitcoin in just a few hours.
It was, by all accounts, a sophisticated attack that required technical skills and an ability to trick and deceive to pull off the scam. Some security professionals were impressed, comparing the attack to one that had the finesse and professionalism of a well-resourced nation-state attacker.
But a profile in The New York Times describes Clark was an “adept scammer with an explosive temper.”
In the teenager’s defense, the attack could have been much worse. Instead of pushing a scam that promised to “double your money,” Clark and his compatriots could have wreaked havoc. In 2013, hackers hijacked the Associated Press’ Twitter account and tweeted a fake bomb attack on the White House, sending the markets plummeting — only to quickly recover after the all-clear was given.
But with control of some of the world’s most popular Twitter accounts, Clark was for a few hours in July one of the most powerful people in the world. If found guilty, the teenager could spend his better years behind bars.
Here’s more from the past week.
In a typical security team, engineers write one-off scripts to track a particular problem on a cloud vendor such as an unauthorized user on your GitHub account, and while engineers are capable of writing such scripts, it’s not exactly an efficient or scalable way to deal with the range of security problems these pros need to track.
Vectrix, a member of the Y Combinator Summer 2020 cohort started by three security veterans, wants to fix that problem. It has created a security marketplace where fellow security pros write modules to automate these kinds of fixes, and other security pros can take advantage without reinventing the script-writing wheel every time.
Alex Dunbrack, company co-founder and COO, says that he and fellow co-founders, CTO Matthew Lewis and CEO Corey Mahan saw this problem firsthand in their previous jobs at PlanGrid, Vimeo and Autodesk. So like many YC company founders, they decided to build a solution.
“It’s a marketplace of automated security tools that monitor tech and have response capabilities for any security issues that a company may have within their cloud vendors,” Dunbrack explained. He says this could be on GitHub, AWS, G Suite, potentially any cloud service.
The idea is to have security professionals build these modules, then give them a “royalty” and bragging rights for coming up with a viable solution. Dunbrack says it’s not unlike the HackerOne model, which provides a financial incentive and community recognition to find vulnerabilities in code.
Users don’t actually download anything. They simply select a module, enter their cloud service credentials and provide an output like Slack or Jira for any alerts the module generates.
Image Credits: Vectrix
The startup vets the modules and the developers before allowing them in the marketplace. While this is a manual process at the moment, he says they are working on bringing more automation to it. For now, for each person that wants to contribute modules, they do an interview, a reference check, employment background check and similar types of investigation.
Once they pass this, and the security pro writes the module, it has to pass further scrutiny. “We basically scope exactly what they’re going to build and the kinds of alerts that will come out of it. Then from there, we have an extremely templated logic scheme on the code side where they’re just writing the logic to go do the scan,” he said.
Module writers can’t see any user information on the service, and Vectrix makes sure there are no issues like outbound requests for data. Presently they have 10 modules with plans to add several more soon. While they are working on the pricing model, today customers pay a flat fee for access to the entire marketplace, rather than paying per module.
The company is currently just the three co-founders, but they hope to expand, and when they do they have already given a lot of thought about how to build a diverse and inclusive company. He says, for starters, they are not swayed by the Silicon Valley network effect.
“A lot of people will say ‘We simply want the best people,’ but our interpretation of the best people is really a collective of differing thoughts and experiences that really make someone’s perspective unique. That comes from diversity in the way that we see it, so in a lot of senses bringing the best people on is bringing the widest range of thinking processes, and that comes with diversity and being inclusive, and kind of taking all of those factors into account,” he said.
As for the YC experience, Dunbrack says he was mostly looking forward to learning from the network of companies that came before him, and he says that even virtually the company has succeeded in giving him that experience.
So far, the company has bootstrapped and used the money from Y Combinator, but it intends to do a fundraising round soon. “We’re cognizant of what we’re bringing to the industry and the value there. So bringing on strategic partners is really how we’re going to be approaching this,” he said.
Security professionals are constantly dealing with an onslaught of information as their various tools trigger alerts, some of which require their attention and some which don’t. Unfortunately, it requires addressing the alert to find that out. GreyNoise wants to help by filtering out benign security alerts, leaving security pros to deal with the ones that matter.
Today, the company announced a $4.8 million seed investment led by CRV with participation from Paladin Capital Group and several individual tech executive investors.
“Usually about 20% of the alerts that you’re looking at [don’t require your attention]. And those alerts are generated by both good guys and bad guys who are opportunistically scanning and crawling and probing and attacking every single device all around the internet,” GreyNoise founder Andrew Morris told TechCrunch.
He adds, “It creates this background noise problem, so we basically collect all of that data from all of those people who are scanning and crawling everybody on the entire internet, analyze it and we filter it out from what our customers see. So what they end up with is about 20%, fewer alerts.”
Surprisingly, the company is not using machine learning to do this (although adding machine learning elements is on the roadmap). Instead, Morris says it involves a lot of automated analysis of sensor data.
“We have a giant network of collector sensors that are sitting in all these different data centers all around the internet and hundreds of data centers around the internet. And we’re just applying a bunch of rules to the traffic that they all see to end up with the output of our core product,” he said.
As the company moves forward with this new funding, he says primarily he wants to get away from this approach and get more data from customers in exchange for discounts on their subscription costs.
“Moving forward, it’s cost prohibitive for us to collect all of the data that we want firsthand. So we’re going to have to start basically building products that are enabling our users to collect data for us. And that’s something that we’re going to be building out using this funding,” Morris said.
In addition, they will be partnering with other key vendors like ISPs and data center owners to help them collect additional data.
Interestingly, this was an entirely COVID transaction with CRV’s Reid Christian never meeting Morris in person, conducting the entire process over Zoom. “A sign of the times, Andrew and I have never met in person and likely won’t for quite some time. We were connected in the midst of quarantine, both of us holed up in our apartments (DC and SF, respectively) where we sat on countless Zoom calls, mostly getting to know each other and discussing the opportunity ahead of GreyNoise,” Christian wrote in a blog post announcing the deal.
The startup has 7 employees to this point. Morris said that he has plans to hire 10 people in the next year with an emphasis on sales, marketing and engineering. As he hires more people, he says it’s imperative to be thinking about diversity and inclusion in his hiring in the early stages of the company.
“The best way to do this is to hire as diverse as humanly possible from the very beginning, because it’s significantly harder to make a company more diverse after the fact than it is to think about inclusion and diversity from the very beginning. And so that’s how we’ve been thinking about everything right now with every hire that we’re doing,” he said. How that will work as he builds out the company is still something he is considering and he plans work with D&I experts to help flesh out a plan.
Morris founded the company in the Washington, D.C. area in 2017, came to market in 2018 with the first version of the product and today has 40 customers.
The cloud market is coming into its own during the pandemic as the novel coronavirus forced many companies to accelerate plans to move to the cloud, even while the market was beginning to mature on its own.
This week, the big three cloud infrastructure vendors — Amazon, Microsoft and Google — all reported their earnings, and while the numbers showed that growth was beginning to slow down, revenue continued to increase at an impressive rate, surpassing $30 billion for a quarter for the first time, according to Synergy Research Group numbers.
As the Internet of Things, proliferates, security cameras are getting smarter. Today, these devices have machine learning capability that help the camera automatically identify what it’s looking at — for instance an animal or a human intruder? Today, Cisco announced that it’s acquired Swedish startup Modcam and making it part of its Meraki smart camera portfolio with the goal of incorporating Modcam computer vision technology into its portfolio.
The companies did not reveal the purchase price, but Cisco tells us that the acquisition has closed.
In a blog post announcing the deal, Cisco Meraki’s Chris Stori says Modcam is going to up Meraki’s machine learning game, while giving it some key engineering talent, as well.
“In acquiring Modcam, Cisco is investing in a team of highly talented engineers who bring a wealth of expertise in machine learning, computer vision and cloud-managed cameras. Modcam has developed a solution that enables cameras to become even smarter,” he wrote.
What he means is that today, while Meraki has smart cameras that include motion detection and machine learning capabilities, this is limited to single camera operation. What Modcam brings is the added ability to gather information and apply machine learning across multiple cameras, greatly enhancing the camera’s capabilities.
“With Modcam’s technology, this micro-level information can be stitched together, enabling multiple cameras to provide a macro-level view of the real world,” Stori wrote. In practice, as an example, that could provide a more complete view of space availability for facilities management teams, an especially important scenario as businesses try to find safer ways to open during the pandemic. The other scenario Modcam was selling was giving a more complete picture of what was happening on the factory floor.
All of Modcams employees, which Cisco described only as “a small team” have joined Cisco, and the Modcam technology will be folded into the Meraki product line, and will no longer be offered as a stand-alone product, a Cisco spokesperson told TechCrunch.
Modcam was founded in 2013 and has raised $7.6 million, according to Crunchbase data. Cisco acquired Meraki back in 2012 for $1.2 billion.
Amazon has said the number of demands for user data made by U.S. federal and local law enforcement have increased during the first half of 2020 than during the same period a year earlier.
The disclosure came in the company’s latest transparency report, published Thursday.
The figures show that Amazon received 23% more subpoenas and search warrants, and a 29% increase in court orders compared to the first half of 2019. That includes data collected from its Amazon Echo devices and its Kindle and Fire tablets.
Breaking those figures down, Amazon said it received:
The number of requests to the company’s cloud services, Amazon Web Services, also went up compared to a year earlier.
But it’s not clear what caused the rise in U.S. government demands for user data. A spokesperson for Amazon did respond to a request for comment.
But the company saw the number of overseas requests drop by about one-third compared to the same period a year earlier. Amazon rejected 92% of the 177 overseas requests it received, turning over partial user data in 10 cases and all requested data in four cases.
Amazon also said it received between 0 and 249 national security requests, flat from previous reports. Justice Department rules on disclosing classified requests only allow companies to respond in numerical ranges.
Amazon was one of the last major tech companies to issue a transparency report, despite mounting pressure from privacy advocates. But its report remains far lighter on details compared to its Silicon Valley rivals.
The company’s Ring smart camera division, despite facing criticism for its poor security practices its close relationships with law enforcement, has yet to release any data related to police requests for user data.
In the monitoring world, typically when you spin up a new instance, you pay a fee to monitor it. If you are particularly active in any given month, that can result in a hefty bill at the end of the month. That leads to limiting what you choose to monitor to control costs. New Relic wants to change that, and today it announced that it’s moving to a model where customers pay by the user instead with a smaller less costly data component.
The company is also simplifying its product set with the goal of encouraging customers to instrument everything instead of deciding what to monitor and what to leave out to control cost. “What we’re announcing is a completely reimagined platform. We’re simplifying our products from 11 to three, and we eliminate those barriers to standardizing on a single source of truth,” New Relic founder and CEO Lew Cirne told TechCrunch.
The way the company can afford to make this switch is by exposing the underlying telemetry database that it created to run its own products. By taking advantage of this database to track all of your APM, tracing and metric data all in one place, Cirne says they can control costs much better and pass those savings onto customers, whose bills should be much smaller based on a this new pricing model, he said.
“Prior to this, there has not been any technology that’s good at gathering all of those data types into a single database, what we would call a telemetry database. And we actually created one ourselves and it’s the backbone of all of our products. [Up until now], we haven’t really exposed it to our customers, so that they can put all their data into it,” he said.
New Relic Telemetry Data. Image: New Relic
The company is distilling the product set into three main categories. The first is the Telemetry Data Platform, which offers a single way to gather any events, logs or traces, whether from their agents or someone else’s or even open source like Prometheus.
The second product is called Full-stack Observability, which includes all of their previous products, which were sold separately such as APM, mobility, infrastructure and logging. Finally they are offering an intelligence layer called New Relic AI.
Cirne says by simplifying the product set and changing the way they bill, it will save customers money through the efficiencies they have uncovered. In practice he says, pricing will consist of a combination of users and data, but he believes their approach will result in much lower bills and more cost certainty for customers.
“It’ll vary by customer so this is just a rough estimate but imagine that the typical New Relic bill under this model will be a 70% per user charge and 30% data charge, roughly, but so if that’s the case, and if you look at our competitors 100% of the bill is data,” he said.
The new approach is available starting today. Companies can try it with 100 GB single user account.
Buildots, a Tel Aviv and London-based startup that is using computer vision to modernize the construction management industry, today announced that it has raised $16 million in total funding. This includes a $3 million seed round that was previously unreported and a $13 million Series A round, both led by TLV Partners. Other investors include Innogy Ventures, Tidhar Construction Group, Ziv Aviram (co-founder of Mobileye & OrCam), Magma Ventures head Zvika Limon, serial entrepreneurs Benny Schnaider and Avigdor Willenz, as well as Tidhar chairman Gil Geva.
The idea behind Buildots is pretty straightforward. The team is using hardhat-mounted 360-degree cameras to allow project managers at construction sites to get an overview of the state of a project and whether it remains on schedule. The company’s software creates a digital twin of the construction site, using the architectural plans and schedule as its basis, and then uses computer vision to compare what the plans say to the reality that its tools are seeing. With this, Buildots can immediately detect when there’s a power outlet missing in a room or whether there’s a sink that still needs to be installed in a kitchen, for example.
“Buildots have been able to solve a challenge that for many seemed unconquerable, delivering huge potential for changing the way we complete our projects,” said Tidhar’s Geva in a statement. “The combination of an ambitious vision, great team and strong execution abilities quickly led us from being a customer to joining as an investor to take part in their journey.”
The company was co-founded in 2018 by Roy Danon, Aviv Leibovici and Yakir Sundry. Like so many Israeli startups, the founders met during their time in the Israeli Defense Forces, where they graduated from the Talpiot unit.
“At some point, like many of our friends, we had the urge to do something together — to build a company, to start something from scratch,” said Danon, the company’s CEO. “For us, we like getting our hands dirty. We saw most of our friends going into the most standard industries like cloud and cyber and storage and things that obviously people like us feel more comfortable in, but for some reason we had like a bug that said, ‘we want to do something that is a bit harder, that has a bigger impact on the world.’ ”
So the team started looking into how it could bring technology to traditional industries like agriculture, finance and medicine, but then settled upon construction thanks to a chance meeting with a construction company. For the first six months, the team mostly did research in both Israel and London to understand where it could provide value.
Danon argues that the construction industry is essentially a manufacturing industry, but with very outdated control and process management systems that still often relies on Excel to track progress.
Construction sites obviously pose their own problems. There’s often no Wi-Fi, for example, so contractors generally still have to upload their videos manually to Buildots’ servers. They are also three dimensional, so the team had to develop systems to understand on what floor a video was taken, for example, and for large indoor spaces, GPS won’t work either.
The teams tells me that before the COVID-19 lockdowns, it was mostly focused on Israel and the U.K., but the pandemic actually accelerated its push into other geographies. It just started work on a large project in Poland and is scheduled to work on another one in Japan next month.
Because the construction industry is very project-driven, sales often start with getting one project manager on board. That project manager also usually owns the budget for the project, so they can often also sign the check, Danon noted. And once that works out, then the general contractor often wants to talk to the company about a larger enterprise deal.
As for the funding, the company’s Series A round came together just before the lockdowns started. The company managed to bring together an interesting mix of investors from both the construction and technology industries.
Now, the plan is to scale the company, which currently has 35 employees, and figure out even more ways to use the data the service collects and make it useful for its users. “We have a long journey to turn all the data we have into supporting all the workflows on a construction site,” said Danon. “There are so many more things to do and so many more roles to support.”
Google One, Google’s subscription program for buying additional storage and live support, is getting an update today that will bring free phone backups for Android and iOS devices to anybody who installs the app — even if they don’t have a paid membership. The catch: while the feature is free, the backups count against your free Google storage allowance of 15GB. If you need more you need — you guessed it — a Google One membership to buy more storage or delete data you no longer need. Paid memberships start at $1.99/month for 100GB.
Last year, paid members already got access to this feature on Android, which stores your texts, contacts, apps, photos and videos in Google’s cloud. The “free” backups are now available to Android users. iOS users will get access to it once the Google One app rolls out on iOS in the near future.
With this update, Google is also introducing a new storage manager tool in Google One, which is available in the app and on the web, and which allows you to delete files and backups as needed. The tool works across Google properties and lets you find emails with very large attachments or large files in your Google Drive storage, for example.
With this free backup feature, Google is clearly trying to get more people onto Google One. The free 15GB storage limit is pretty easy to hit, after all (and that’s for your overall storage on Google, including Gmail and other services) and paying $1.99 for 100GB isn’t exactly a major expense, especially if you are already part of the Google ecosystem and use apps like Google Photos already.
Financial services companies like banks and insurance tend to be heavily regulated. As such they require a special level of security and auditability. Hearsay, which makes compliant communications tools for these types of companies, announced a new partnership with Salesforce today, enabling smooth integration with Salesforce CRM and marketing automation tools.
The company also announced that Salesforce would be taking a minority stake in Hearsay, although company co-founder and CEO Clara Shih, did not provide any details on that part of the announcement.
Shih says the company created the social selling category when it launched 10 years ago. Today, it provides a set of tools like email, messaging and websites along with a governance layer to help financial services companies interact with customers in a compliant way. Their customers are primarily in banking, insurance, wealth management and mortgages.
She said that they realized if they could find a way to share the data they were collecting with the Hearsay toolset with CRM and marketing automation software in an automated way, it would make greater use of this information than it could on its own. To that end, they have created a set of APIs to enable that with some built-in connectors. The first one will be to connect Hearsay to Salesforce with plans to add other vendors in the future.
“It’s about being able to connect [data from Hearsay] with the CRM system of record, and then analyzing it across thousands, if not tens of thousands of advisors or bankers in a single company, to uncover best practices. You could then use that information like GPS driving directions that help every advisor behave in the moment and reach out in the moment like the very best advisor would,” Shih explained.
In practice, this means sharing the information with the customer data platform (CDP), the CRM and marketing automation tooling to deliver more intelligent targeting based on a richer body of information. So the advisor can use information gleaned from everything he or she knows about the client across the set of tools to deliver more meaningful personal message instead of a targeted ad or an email blast. As Shih points out, the ad might even make sense, but could be tone deaf depending on the circumstances.
“What we focus on is this human-client experience, and that can only be delivered in the last mile because it’s only with the advisor that many clients will confide in these very important life events and life decisions, and then conversely, it’s only in the last mile that the trusted advisor can deliver relationship advice,” she said.
She says what they are trying to do by combining streams of data about the customer is build loyalty in a way that pure technology solutions just aren’t capable of doing. As she says, nobody says they are switching banks because it has the best chat bot.
Hearsay was founded in 2009 and has raised $51 million, as well as whatever other money Salesforce will be adding to the mix with today’s investment. Other investors include Sequoia and NEA Associates. Its last raise was way back in 2013, a $30 million Series C.
When SAP announced it was spinning out Qualtrics on Sunday, a company it bought less than two years ago for an eye-popping $8 billion, it was enough to make your head spin. At the time, then CEO Bill McDermott saw it as a way to bridge the company’s core operational with customer data, while acquiring a cloud company that could help generate recurring revenue for the ERP giant, and maybe give it a dose of innovation along the way.
But Sunday night the company announced it was spinning out the acquisition, giving its $8 billion baby independence, and essentially handing the company back to founder Ryan Smith, who will become the largest individual shareholder when this all over.
It’s not every day you see founders pull in a windfall like $8 billion, get sucked into the belly of the large corporate beast and come out the other side just 20 months later with the cash, independence and CEO as the largest individual stockholder.
While SAP will own a majority of the stock, much like Dell owns a majority of VMware, the company will operate independently and have its own board. It can acquire other firms and make decisions separately from SAP.
We spoke to a few industry analysts to find out what they think about all this, and while the reasoning behind the move involves a lot of complex pieces, it could be as simple as the deal was done under the previous CEO, and the new one was ready to move on from it.
It’s certainly unusual for a company like SAP to spend this kind of money, and then turn around so quickly and spin it off. In fact, Brent Leary, principal analyst at CRM Essentials, says that this was a move he didn’t see coming, and it could be related to that fat purchase price. “To me it could mean that SAP didn’t see the synergies of the acquisition panning out as they had envisioned and are looking to recoup some of their investment,” Leary told TechCrunch.
Holger Mueller, an analyst with Constellation Research agreed with Leary’s assessment, but doesn’t think that means the deal failed. “SAP doesn’t lose anything in regards to their […] data and experience vision, as they still retain [controlling interest in Qualtrics] . It also opens the opportunity for Qualtrics to partner with other ERP vendors [and broaden its overall market],” he said.
Jeanne Bliss, founder and president at CustomerBLISS, a company that helps clients deliver better customer experiences sees this as a positive step forward for Qualtrics. “This spin off enables Qualtrics to focus on its core business and prove its ability to provide essential technology executives are searching for to enable speed of decision making, innovation and customization,” she said.
Patrick Moorhead, founder and principal analyst at Moor Insight & Strategy sees the two companies moving towards a VMware/Dell model where SAP removes the direct link between them, which could then make them more attractive to a broader range of customers than perhaps they would have been as part of the SAP family. “The big play here is all financial. With tech stocks up so high, SAP isn’t seeing the value in its stock. I am expecting a VMware kind of alignment with a strategic collaboration agreement,” he said.
Ultimately though, he says the the move reflects a cultural failure on the part of SAP. It simply couldn’t find a way to co-exist with a younger, more nimble company like Qualtrics. “I believe SAP spinning out Qualtrics is a sign that its close connection to create symbiotic value has failed. The original charter was to bring it in to modernize SAP but apparently the “not invented here” attitudes kicked in and doomed integration,” Moorhead said.
That symbiotic connection would have involved McDermott’s vision of combining operational and customer data, but Leary also suggested that since the deal happened under previous the CEO, that perhaps new CEO Christian Klein wants to start with a clean slate and this simply wasn’t his deal.
In the end, Qualtrics got all that money, gets to IPO after all, and returns to being an independent company selling to a larger potential customer base. All of the analysts we spoke to agreed the news is a win for Qualtrics itself.
Leary says the motivation for the original deal was to give SAP a company that could sell beyond its existing customer base. “It seems like that was the impetus for the acquisition, and the fact that SAP is spinning it off as an IPO 20 months after acquiring Qualtrics gives me the impression that things didn’t come together as expected,” he said.
Mueller also sees nothing but postivies Qualtrics. “It’s a win […] for Qualtrics, which can now deliver what they wanted [from the start], and it’s a win for customers as Qualtrics can run as fast as they want,” he said.
Regardless, the company moves on, and the Qualtrics IPO moves forward, and it’s almost as though Qualtrics gets a do-over with $8 billion in its pocket for its trouble.
This week has brought with it two tasty pieces of IPO news — Rackspace’s return to the public markets and BigCommerce’s debut will be far more interesting now that we know what a first-draft valuation for each looks like.
But amidst the numbers is a question worth answering: why aren’t cloud-focused Rackspace and e-commerce-powering BigCommerce worth more?
Using a basic share count and the top end of their initial ranges, Rackspace is targeting a roughly $4.8 billion valuation, and BigCommerce a $1.3 billion price tag. Given that Rackspace had $652.7 million in Q1 2020 revenue and BigCommerce reaped $33.2 million in the same period, we have a puzzle on our hands.
Let me explain. At its IPO price, Rackspace is worth around 2x its current revenue run rate. For a company we associate with the cloud, that feels cheap at first glance. And BigCommerce is targeting a valuation of around a little under 10x its current annual run rate, which feels light compared to its competitor Shopify’s current price/sales ratio of of 66.4x (per YCharts data).
We did some maths to hammer away at what’s going on in each case. The mystery boils down to somewhat mundane margin and growth considerations. Let’s dive into the data, figure out what’s going on and ask ourselves if these companies aren’t heading for a second, higher IPO price range before they formally price and begin trading.
Let’s unpack Rackspace’s IPO pricing first and BigCommerce’s own set of numbers second.
While Rackspace has a public cloud component, its core business is service-driven, so it isn’t a major cloud platform that competes with Microsoft’s Azure, Google’s GCP or Amazon’s AWS. This isn’t a diss, mind, but a point of categorization.
The company has three reporting segments:
In a world with growing amounts of data, finding the right set for a particular machine learning model can be a challenge. Explorium has created a platform to make that an easier task, and today the startup announced a $31 million Series B.
The round was led by Zeev Venture with help from Dynamic Loop, Emerge and F2 capital. Today’s investment brings the total raised to $50 million, according to the company.
CEO and co-founder, Maor Shlomo says the company’s platform is designed to help people find the right data for their model. “The next frontier in analytics will not be about how you fine tune or improve a certain algorithm, it will be how do you find the right data to fit into those algorithms to make them as useful and impactful as possible,” he said.
He says that companies need this more than ever during the pandemic because this can help customers find more relevant data at a time when their historical data might not be useful to help build predictive models. For instance, if you’re a retailer, your historical shopping data won’t be relevant if you are in an area where you can no longer open your store, he says.
“There are so many environmental factors that are now influencing every business problem that organizations are trying to solve that Explorium is becoming this […] layer where you search for data to solve your business problems to fuel your predictive models,” he said.
When the pandemic hit in March, he worried about how it would affect his company, and he put a hold on hiring, but as he saw business increasing in April and May, he decided to accelerate again. The company currently has 87 employees between offices in Israel and the United States and he plans to be at 100 in the next couple of months.
When it comes to hiring, he says he doesn’t try to have hard and fast hiring rules like you have a certain degree or have gone to a certain school. “The only thing that’s important is getting good people hungry to succeed. The more diverse the culture is, the more diverse the group is, we find the more fun it is for people to discover each other and to discover different cultures,” Shlomo explained.
In terms of fundraising, the while the company needs money to fuel its growth, at the same time it still had plenty of money in the bank from last year’s round. “We got into the pandemic and we didn’t know how long it’s going to last, and [early on] we didn’t yet know how it would impact the business. Existing investors were always bullish about the company. We decided to just go with that,” he said.
The company was founded in 2017 and previously raised a $19.1 million Series A round last year.