Google has inked a deal with India’s third-largest telecom operator as the American giant looks to grow its cloud customer base in the key overseas market that is increasingly emerging as a new cloud battleground for AWS and Microsoft .
Google Cloud announced on Monday that the new partnership, effective starting today, enables Airtel to offer G Suite to small and medium-sized businesses as part of the telco’s ICT portfolio.
Airtel, which has amassed over 325 million subscribers in India, said it currently serves 2,500 large businesses and over 500,000 small and medium-sized businesses and startups in the country. The companies did not share details of their financial arrangement.
In a statement, Thomas Kurian, chief executive of Google Cloud, said, “the combination of G Suite’s collaboration and productivity tools with Airtel’s digital business offerings will help accelerate digital innovations for thousands of Indian businesses.”
The move follows Reliance Jio, India’s largest telecom operator, striking a similar deal with Microsoft to sell cloud services to small businesses. The two announced a 10-year partnership to “serve millions of customers.”
AWS, which leads the cloud market, interestingly does not maintain any similar deals with a telecom operator — though it did in the past. 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. According to a report by lobby group Nasscom, India’s cloud market is estimated to be worth more than $7 billion in three years.
Like in many other markets, Amazon, Microsoft, and Google are locked in an intense battle to win cloud customers in India. All of them offer near identical features and are often willing to pay out a potential client’s remainder credit to the rival to convince them to switch, industry executives have told TechCrunch.
Zendesk acquired Base CRM in 2018 to give customers a CRM component to go with its core customer service software. After purchasing the company, it changed the name to Sell, and today the company announced the launch of the new Sell Marketplace.
Officially called The Zendesk Marketplace for Sell, it’s a place where companies can share components that extend the capabilities of the core Sell product. Companies like MailChimp, HubSpot and QuickBooks are available at launch.
App directory in Sell Marketplace. Screenshot: Zendesk
Matt Price, SVP and general manager at Zendesk, sees the marketplace as a way to extend Sell into a platform play, something he thinks could be a “game changer.” He likened it to the impact of app stores on mobile phones.
“It’s that platform that accelerated and really suddenly [transformed smart phones] from being just a product to [launching an] industry. And that’s what the marketplace is doing now, taking Sell from being a really great sales tool to being able to handle anything that you want to throw at it because it’s extensible through apps,” Price explained.
Price says that this ability to extend the product could manifest in several ways. For starters, customers can build private apps with a new application development framework. This enables them to customize Sell for their particular environment, such as connecting to an internal system or building functionality that’s unique to them.
In addition, ISVs can build custom apps, something Price points out they have been doing for some time on the Zendesk customer support side. “Interestingly Zendesk obviously has a very large community of independent developers, hundreds of them, who are [developing apps for] our support product, and now we have another product that they can support,” he said.
Finally, industry partners can add connections to their software. For instance, by installing Dropbox for Sell, it gives sales people a way to save documents to Dropbox and associate them with a deal in Sell.
Of course, what Zendesk is doing here with Sell Marketplace isn’t new. Salesforce introduced this kind of app store concept to the CRM world in 2006 when it launched AppExchange, but the Sell Marketplace still gives Sell users a way to extend the product to meet their unique needs, and that could prove to be a powerful addition.
After appointing a new CEO and CFO last summer, cloud infrastructure provider DigitalOcean is embarking on a wider reorganisation: the startup has announced a round of layoffs, with potentially between 30 and 50 people affected.
DigitalOcean has confirmed the news with the following statement:
“DigitalOcean recently announced a restructuring to better align its teams to its go-forward growth strategy. As part of this restructuring, some roles were, unfortunately, eliminated. DigitalOcean continues to be a high-growth business with $275M in [annual recurring revenues] and more than 500,000 customers globally. Under this new organizational structure, we are positioned to accelerate profitable growth by continuing to serve developers and entrepreneurs around the world.”
Before the confirmation was sent to us this morning, a number of footprints began to emerge last night, when the layoffs first hit, with people on Twitter talking about it, some announcing that they are looking for new opportunities, and some offering help to those impacted. Inbound tips that we received estimate the cuts at between 30 and 50 people. With around 500 employees (an estimate on PitchBook) that would work out to up to 10% of staff affected.
It’s not clear what is going on here — we’ll update as and when we hear more — but when Yancey Spruill and Bill Sorenson were respectively appointed CEO and CFO in July 2019 (Spruill replacing someone who was only in the role for a year), the incoming CEO put out a short statement that, in hindsight, hinted at a refocus of the business in the near future.
“My aspiration is for us to continue to provide everything you love about DO now, but to also enhance our offerings in a way that is meaningful, strategic and most helpful for you over time,” he said at the time.
The company provides a range of cloud infrastructure services to developers, including scalable compute services (“Droplets” in DigitalOcean terminology), managed Kubernetes clusters, object storage, managed database services, Cloud Firewalls, Load Balancers and more, with 12 datacenters globally. It says it works with more than 1 million developers across 195 countries. It’s also been expanding the services that it offers to developers, including more enhancements in its managed database services, and a free hosting option for continuous code testing in partnership with GitLab.
All the same, as my colleague Frederic pointed out when DigitalOcean appointed its latest CEO, while developers have generally been happy with the company, it isn’t as hyped as it once was, and is a smallish player nowadays.
And in an area of business where economies of scale are essential for making good margins on a business, it competes against some of the biggest leviathans in tech: Google (and its Google Cloud Platform), Amazon (which as AWS) and Microsoft (with Azure). That could mean that DigitalOcean is either trimming down as it talks investors for a new round; or to better conserve cash as it sizes up how best to compete against these bigger, deep-pocketed players; or perhaps to start thinking about another kind of exit.
In that context, it’s notable that the company not only appointed a new CFO last summer, but also a CEO with prior CFO experience. It’s been a while since DigitalOcean has raised capital. According to PitchBook, DigitalOcean last raised money in 2017, an undisclosed amount from Mighty Capital, Glean Capital, Viaduct Ventures, Black River Ventures, Hanaco Venture Capital, Torch Capital and EG Capital Advisors. Before that, it took out $130 million in debt, in 2016. Altogether it has raised $198 million and its last valuation was from a round in 2015, $683 million.
We’ll update this post as we learn more. Best wishes to those affected by the news.
Epsagon, an Israeli startup that wants to help monitor modern development environments like serverless and containers, announced a $16 million Series A today.
U.S. Venture Partners (USVP), a new investor, led the round. Previous investors Lightspeed Venture Partners and StageOne Ventures also participated. Today’s investment brings the total raised to $20 million, according to the company.
CEO and co-founder Nitzan Shapira says that the company has been expanding its product offerings in the last year to cover not just its serverless roots, but also giving deeper insights into a number of forms of modern development.
“So we spoke around May when we launched our platform for microservices in the cloud products, and that includes containers, serverless and really any kind of workload to build microservices apps. Since then we have had a few several significant announcements,” Shapira told TechCrunch.
For starters, the company announced support or tracing and metrics for Kubernetes workloads including native Kubernetes along with managed Kubernetes services like AWS EKS and Google GKE. “A few months ago, we announced our Kubernetes integration. So, if you’re running any Kubernetes workload, you can integrate with Epsagon in one click, and from there you get all the metrics out of the box, then you can set up a tracing in a matter of minutes. So that opens up a very big number of use cases for us,” he said.
The company also announced support for AWS AppSync, a no-code programming tool on the Amazon cloud platform. “We are the only provider today to introduce tracing for AppSync and that’s [an area] where people really struggle with the monitoring and troubleshooting of it,” he said.
The company hopes to use the money from today’s investment to expand the product offering further with support for Microsoft Azure and Google Cloud Platform in the coming year. He also wants to expand the automation of some tasks that have to be manually configured today.
“Our intention is to make the product as automated as possible, so the user will get an amazing experience in a matter of minutes including advanced monitoring, identifying different problems and troubleshooting,” he said
Shapira says the company has around 25 employees today, and plans to double headcount in the next year.
Cyral, an early-stage startup that helps protect data stored in cloud repositories, announced an $11 million Series A today. The company also revealed a previous undisclosed $4.1 million angel investment, making the total $15.1 million.
The Series A was led by Redpoint Ventures. A.Capital Ventures, Costanoa VC, Firebolt, SV Angel and Trifecta Capital also participated in on the round.
Cyral co-founder and CEO Manav Mital says the company’s product acts as a security layer on top of cloud data repositories — whether databases, data lakes, data warehouse or other data repository — helping identify issues like faulty configurations or anomalous activity.
Mital says that unlike most security data products of this ilk, Cyral doesn’t use an agent or watch points to try to detect signals that indicate something is happening to the data. Instead, he says that Cyral is a security layer attached directly to the data.
“The core innovation of Cyral is to put a layer of visibility attached right to the data endpoint, right to the interface where application services and users talk to the data endpoint, and in real time see the communication,” Mital explained.
As an example, he says that Cyral could detect that someone has suddenly started scanning rows of credit card data, or that someone was trying to connect to a database on an unencrypted connection. In each of these cases, Cyral would detect the problem, and depending on the configuration, send an alert to the customer’s security team to deal with the problem, or automatically shut down access to the database before informing the security team.
It’s still early days for Cyral, with 15 employees and a handful of early access customers. Mital says for this round he’s working on building a product to market that’s well-designed and easy to use.
He says that people get the problem he’s trying to solve. “We could walk into any company and they are all worried about this problem. So for us getting people interested has not been an issue. We just want to make sure we build an amazing product,” he said.
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we’re continuing our exploration of companies that have reached material scale, usually viewed through the lens of annual recurring revenue (ARR). We’ve looked at companies that have reached the $100 million ARR mark and a few that haven’t quite yet, but are on the way.
Today, a special entry. We’re looking at a company that isn’t yet at the $100 million ARR mark. It’s 60% of the way there, but with a twist. The company is bootstrapped. Yep, from pre-life as a consultancy that built a product to fit its own needs, Cloudinary is cruising toward nine-figure recurring revenue and an IPO under its own steam.
Google Cloud today announced the launch of its premium support plans for enterprise and mission-critical needs. This new plan brings Google’s support offerings for the Google Cloud Platform (GCP) in line with its premium G Suite support options.
“Premium Support has been designed to better meet the needs of our customers running modern cloud technology,” writes Google’s VP of Cloud Support, Atul Nanda. “And we’ve made investments to improve the customer experience, with an updated support model that is proactive, unified, centered around the customer, and flexible to meet the differing needs of their businesses.”
The premium plan, which Google will charge for based on your monthly GCP spent (with a minimum cost of what looks to be about $12,500 per month), promises a 15-minute response time for P1 cases. Those are situations when an application or infrastructure is unusable in production. Other features include training and new product reviews, as well as support for troubleshooting third-party systems.
Google stresses that the team that will answer a company’s calls will consist of “content-aware experts” that know your application stack and architecture. Like with similar premium plans from other vendors, enterprises will have a Technical Account manager who works through these issues with them. Companies with global operations can opt to have (and pay for) technical account managers available during business hours in multiple regions.
The idea here, however, is also to give GCP users more proactive support, which will soon include a site reliability engineering engagement, for example, that is meant to help customers “design a wrapper of supportability around the Google Cloud customer projects that have the highest sensitivity to downtime.” The Support team will also work with customers to get them ready for special events like Black Friday or other peak events in their industry. Over time, the company plans to add more features and additional support plans.
As with virtually all of Google’s recent cloud moves, today’s announcement is part of the company’s efforts to get more enterprises to move to its cloud. Earlier this week, for example, it launched support for IBM’s Power Systems architecture, as well as new infrastructure solutions for retailers. In addition, it also acquired no-code service AppSheet.
Google announced today that it is buying AppSheet, an eight-year-old no-code mobile-application-building platform. The company had raised more than $17 million on a $60 million valuation, according to PitchBook data. The companies did not share the purchase price.
With AppSheet, Google gets a simple way for companies to build mobile apps without having to write a line of code. It works by pulling data from a spreadsheet, database or form, and using the field or column names as the basis for building an app.
It is integrated with Google Cloud already integrating with Google Sheets and Google Forms, but also works with other tools, including AWS DynamoDB, Salesforce, Office 365, Box and others. Google says it will continue to support these other platforms, even after the deal closes.
As Amit Zavery wrote in a blog post announcing the acquisition, it’s about giving everyone a chance to build mobile applications, even companies lacking traditional developer resources to build a mobile presence. “This acquisition helps enterprises empower millions of citizen developers to more easily create and extend applications without the need for professional coding skills,” he wrote.
In a story we hear repeatedly from startup founders, Praveen Seshadri, co-founder and CEO at AppSheet, sees an opportunity to expand his platform and market reach under Google in ways he couldn’t as an independent company.
“There is great potential to leverage and integrate more deeply with many of Google’s amazing assets like G Suite and Android to improve the functionality, scale, and performance of AppSheet. Moving forward, we expect to combine AppSheet’s core strengths with Google Cloud’s deep industry expertise in verticals like financial services, retail, and media and entertainment,” he wrote.
Google sees this acquisition as extending its development philosophy with no-code working alongside workflow automation, application integration and API management.
No code tools like AppSheet are not going to replace sophisticated development environments, but they will give companies that might not otherwise have a mobile app the ability to put something decent out there.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.
VMware is closing the year with a significant new weapon in its arsenal. (I restrained myself from using a “pivotal” pun here. You’re welcome.)
The acquisition — first announced in August — helps the company in its transformation from a pure virtual machine supplier into a cloud native vendor that can manage infrastructure wherever it lives. It fits alongside the acquisitions of Heptio and Bitnami, two other deals that closed this year.
The company told us that starting early next year, it will stop selling political ads: “At this point in time, we do not yet have the necessary level of robustness in our processes, systems and tools to responsibly validate and review this content.”
The last episode of the first season of “The Mandalorian” went live on Disney+ on Friday, and showrunner Jon Favreau wasted very little time confirming when we can expect season two of the smash hit to land: next fall.
The last 12 months served as a grande finale to 10 years that saw triple-digit increases in startup formation and VC on the continent. Here’s an overview of the 2019 market events that capped off a decade in African tech.
Maxar’s goal in selling the business is to help alleviate some of its considerable debt. The purchasing entity is a consortium of companies led by private investment firm Northern Private Capital, which will acquire the entirety of MDA’s Canadian operations — responsible for the development of the Canadarm and Canadarm2 robotic manipulators used on the Space Shuttle and the International Space Station, respectively.
Lucas Matney argues that as is so often the case with the next big thing in tech, cloud streaming is much more likely to become the next big feature of a more traditional platform, rather than the entire platform itself. (Extra Crunch membership required.)
Equity took the week off, but we kept Original Content going with a review of Netflix’s new fantasy show “The Witcher.”
The acquisition gives VMware another component in its march to transform from a pure virtual machine company into a cloud native vendor that can manage infrastructure wherever it lives. It fits alongside other recent deals like buying Heptio and Bitnami, two other deals that closed this year.
They hope this all fits neatly into VMware Tanzu, which is designed to bring Kubernetes containers and VMware virtual machines together in a single management platform.
“VMware Tanzu is built upon our recognized infrastructure products and further expanded with the technologies that Pivotal, Heptio, Bitnami and many other VMware teams bring to this new portfolio of products and services,” Ray O’Farrell, executive vice president and general manager of the Modern Application Platforms Business Unit at VMware, wrote in a blog post announcing the deal had closed.
Craig McLuckie, who came over in the Heptio deal, and is now VP of R&D at VMware, told TechCrunch in November at KubeCon, that while the deal hadn’t closed at that point, he saw a future where Pivotal could help at a professional services level, as well.
“In the future when Pivotal is a part of this story, they won’t be just delivering technology, but also deep expertise to support application transformation initiatives,” he said.
Up until the closing, the company had been publicly traded on the New York Stock Exchange, but as of today Pivotal becomes a wholly-owned subsidiary of VMware. It’s important to note that this transaction didn’t happen in a vacuum where two random companies came together.
In fact, VMware and Pivotal were part of the consortium of companies that Dell purchased when it acquired EMC in 2015 for $67 billion. While both were part of EMC and then Dell, each one operated separately and independently. At the time of the sale to Dell, Pivotal was considered a key piece, one that could stand strongly on its own.
Pivotal and VMware had another strong connection. Pivotal was originally created by a combination of EMC, VMware and GE (which owned a 10% stake for a time) to give these large organizations a separate company to undertake transformation initiatives.
The future looked bright at that point, but life as a public company was rough and after a catastrophic June earnings report, things began to fall apart. The stock dropped 42 percent in one day. As I wrote in an analysis of the deal:
The stock price plunged from a high of $21.44 on May 30th to a low of $8.30 on August 14th. The company’s market cap plunged in that same time period falling from $5.828 billion on May 30th to $2.257 billion on August 14th. That’s when VMware admitted it was thinking about buying the struggling company.
VMware came to the rescue and offered $15.00 a share, a substantial premium above that August low point. As of today, it’s part of VMware.
Salesforce turned 20 this year, and the most successful pure enterprise SaaS company ever showed no signs of slowing down. Consider that the company finished the year on an $18 billion run rate, rushing toward its 2022 revenue goal of $20 billion. Oh, and it also spent a tidy $15.7 billion to buy Tableau this year in the most high-profile and expensive acquisition it’s ever made.
Co-founder, chairman and CEO Marc Benioff published a book called Trailblazer about running a socially responsible company, and made the rounds promoting it. In fact, he even stopped by TechCrunch Disrupt in San Francisco in September, telling the audience that capitalism as we know it is dead. Still, the company announced it was building two more towers in Sydney and Dublin.
It also promoted Bret Taylor just last week, who could be in line as heir apparent to Benioff and co-CEO Keith Block whenever they decide to retire. The company closed the year with a bang with a $4.5 billion quarter. Salesforce, for the most part, has somehow been able to balance Benioff’s vision of responsible capitalism while building a company makes money in bunches, one that continues to grow and flourish, and that’s showing no signs of slowing down anytime soon.
The company just keeps churning out good quarters. Here’s what this year looked like:
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today, something short. Continuing our loose collection of looks back of the past year, it’s worth remembering two related facts. First, that this time last year SaaS stocks were getting beat up. And, second, that in the ensuing year they’ve risen mightily.
If you are in a hurry, the gist of our point is that the recovery in value of SaaS stocks probably made a number of 2019 IPOs possible. And, given that SaaS shares have recovered well as a group, that the 2020 IPO season should be active as all heck, provided that things don’t change.
Let’s not forget how slack the public markets were a year ago for a startup category vital to venture capital returns.
We’re depending on Bessemer’s cloud index today, renamed the “BVP Nasdaq Emerging Cloud Index” when it was rebuilt in October. The Cloud Index is a collection of SaaS and cloud companies that are trackable as a unit, helping provide good data on the value of modern software and tooling concerns.
If the index rises, it’s generally good news for startups as it implies that investors are bidding up the value of SaaS companies as they grow; if the index falls, it implies that revenue multiples are contracting amongst the public comps of SaaS startups.*
Ultimately, startups want public companies that look like them (comps) to have sky-high revenue multiples (price/sales multiples, basically). That helps startups argue for a better valuation during their next round; or it helps them defend their current valuation as they grow.
Given that it’s Christmas Eve, I’m going to present you with a somewhat ugly chart. Today I can do no better. Please excuse the annotation fidelity as well:
Yesterday, Adobe submitted its quarterly earnings report and the results were quite good. The company generated a tad under $3 billion for the quarter at $2.99 billion, and reported that revenue exceeded $11 billion for FY 2019, its highest ever mark.
“Fiscal 2019 was a phenomenal year for Adobe as we exceeded $11 billion in revenue, a significant milestone for the company. Our record revenue and EPS performance in 2019 makes us one of the largest, most diversified, and profitable software companies in the world. Total Adobe revenue was $11.17 billion in FY 2019, which represents 24% annual growth,” Adobe CEO Shantanu Narayen told analysts and reporters in his company’s post-earnings call.
Adobe made a couple of key M&A moves this year that appear to be paying off, including nabbing Magento in May for $1.7 billion and Marketo in September for $4.75 billion. Both companies fit inside its “Digital Experience” revenue bucket. In its most recent quarter, Adobe’s Digital Experience segment generated $859 million in revenue, compared with $821 million in the sequentially previous quarter.
Obviously buying two significant companies this year helped push those numbers, something CFO John Murphy acknowledged in the call:
“Key Q4 highlights include strong year-over-year growth in our Content and Commerce solutions led by Adobe Experience Manager and success with cross-selling and up-selling Magento; Adoption of Adobe Experience Platform, Audience Manager and Real-Time CDP in our Data & Insights solutions; and momentum in our Marketo business, including in the mid-market segment, which helped fuel growth in our Customer Journey Management solutions.”
All of that added up to growth across the Digital Experience category.
But Adobe didn’t simply buy its way to new market share. The company also continued to build a suite of products in-house to help grow new revenue from the enterprise side of its business.
“We’re rapidly evolving our CXM product strategy to deliver generational technology platforms, launch innovative new services and introduce enhancements to our market-leading applications. Adobe Experience Platform is the industry’s first purpose-built CXM platform. With real-time customer profiles, continuous intelligence, and an open and extensible architecture, Adobe Experience Platform makes delivering personalized customer experiences at scale a reality,” Narayan said.
Of course, the enterprise is just part of it. Adobe’s creative tools remain its bread and butter with the Creative tools accounting for $1.74 billion in revenue and Document Cloud adding another $339 million this quarter.
The company is talking confidently about 2020, as its recent acquisitions mature and become a bigger part of the company’s digital experience offerings. But Narayan feels good about the performance this year in digital experience: “When I take a step back and look at what’s happened during the year, I feel really good about the amount of innovation that’s happening. And the second thing I feel really good about is the alignment across Magento, Marketo and just call it, the core DX business in terms of having a more unified and aligned go-to-market, which has not only helped our results, but it’s also helped the operating expense associated with that business,” he said.
It is no small feat for any software company to surpass $11 billion in trailing revenue. Consider that Adobe, which was founded in 1982, goes back to the earliest days of desktop PC software in the 1980s. Yet it has managed to transform into a massive cloud services company over the last five years under Narayan’s leadership and flourish there.
Salesforce announced today that it has named Bret Taylor as president and chief operating officer of the company. Prior to today’s promotion, Taylor held the position of president and chief product officer.
In his new position, Taylor will be responsible for a number of activities including leading Salesforce’s global product vision, engineering, security, marketing and communications. That’s a big job, and as such he will report directly to chairman Marc Benioff.
Taylor has had increasing responsibilities over the last couple of years, taking the lead on many of Salesforce’s biggest announcements at Dreamforce, the company’s massive yearly customer conference. In fact, Benioff said in a statement that Taylor has already been responsible for product vision, development and go-to-market strategy prior to today’s promotion.
“His expanded portfolio of responsibilities will enable us to drive even greater customer success and innovation as we experience rapid growth at scale,” Benioff said in the statement.
Brent Leary, founder at CRM Essentials, who has been watching the company since its earliest days, says it feels like this could be part of succession plan down the road. This promotion could be a signal that Taylor is being groomed to take over for Benioff and co-CEO Keith Block whenever they decide to move on.
“It’s been feeling like he’s being groomed for the big chair somewhere down the line. He’s a generation behind the current leadership, but his experiences at startups and creating iconic technologies at iconic companies uniquely positioned him for a move like this at a company like Salesforce,” Leary told TechCrunch.
Taylor came to Salesforce when the company purchased Quip in August 2016 for $750 million. He was promoted to president and chief product officer in November 2017. Prior to launching Quip he was chief technology officer at Facebook.
Google Cloud today announced Transfer Service, a new service for enterprises that want to move their data from on-premise systems to the count. This new managed service is meant for large-scale transfers on the scale of billions of files and petabytes of data. It complements similar services from Google that allow you to ship data to its data centers via a hardware appliance and FedEx or to automate data transfers from SaaS applications to Google’s BigQuery service.
Transfer Service handles all of the hard work of validating your data’s integrity as it moves to the cloud. The agent automatically handles failures and use as much available bandwidth as it can to reduce transfer times.
To do this, all you have to do is install an agent on your on-premises servers, select the directories you want to copy and let the service do its job. You can then monitor and manage your transfer jobs from the Google Cloud console.
The obvious use case for this is archiving and disaster recovery. But Google is also targeting this at companies that are looking to lift and shift workloads (and their attached data), as well as analytics and machine learning use cases.
As with most of Google Cloud’s recent product launches, the focus here is squarely on enterprise customers. Google wants to make it easier for them to move their workloads to its cloud and for most workloads, that also involves moving lots of data as well.
Atlassian has a portfolio of developer tools like Bitbucket, Jira and Confluence. It also has a marketplace with hundreds of add-ons, but what it lacked was a development platform to call its own. Today, that changed when the company announced the Forge platform.
“Forge will empower developers to more easily build and run enterprise-ready cloud apps that integrate with Atlassian products,” the company wrote in a blog post announcing the new tools.
The platform consists of three main components. For starters, it’s providing a serverless Function as a Service (FaaS) for developers to build hosted applications on Forge without worrying about the underlying infrastructure resources required to run the applications. The tool is actually built on AWS Lambda, AWS’s FaaS.
This should allow more developers to get involved because it strips away a layer of complexity around managing infrastructure. “A FaaS platform also lets us eliminate common pain points such as authentication, identity, scaling and tenancy,” the company wrote in the blog post.
The tool kit also includes a UI component called Forge UI for building user interfaces on the web or devices. Forge UI uses a declarative language that should make it easier to build user interfaces, and as with the function layer, the idea here is to simplify the process for users. Atlassian will deal with all of the security involved in building a user interface, something that many developers struggle with.
“By abstracting away the process of rendering the UI layer, Forge makes stronger guarantees about how apps present or transmit sensitive data, such as user-generated content and personally identifying information,” the company wrote.
The final piece is a command line interface (CLI) called Forge CLI. The idea here is to build continuous delivery pipelines with Bitbucket and run them from the command line. If you put all three of these components together, you have a pretty comprehensive development environment with tools for building functionality and designing user interfaces, while managing operations from a command line.
There are lots of platform service offerings out there, so Atlassian faces some competition here, but for developers who planned on building apps for the Atlassian marketplace, this set of tools could prove useful and help push more developers to join in.
Hello and welcome back to our regular morning look at private companies, public markets and the grey space in between.
This morning we’re digging into the current IPO market, asking ourselves how much damage WeWork really did to other companies hoping to go public. Is the IPO window closed, and if not, what sort of companies can still get out?
There’s some good news out today for late-stage startups looking to debut — along with a few impending tests regarding the market’s appetite for risk that we should understand as we head into 2020.
In terms of IPOs, Bill.com’s felt comfortably standard for 2019. Bill.com was a heavily venture-backed company that had raised just under $350 million while private across myriad rounds, and by the time it wanted to go public it still lost money.
At the same time, the company had a number of strengths. These include historically slim losses as a percent of revenue ($7.3 million in its most recent fiscal year, against $78.4 million in revenue), differentiated revenue sources (subscription income and rising interest payments), and improving gross margins (74 percent in its most recent quarter, up from a little under 72 percent in the year-ago period).
Those factors combined were sufficient to entice investors to price the company’s IPO far above its initial expectations of $16 to $18 per share. Instead, Bill.com raised its range once and then priced above the higher interval. At $22 per share, the company’s value rose by about 60% compared to its most recent private financing. (You can read more on the debut here.)
This matters as WeWork was said to have closed the IPO window for companies more focused on growth than profits. The way the market reality was discussed in venture circles seemed to indicate that WeWork’s implosion had slashed investor interest in growth, with public market players now favoring profits, or something close.
Bill.com’s most recent three-month period featured far-larger losses than its year-ago quarter, which mattered little in the end. The firm’s solid growth and moderate losses, it seems, were more than enough to secure a strong welcome to the public markets.
You may be wondering why we just spent so much time explaining why a healthy company managed to go public. The goal, simply, was to point out that not only can companies still losing money and burning cash go public, they may even get a strong reception.
But what about companies in slightly less good shape? What does Bill.com’s IPO pricing indicate for Sprout Social, a company of similar size that’s going public this week which is also unprofitable, but growing more slowly (29.5% year-over-year in Q3 2019, compared to Bill.com’s 57%)?
Its pricing and debut will be a more interesting test. And luckily for us, it should price its shares this evening. (Even more fun, it targeted the same $16 to $18 per-share initial IPO price range that Bill.com initially had in its own sights.)
If Sprout Social manages to price in-range, we’ll have another data point in favor of the IPO window being comfortably open. It’s not surprising that Bill.com’s IPO priced well, but Sprout Social’s slower growth rate likely make its losses less palatable; if it can debut all the same we’ll know that the band of venture-backed companies that can public post-WeWork in the dead of December is wide.
That’s good news for illiquid unicorns and their backers, provided that their companies are at least as healthy as Chicago’s Sprout.
Finally, we have one more test of the IPO market ahead of us.
China-based Ucommune is a co-working company with self-described “global impact and ambitions.” Claiming to be the “largest co-working space community in China,” Ucommune espouses “sharing, innovation, responsibility and success for all.” In its F-1 document, filed yesterday and setting in motion a possible US-listed IPO, Ucommune details comical levels of unprofitability and growth.
If all that sounds familiar, it should. It should feel similar to WeWork, which makes the timing of Ucommune’s IPO filing all the more amazing. WeWork’s pulled IPO was minutes ago, and here we are, staring down the filing of yet another coworking IPO?
The situation gets even better. Observe the following results:
Business-to-business payments company Bill.com priced its IPO today at an above-range $22 per share. The firm, selling 9.82 million shares in its offering, will raise around $216 million at a roughly $1.6 billion valuation.
The company’s IPO pricing comes during a modestly uncertain time for unprofitable companies looking to go public. Following the WeWork IPO mess, concerns arose that growth-oriented companies might struggle to drum up investor interest when going public.
Bill.com’s offering makes it plain that not all loss-making companies are equal; the firm’s pricing journey indicates that its growth story resonated more with investors than concerns relating to its losses. The company had targeted a $16 to $18 per-share IPO price range. However, that range was raised to $19 to $21 per share yesterday, ahead of pricing.
To understand what the Bill.com IPO means for startups, let’s remind ourselves of how much capital it raised while private itself, and how it performed financially.
Bill.com raised $347.1 million while private across a host of Series and venture rounds, including $100 million in 2017 and $88 million in 2018. The Palo Alto-based company raised from Franklin Templeton, JP Morgan and Temasek during its late-stage private life. When it was younger, Bill.com raised capital from Emergence, DCM, Icon Ventures, Financial Partners Fund and Scale Venture Partners, among others.
The company was valued, according to Crunchbase data, at precisely $1 billion on a post-money valuation following its 2018 investment. This makes its IPO a comfortably up transaction, adding value to even Bill.com’s most recently added private investors.
Heading into its IPO, Bill.com posted both growing revenue and growing losses:
The firm’s net loss growth looks worse than it really is, given that it lost less than $1 million in its year-ago Q3; but investors looking for a path to profits may not have appreciated the direction or pace of its net results, regardless of how small a base they were calculated from.
An above-range pricing on a company that raised its pricing interval while losing more money than it did a year ago should allay concerns among private companies that the IPO window is closed. It is not, provided that your losses are slim as a percent of revenue and your growth is solid.
A year ago, we asked some of the most prominent smart home device makers if they have given customer data to governments. The results were mixed.
The big three smart home device makers — Amazon, Facebook and Google (which includes Nest) — all disclosed in their transparency reports if and when governments demand customer data. Apple said it didn’t need a report, as the data it collects was anonymized.
As for the rest, none had published their government data-demand figures.
In the year that’s past, the smart home market has grown rapidly, but the remaining device makers have made little to no progress on disclosing their figures. And in some cases, it got worse.
Smart home and other internet-connected devices may be convenient and accessible, but they collect vast amounts of information on you and your home. Smart locks know when someone enters your house, and smart doorbells can capture their face. Smart TVs know which programs you watch and some smart speakers know what you’re interested in. Many smart devices collect data when they’re not in use — and some collect data points you may not even think about, like your wireless network information, for example — and send them back to the manufacturers, ostensibly to make the gadgets — and your home — smarter.
Because the data is stored in the cloud by the devices manufacturers, law enforcement and government agencies can demand those companies turn over that data to solve crimes.
But as the amount of data collection increases, companies are not being transparent about the data demands they receive. All we have are anecdotal reports — and there are plenty: Police obtained Amazon Echo data to help solve a murder; Fitbit turned over data that was used to charge a man with murder; Samsung helped catch a sex predator who watched child abuse imagery; Nest gave up surveillance footage to help jail gang members; and recent reporting on Amazon-owned Ring shows close links between the smart home device maker and law enforcement.
Here’s what we found.
Smart lock and doorbell maker August gave the exact same statement as last year, that it “does not currently have a transparency report and we have never received any National Security Letters or orders for user content or non-content information under the Foreign Intelligence Surveillance Act (FISA).” But August spokesperson Stephanie Ng would not comment on the number of non-national security requests — subpoenas, warrants and court orders — that the company has received, only that it complies with “all laws” when it receives a legal demand.
Roomba maker iRobot said, as it did last year, that it has “not received” any government demands for data. “iRobot does not plan to issue a transparency report at this time,” but it may consider publishing a report “should iRobot receive a government request for customer data.”
Arlo, a former Netgear smart home division that spun out in 2018, did not respond to a request for comment. Netgear, which still has some smart home technology, said it does “not publicly disclose a transparency report.”
Amazon-owned Ring, whose cooperation with law enforcement has drawn ire from lawmakers and faced questions over its ability to protect users’ privacy, said last year it planned to release a transparency report in the future, but did not say when. This time around, Ring spokesperson Yassi Shahmiri would not comment and stopped responding to repeated follow-up emails.
Honeywell spokesperson Megan McGovern would not comment and referred questions to Resideo, the smart home division Honeywell spun out a year ago. Resideo’s Bruce Anderson did not comment.
And just as last year, Samsung, a maker of smart devices and internet-connected televisions and other appliances, also did not respond to a request for comment.
On the whole, the companies’ responses were largely the same as last year.
But smart switch and sensor maker Ecobee, which last year promised to publish a transparency report “at the end of 2018” did not follow through with its promise. When we asked why, Ecobee spokesperson Kristen Johnson did not respond to repeated requests for comment.
Based on the best available data, August, iRobot, Ring and the rest of the smart home device makers have hundreds of millions of users and customers around the world, with the potential to give governments vast troves of data — and users and customers are none the wiser.
Transparency reports may not be perfect, and some are less transparent than others. But if big companies — even after bruising headlines and claims of co-operation with surveillance states — disclose their figures, there’s little excuse for the smaller companies.
This time around, some companies fared better than their rivals. But for anyone mindful of their privacy, you can — and should — expect better.
Google Cloud today announced the launch of its new E2 family of compute instances. These new instances, which are meant for general purpose workloads, offer a significant cost benefit, with saving of around 31 percent compared to the current N1 general purpose instances.
The E2 family runs on standard Intel and AMD chips, but as Google notes, they also use a custom CPU scheduler “that dynamically maps virtual CPU and memory to physical CPU and memory to maximize utilization.” In addition, the new system is also smarter about where it places VMs, with the added flexibility to move them to other hosts as necessary. To achieve all of this, Google built a custom CPU scheduler “ with significantly better latency guarantees and co-scheduling behavior than Linux’s default scheduler.” The new scheduler promises sub-microsecond wake-up latencies and faster context switching.
That gives Google efficiency gains that it then passes on to users in the form of these savings. Chances are, we will see similar updates to Google’s other instances families over time.
Its interesting to note that Google is clearly willing to put this offering against that of its competitors. “Unlike comparable options from other cloud providers, E2 VMs can sustain high CPU load without artificial throttling or complicated pricing,” the company writes in today’s announcement. “This performance is the result of years of investment in the Compute Engine virtualization stack and dynamic resource management capabilities.” It’ll be interesting to see some benchmarks that pit the E2 family against similar offerings from AWS and Azure.
As usual, Google offers a set of predefined instance configurations, ranging from 2 vCPUs with 8 GB of memory to 16 vCPUs and 128 GB of memory. For very small workloads, Google Cloud is also launching a set of E2-based instances that are similar to the existing f1-micro and g1-small machine types. These feature 2 vCPUs, 1 to 4 GB of RAM and a baseline CPU performance that ranges from the equivalent of 0.125 vCPUs to 0.5 vCPUs.