At first, this may sound like an odd acquisition. Rackspace is still best known for its hosting and managed cloud and infrastructure services, after all, and RelationEdge is all about helping businesses manage their Salesforce SaaS implementations. The company clearly wants to expand its portfolio, though, and add managed services for SaaS applications to its lineup. It made the first step in this direction with the acquisition of TriCore last year, another company in the enterprise application management space. Today’s acquisition builds upon this theme.
Gerard Brossard, the executive VP and general manager of Rackspace Application Services, told me that the company is still in the early days of its application management practice, but that it’s seeing good momentum as it’s gaining both new customers thanks to these offerings and as existing customers look to Rackspace for managing more than their infrastructure. “This allows us to jump into that SaaS management practice, starting with the leaders in the market,” he told me.
Why sell RelationEdge, a company that has gained some good traction and now has about 125 employees? “At the end of the day, we’ve accomplished a tremendous amount organically with very little funding,” RelationEdge founder and CEO Matt Stoyka told me. “But there is a huge opportunity in the space that we can take advantage of. But to do that, we needed more than was available to us, but we needed to find the right home for our people and our company.” He also noted that the two companies seem to have a similar culture and mission, which focuses more on the business outcomes than the technology itself.
For the time being, the RelationEdge brand will remain and Rackspace plans to run the business “with considerable independence under its current leadership.” Brossard noted that the reason for this is RelationEdge’s existing brand recognition.
Increasingly we are going to be having bots conducting business on a company’s behalf. As that happens, it is going to require a trust mechanism to ensure that bot-to-bot communication is legitimate. BotChain, a new startup out of Boston wants to be the blockchain for registering bots.
The new blockchain, which is built on Ethereum, is designed to register and identify bots and provide a way for companies to collaborate between bots with auditing capabilities built in. BotChain has the potential to become a standard way of sharing data between bots in a trusted way.
The idea is to have an official and sanctioned place for companies to register their bots securely. As the organization describes it, “BotChain offers bot developers, enterprises, software companies, and system integrators the critical systems, standards, and means to validate, certify, and manage the millions of bots and billions of transactions powered by AI.
The company was created by the team at Talla, a bot startup in Cambridge, but the goal is to open this up to much larger community of partners and expand. In fact, early partners include Gupshup, a platform for developers and Howdy.ai, B2B enterprise bot developers along with Polly, CareerLark, Disco (formerly Growbot), Zoom.ai, and Botkeeper.
BotChain is the brainchild of Rob May, who is CEO at Talla. He was formerly co-founder and CEO at Backupify, which was sold to Datto in 2014. He recognized that as bot usage increases, there needed to be a system in place to help companies using bots to exchange information, and eventually even digital currencies to complete transactions in a fully digital context.
May believes that blockchain is the best solution to build this trust mechanism because of the ledger’s nature as an immutable and irrefutable record. If the entities on the blockchain agree to work with one another, and the other members allow it, there should be an element of confidence inherent in that.
He points to other advantages such as being decentralized so that no single company can control the data on the blockchain, and of course nobody can erase a record once it’s been written to the chain. It also provides a way for bots to identify one another in an official way and for participating companies to track transactions between bots.
Talla opened this up to a community of users because it wants BotChain to be a standard way for bots to exchange information. Whether that happens or not remains to be seen, but these types of projects could be important building blocks as companies look for ways to conduct business confidently, even when there are no humans involved.
BotChain has raised $ 5 million USD in a private token sale to institutional investors such as Galaxy Digital, Pillar, Glasswing and Avalon, according to the company.
In addition, they will be conducting another token pre-sale starting this Friday to raise additional funds from community stakeholders. “This token sale is a way to give [our community] access. Purchasing these tokens allows users to start registering their assets and create chains of immutable records of what their machines have done,” May explained. He said the company expects to raise $ 20 million this year from stakeholder token sales.
You can learn more about Botchain from this video:
Ever since Google created Kubernetes as an open source container orchestration tool, it has seen it blossom in ways it might never have imagined. As the project gains in popularity, we are seeing many adjunct programs develop. Today, Google announced the release of version 0.1 of the Kubeflow open source tool, which is designed to bring machine learning to Kubernetes containers.
While Google has long since moved Kubernetes into the Cloud Native Computing Foundation, it continues to be actively involved, and Kubeflow is one manifestation of that. The project was only first announced at the end of last year at Kubecon in Austin, but it is beginning to gain some momentum.
David Aronchick, who runs Kubeflow for Google, led the Kubernetes team for 2.5 years before moving to Kubeflow. He says the idea behind the project is to enable data scientists to take advantage of running machine learning jobs on Kubernetes clusters. Kubeflow lets machine learning teams take existing jobs and simply attach them to a cluster without a lot of adapting.
With today’s announcement, the project begins to move ahead, and according to a blog post announcing the milestone, brings a new level of stability, while adding a slew of new features that the community has been requesting. These include Jupyter Hub for collaborative and interactive training on machine learning jobs and Tensorflow training and hosting support, among other elements.
Aronchick emphasizes that as an open source project you can bring whatever tools you like, and you are not limited to Tensorflow, despite the fact that this early version release does include support for Google’s machine learning tools. You can expect additional tool support as the project develops further.
In just over 4 months since the original announcement, the community has grown quickly with over 70 contributors, over 20 contributing organizations along with over 700 commits in 15 repositories. You can expect the next version, 0.2, sometime this summer.
It’s tough being part of IT Ops these days. Your company could be operating across public and private clouds, and in many cases, an internal datacenter too. Meanwhile your developers are generating more code ever faster. ScienceLogic wants to help with it latest release, ScienceLogic SL1.
As company CEO Dave Link sees, we are seeing this vast confluence of technology influences coming together very quickly. He says the goal with this release is nothing less than a comprehensive, full-stack view of how an application is behaving, and how the different pieces that make up and connect to that application could be affecting its performance.
“Every CIO wants to know the health of their mission critical business services and only way to see that is to see through the entire stack,” Link said.
Part of the problem of course is the sheer volume of information. As that increases, it becomes nearly impossible for humans, even the most highly skilled among us, to keep up and understand what particular element may be causing an application to misbehave. That problem is exacerbated further by the speed at which developers are generating new code.
Murali Nemani, CMO at ScienceLogic, says that’s where artificial intelligence and machine learning come into play. “Part of the problem is that if businesses are moving at machine speed in terms of their capability to innovate, the big challenge is how do you get operations to keep up with what developers are creating,” Nemani asked.
The machine learning aspect of the platform enables companies to begin automating solutions for some of the more common problems, while directing the more unusual ones to humans on the operations team. They rely on the AI tools produced by others, rather than trying to develop that part of the solution themselves. “If an application is performing poorly, we can diagnose which part is the problem child, then feed this information to AI/ML engines like Google TensorFlow or IBM Watson and see pattern recognition. That’s the way we achieve machine speed,” Nemani explained.
Link says they do this by looking at the problem holistically and giving operations a full view of the application to track down the problem behavior and fix it. “We look at all the layers when we think of a service view: security, systems, network, OS, infrastructure then the application layer (database and application tier). We then contextualize all of those elements into one service view, so [the customer has] the most efficient view of what’s happening in real time,” Link said.
The product being announced publicly today has been early Beta up to now and will be generally available on July 25th.
DocuSign CEO Dan Springer was all smiles at the Nasdaq on Friday, following the company’s public debut.
And he had a lot to be happy about. After pricing the IPO at a better-than-expected $ 29, the company raised $ 629 million. Then DocuSign finished its first day of trading at $ 39.73, up 37% in its debut.
Springer, who took over DocuSign just last year, spoke with TechCrunch in a video interview about the direction of the company. “We’ve figured out a way to help businesses really transform the way they operate,” he said about document-signing business. The goal is to “make their life more simple.”
But when asked about the competitive landscape which includes Adobe Sign and HelloSign, Springer was confident that DocuSign is well-positioned to remain the market leader. “We’re becoming a verb,” he said. Springer believes that DocuSign has convinced large enterprises that it is the most secure platform.
Yet the IPO was a long-time coming. The company was formed in 2003 and raised over $ 500 million over the years from Sigma Partners, Ignition Partners, Frazier Technology Partners, Bain Capital Ventures and Kleiner Perkins, amongst others. It is not uncommon for a venture-backed company to take a decade to go public, but 15 years is atypical, for those that ever reach this coveted milestone.
Dell Technologies Capital president Scott Darling, who sits on the board of DocuSign, said that now was the time to go public because he believes the company “is well positioned to continue aggressively pursuing the $ 25 billion e-signature market and further revolutionizing how business agreements are handled in the digital age.”
Sales are growing, but it is not yet profitable. DocuSign brought in $ 518.5 million in revenue for its fiscal year ending in 2018. This is an increase from $ 381.5 million last year and $ 250.5 million the year before. Losses for this year were $ 52.3 million, reduced from $ 115.4 million last year and, $ 122.6 million for 2016.
Springer says DocuSign won’t be in the red for much longer. The company is “on that fantastic path to GAAP profitability.” He believes that international expansion is a big opportunity for growth.
Etleap is a play on words for a common set of data practices: extract, transform and load. The startup is trying to place these activities in a modern context, automating what they can and in general speeding up what has been a tedious and highly technical practice. Today, they announced a $ 1.5 million seed round.
Investors include First Round Capital, SV Angel, Liquid2, BoxGroup and other unnamed investors. The startup launched five years ago as a Y Combinator company. It spent a good 2.5 years building out the product says CEO and founder Christian Romming. They haven’t required additional funding up until now because they have been working with actual customers. Those include Okta, PagerDuty and Mode among others.
Romming started out at ad tech startup VigLink and while there he encounter a problem that was hard to solve. “Our analysts and scientists were frustrated. Integration of the data sources wasn’t always a priority and when something broke, they couldn’t get it fixed until a developer looked at it.” That lack of control slowed things down and made it hard to keep the data warehouse up-to-date.
He saw an opportunity in solving that problem and started Etleap. While there were (and continue to be) legacy solutions like Informatica, Talend and Microsoft SQL Server Integration Services, he said when he studied these at a deeply technical level, he found they required a great deal of help to implement. He wanted to simplify ETL as much as possible, putting data integration into the hands of much less technical end users, rather than relying on IT and consultants.
One of the problems with traditional ETL is that the data analysts who make use of the data tend to get involved very late after the tools have already been chosen and Romming says his company wants to change that. “They get to consume whatever IT has created for them. You end up with a bread line where analysts are at the mercy of IT to get their jobs done. That’s one of the things we are trying to solve. We don’t think there should be any engineering at all to set up ETL pipeline,” he said.
Etleap is delivered as managed SaaS or you can run it within your company’s AWS accounts. Regardless of the method, it handles all of the managing, monitoring and operations for the customer.
Romming emphasizes that the product is really built for cloud data warehouses. For now, they are concentrating on the AWS ecosystem, but have plans to expand beyond that down the road. “We want help more enterprise companies make better use of their data, while modernizing data warehousing infrastructure and making use of cloud data warehouses,” he explained.
The company is currently has 15 employees, but Romming plans to at least double that in the next 12-18 months, mostly increasing the engineering team to help further build out the product and create more connectors.
Stock market investors showed lukewarm enthusiasm for Pivotal Software’s debut on Friday. After pricing the IPO at $ 15, the company closed the day at $ 15.73.
The enterprise cloud computing company has been majority-owned by Dell, which came about after its merger with EMC in 2016. It was spun off from Dell, EMC and VMware in April 2013.
After that, it raised $ 1.7 billion in funding from Microsoft, Ford and General Electric.
Here’s how it describes its business in the S-1 filing:
Pivotal looks to “provide a leading cloud-native platform that makes software development and IT operations a strategic advantage for our customers. Our cloud-native platform, Pivotal Cloud Foundry (‘PCF’), accelerates and streamlines software development by reducing the complexity of building, deploying and operating new cloud-native applications and modernizing legacy applications.”
According to the filing, Pivotal brought in $ 509.4 million in revenue for its fiscal year ending in February. This is up from $ 416.3 million in revenue for 2017 and $ 280.9 million in revenue the year before.
The company is still losing a lot of money, however. Losses for fiscal 2018 stood at $ 163.5 million, improved from the than the negative $ 232.5 million seen in 2017 and $ 282.5 million in 2016.
“We have incurred substantial losses and may not be able to generate sufficient revenue to achieve and sustain profitability,” the company warned in the requisite “risk factors” section of its IPO filing.
Pivotal also acknowledged that it faces competition from “legacy application infrastructure and middleware form vendors” like IBM and Oracle. The company says it additionally competes with “open-source based offerings supported by vendors” like RedHat. Pivotal also faces challenges from SAP Cloud Platform, Amazon Web Services and Microsoft Azure.
The company says it believes it will stand out from the pack because of its strong security and easy-to-use platform. Pivotal also claims to have strong brand awareness and a good reputation. It has 118 U.S. patents and 73 pending and is betting that it will remain innovative.
Morgan Stanley and Goldman Sachs served as lead underwriters. Davis Polk and Fenwick & West worked as counsel.
The company listed on the New York Stock Exchange under the ticker “PVTL.”
It has been an active spring for tech IPOs, after a slow winter. Dropbox, Spotify and Zuora are amongst the companies that have gone public in recent weeks. DocuSign, Smartsheet, Carbon Black and Pluralsight are all expected to debut within the next month.
Building conversational interfaces is a hot new area for developers. Chatbots can be a way to reduce friction in websites and apps and to give customers quick answers to commonly asked questions in a conversational framework. Today, Google announced it was making Dialogflow Enterprise Edition generally available. It had previously been in Beta.
This technology came to them via the API.AI acquisition in 2016. Google wisely decided to change the name of the tool along the way, giving it a moniker that more closely matched what it actually does. The company reports that hundreds of thousands are developers are using the tool already to build conversational interfaces.
This isn’t just an all-Google tool though. It works across voice interface platforms including Google Assistant, Amazon Alexa and Facebook Messenger, giving developers a tool to develop their chat apps once and use them across several devices without having to change the underlying code in a significant way.
What’s more, with today’s release the company is providing increased functionality and making it easier to transition to the enterprise edition at the same time.
“Starting today, you can combine batch operations that would have required multiple API calls into a single API call, reducing lines of code and shortening development time. Dialogflow API V2 is also now the default for all new agents, integrating with Google Cloud Speech-to-Text, enabling agent management via API, supporting gRPC, and providing an easy transition to Enterprise Edition with no code migration,” Dan Aharon Google’s product manager for Cloud AI wrote in a company blog post announcing the tool.
The company showed off a few new customers using Dialogflow to build chat interfaces for their customers including KLM Royal Dutch Airlines, Domino’s and Ticketmaster.
The new tool, which is available today, supports over 30 languages and as a generally available enterprise product comes with a support package and service level agreement (SLA).
Zuroa’s founder and CEO Tien Tzuo had a vision of a subscription economy long before most people ever considered the notion. He knew that for companies to succeed with subscriptions, they needed a bookkeeping system that understood how they collected and reported money. The company went public yesterday, another clear sign post on the road to SaaS maturation.
Tzuo was an early employee at Salesforce and their first CMO. He worked there in the early days in the late 90s when Salesforce’s Marc Benioff famously rented an apartment to launch the company. Tzuo was at Salesforce 9 years, and it helped him understand the nature of subscription-based businesses like Salesforce.
“We created a great environment for building, marketing and delivering software. We rewrote the rules, the way it was built, marketed and sold,” Tzuo told me in an interview in 2016.
He saw a fundamental problem with traditional accounting methods, which were designed for selling a widget and declaring the revenue. A subscription was an entirely different model and it required a new way to track revenue and communicate with customers. Tzuo took the long view when he started his company in early 2007, leaving a secure job at a growing company like Salesforce.
He did it because he had the vision, long before anyone else, that SaaS companies would require a subscription bookkeeping system, but before long, so would other unrelated businesses.
Building a subscription system
As he put it in that 2016 interview, if you commit to pay me $ 1 for 10 years, you know that $ 1 was coming in come hell or high water, that’s $ 10 I know I’m getting, but I can’t declare the money until I get it. That recurring revenue still has value though because my investors know that I’m secure for 10 years, even though it’s not on the books yet. That’s where Zuora came in. It could account for that recurring revenue when nobody else could. What’s more, it could track the billing over time, and send out reminders, help the companies stay engaged with their customers.
As Ray Wang, founder and principal analyst at Constellation Research put it, they pioneered the whole idea of a subscription economy, and not just for SaaS companies. Over the last several years, we’ve heard companies talking about selling services and SLAs (service/uptime agreements) instead of a one-time sale of an item, but not that long ago it wasn’t something a lot of companies were thinking about.
“They pioneered how companies can think about monetization,” Wang said. “So large companies like a GE could go from selling a wind turbine one time to selling a subscription to deliver a certain number of Kw/hr of green energy at peak hours from 1 to 5 pm with 98 percent uptime.” There wasn’t any way to do this before Zuora came along.
Jason Lemkin, founder at SaaStr, a firm that invests in SaaS startups, says Tzuo was a genuine visionary and helped create the underlying system for SaaS subscriptions to work. “The most interesting part of Zuora is that it is a “second” order SaaS play. It could only thrive once SaaS became mainstream, and could only scale on top of other recurring revenue businesses. Zuora started off as a niche player helping SaaS companies do billing, and it dramatically expanded and thrived as SaaS became … Software.”
Market catches up with idea
When he launched the company in 2007, perhaps he saw that extension of his idea out on the distant horizon. He certainly saw companies like Salesforce needing a service like the one he had decided to create. The early investors must have recognized that his vision was early and it would take a slow, steady climb on the way to exiting. It took 11 years and $ 242 million in venture capital before they saw the payoff. The revenue after 11 years was a reported $ 167 million. There is plenty of room to grow.
But yesterday the company had its initial public offering, and it was by any measure a huge success. According TechCrunch’s Katie Roof, “After pricing its IPO at $ 14 and raising $ 154 million, the company closed at $ 20, valuing the company around $ 2 billion.” Today it was up a bit more as of this writing.
When you consider the Tzuo’s former company has become a $ 10 billion company, that companies like Box, Zendesk, Workday and Dropbox have all gone public, and others like DocuSign and Smartsheet are not far behind, it’s pretty clear that we are in a golden age of SaaS — and chances are it’s only going to get better.
There’s a new venture fund in town from some familiar faces.
Carey Lai, who previously worked at Intel Capital and IVP, is joining forces with Paul Yeh, formerly of Kleiner Perkins.
They’re calling it Conductive Ventures and it’s launching with $ 100 million under management. They’ll be investing in “expansion stage” companies across enterprise software and hardware categories, meaning Series A, Series B and beyond.
Check sizes will be between $ 2 million and $ 7 million dollars. They expect to invest in 10-15 companies for this first fund.
Conductive will be looking for “early product market fit with customer success,” Lai told TechCrunch. Then the plan is to “help them grow their businesses abroad.”
It’s not a corporate venture arm, but Conductive has Panasonic as its sole LP. Because of this, there will be a special focus on helping North American startups expand into Asia, particularly Japan.
Lai and Yeh touted “connections to Foxconn” and also ties to Taiwan to help them succeed overseas.
They also said they want to be hands-on when it comes to growth. Conductive will place an emphasis on improving margins, aiming to accelerate revenue and reduce costs.
The two were roommates when they were younger and think that they will get along especially well as an investment team.
So far, they’ve made four investments. There’s Ambiq Micro, a semiconductor manufacturer; CSC Generation, for consumer leasing; Desktop Metal, in 3D printing; and Sprinklr, for customer experience management. Lai has served on the board of Sprinklr. They hope to continue to take board seats.
Not to get ahead of things, but they are already thinking about fund two. Yeh said that it will be in “a couple years” and “slightly higher, slightly bigger” in size.