While big-name players such as Amazon, Google, IBM, Verizon and VMware sit atop the burgeoning cloud computing market, an entire ecosystem of early stage startups are looking to stake their claim, too.
And why not? As Ignition Partners' Frank Artale sees it, enterprises are on the precipice of the next major shift in computing and venture capital firms are "very aggressive" in looking for companies that can help customers ease their transition to the cloud.
"Initially this move will create more complexity," he says. "Companies that can enable the use of cloud, virtual networking and storage will gets lots of attention."
LAST YEAR'S LIST: 7 hot cloud companies to watch
Our list of a dozen such cloud computing upstarts, hailing from locations as far apart as Silicon Valley and Israel, includes those leveraging mobile devices for worker productivity, integrating software-defined networking and provisioning and monitoring cloud-based services. These companies -- many of which have been able to get up and running by taking advantage of cloud services themselves -- have attracted some $161 million in funding (one snared a $60 million round by itself) and are hungry for more as they look to grow their businesses.
Focus: Optimization of Microsoft Office apps for mobile devices Founded: 2009 Location: Palo Alto, Calif., with offices in Herzliya, Israel Management: Former Cisco employees Milind Gadekar (CloudOn CEO) and Meir Morgenstern (CloudOn VP of engineering/operations) Funding: $26 million from Foundation Capital, Embarcadero Ventures, Rembrandt Venture Partners and Translink Capital Product availability: Free download available on Apple, Android platforms now
Why it's worth watching: Ask Milind Gadekar, and he'll tell you that the workforce of the future will rely even more heavily on mobile devices. But for many workers, the most popular applications they use at their jobs are not optimized to work on mobile devices. That's where CloudOn comes in.
The folks at CloudOn are aiming to make that mobile workforce more productive with their free app that's in public beta. The company specializes in optimizing Microsoft Office for use on phones and tablets across a range of mobile operating systems, including iOS and Android, all using a cloud-based service.
Cisco purchased Gadekar's first startup, named P-Cube, which focused on network optimization for service providers, for $200 million in 2004. After heading up product marketing for the firm, Gadekar left the company three years ago to explore mobile optimization opportunities. That's when he founded CloudOn with Meir Morgenstern, who led the technical side of P-Cube and now serves as VP of engineering for CloudOn. Within a year of founding CloudOn, Gadekar says the best thing that could have happened to the company did: Apple released its first iPad.
With the release of the tablet, employees started bringing their iPads to work, looking to get access to email and their applications. "This was the exact problem we were trying to solve," Gadekar says. In January 2011, CloudOn launched a free version of its app, available in the Apple App Store. Within 12 hours it was the No. 1 app in the entire app marketplace, not just in the productivity category where the company placed it. "Since then, it's been a complete whirlwind," Gadekar says. CloudOn has launched in 80 countries and in 70 of those it became the top downloaded app within 24 hours of launch. The app is now available on Android devices and in just over seven months it's been downloaded 1.8 million times. "People are clearly looking for ways to be more productive, to enhance their mobile experience and to have a way to be mobile-centric," Gadekar says.
CloudOn powers its application using proprietary software developed for optimizing Microsoft Office for use on a gesture-controlled mobile device. On the back end, it leverages file sharing services DropBox, Google Drive and Box, while hosting the software as a service (SaaS)-based application in the Amazon Web Services cloud. The success has fueled the company's further development. Having raised $26 million through two rounds of funding, the company is aiming to start monetizing the product early next year.
Focus: Cloud and network mapping and performance benchmarking Founded: 2011 Location: Ann Arbor, Mich. Management: CEO Craig Labovitz, previously chief scientist/chief architect at Arbor Networks Funding: $1.5 million in seed funding from DFJ Mercury and RPM VenturesProduct availability: Public beta
Why it's worth watching: Just how well do you know your cloud?
Do you know all of the service providers in the supply chain that make up your cloud service? If you're a service provider, do you know exactly what's going on in your network? DeepField claims it has the answers.
Founded in the fall of 2011 by network security experts who specialized in DDoS protections, DeepField gives customers a deep analysis of what the company calls the cloud genome. It's the exact makeup of a cloud infrastructure and the various vendors and users on the network.
DeepField installs virtual machines on the network to conduct a range of analytical functions. "This allows anyone with a large network or compute infrastructure to get a clear handle on exactly what's happening in their network," says DeepField Chief Data Scientist Naim Falandino. DeepField officials are releasing scant details of how the system works because of a patent pending on the back-end technology, but Falandino says it has the ability to conduct real-time monitoring and mapping.
The company's product is currently in public beta, but DeepField is ramping up for its general availability this fall.
As Network World's Carolyn Duffy Marsan explained in a recent profile, mapping a cloud's architecture can help network operators better understand their cloud services, more easily launch new services and improve system performance.
DeepField engineers have already used their data to yield some interesting findings. In April, for example, co-founder Craig Labovitz described how he used DeepField technology to monitor weeks of network data from several million Internet end users to find that nearly one-third of all Internet traffic is somehow connected to Amazon Web Services infrastructure.
Focus: Business intelligence software Founded: 2011 Location: American Fork, Utah Management: Founder/CEO Josh James, who also started the Omniture Web analytics service Funding: $63 million, including from Salesforce.com CEO Marc BenioffProduct availability: Not saying yetFun fact: Changed name to from Corda to Domo, meaning "thank you" in Japanese, to thank customers for using the service
Why we're watching: You'd think Josh James would have been thrilled to sell Omniture to Adobe in 2009 for $1.8 billion, but he had frustrations: He says it wasn't easy to get access to all the reports he needed as CEO. HR reports were in one area and file system, financial and operational reports in another.
Now James is back on the startup scene with cloud-based business intelligence software vendor Domo looking to solve that problem.
"We're focused on helping business executives get the information they want, when they want it, how they want it," says Julie Kehoe, vice president of communications. The company remains fairly hush-hush about its technology as it continues to operate in stealth mode, but Kehoe says Domo can handle anything from sales to HR and online/offline marketing information from across an enterprise and beyond. "When we talk to customers right now, they talk about all the promises of analytics tools, but the No. 1 pain point is having all their information in one place," she says. Domo is designed to work on top of and alongside existing reporting applications, including Salesforce.com's CRM tool.
James got the company started last year by purchasing Corda, another analytics firm, and changing the name to Domo. No word yet on when the product will be released, but industry watchers expect it to be next year.
Focus: Virtualized network appliances Founded: 2009 Management: Former Cisco spin-in execs Dante Malagrinò (Embrane president/CEO) and Marco Di Benedetto (CTO) Funding: $27 million from North Bridge Venture Partners, Light Speed Ventures and NEA Product availability: Version 2.0 is generally available
Why we're watching: What's the next big thing in cloud computing? If the buzz in the network industry is any indication, it could be software-defined networking (SDN).
While SDN promises to virtualize network Layers 2/3, it does not address the upper layers, 4 through 7, and that presents an opportunity to Embrane, says John Vincenzo, vice president of marketing. [Also see: "Startup founded by ex-Cisco execs pushes software-defined networking"]
Embrane's software, which it markets as Heleos, virtualizes load balancers, firewalls, VPNs and other services, allowing the applications to be provisioned in minutes and dynamically scaled as needed. It gives the functionality of a hardware appliance in the convenience of a software package, Vincenzo says. "In the evolution of IT infrastructure, virtualization has hit the compute and storage layers, but the network has still not caught up," he says.
Embrane doesn't compete directly with SDN players such as Nicira and Big Switch, but company officials hope to position its offering as a complimentary service that can be used inside or outside an SDN environment to virtualize network applications. It could be used either as an on-premise or via the cloud.
As SDN continues to gain market clout, particularly with VMware's recent $1.2 billion Nicira acquisition, Vincenzo says Embrane is expecting a big push by enterprises to virtualize various parts of the network. If they're not ready to take the full plunge into SDN though, he says virtualizing the upper layers of the network and the applications serving it can be less daunting, but equally fruitful in achieving increased network agility. "Any enterprise that needs to rapidly deploy new applications, or manage multiple private cloud deployments could benefit from easier deployment of network applications," he says.
Focus: Redis and Memcached NoSQL database optimization and management Founded: 2010 Location: Santa Clara, Calif., and Tel Aviv, Israel Management: Former F5 Networks execs Funding: $3 million in angel funding Availability: Generally available for free as a public beta
Why we're watching: The world used to be a place of structured data, neatly organized in Excel spreadsheets showing the metrics of a business. But data today is big and unstructured, and there are increasingly popular databases used to handle such information.
Two of the most popular are Redis and Memcached, both of which are NoSQL in-memory databases, allowing them to be faster than traditional databases that store information in disk storage or flash memory. Some of today's leading Web companies use these technologies: Flickr and GitHub are among Redis users for unstructured data, while Memcached is employed by Twitter, Zynga, Facebook, YouTube, Pinterest and Netflix.
But these open source databases aren't really plug-and-play ready for developers. Most notably, Redis by default is not easily scalable and Memcached does not inherently provide for high availability.
In steps Garantia, a company that attempts to ease the management of in-memory NoSQL databases. "Lean back and let us do the heavy lifting for you," pleads CEO Ofer Bengal, who co-founded the company along with CTO Yiftach Shoolman, former president and CTO of network management company Crescendo Networks, which was purchased by F5.
The key to the technology, Bengal says, is Garantia's ability to compress files while automatically sharding them, which saves memory space and ensures the fastest possible retrieval.
Garantia services currently are only offered through Amazon Web Services marketplace, but in the future Bengal hopes to attract other public cloud providers. The company also will look to expand support to other database types.
Focus: Enterprise storage platform Founded: 2010 Location: Mountain View, Calif. Management: CTO Jay Kistler is former engineering VP at Yahoo; CEO Amarjit Gill has sold companies to Apple, Google, Broadcom Funding: $10 million, with backing from EMC, VMware and Atlantic BridgeAvailability: Generally available this month
Why we're watching: Maginatics offers a file storage system that company officials say could provide a whole new way for IT administrators to exploit cloud-based resources while maintaining data security and control.
The company's MagFS file management system, which it launched at VMworld, overlays cloud or on-premise storage to create a distributed file system that can be accessed via mobile devices.
One of the impressive things about Maginatics is the cadre of talent on its executive and advisory team. CTO Jay Kistler, former VP of engineering at Yahoo, holds a doctorate from Carnegie Mellon and previously served as chief architect for platform technologies at Akamai. Chief Architect Niraj Tolia is a former senior researcher at HP Labs, while CEO Amarjit Gill sold his last company, Agnilux, to Google, and his previous one, P.A. Semi, to Apple.
The secret sauce behind MagFS is a software design that separates data and the underlying bits and bytes that make up the information, which is encrypted at the granular level. This creates a plane for controlling the data and another for transferring and accessing information. Separating the two means data security can be centrally managed by IT, while allowing for it to be accessed on a range of devices. Users download a mobile client that decrypts the data and allows it to be accessed if they have the appropriate keys, which are centrally managed by the system. "This opens up economic benefits and access to data without sacrificing security," Kistler claims.
MagFS is different from other file sharing and document management systems because it's software, not a service, like Box, DropBox or Egnyte. "Enterprise IT has become a service provider," and IT needs ways to control the data, Kistler says.
Focus: Amazon Web Service monitoring, optimization Founded: 2010 Location: Tel Aviv, with plans to move its headquarters to the United States Management: Co-founders Zev Laderman and Ilan Naslavsky once sold a startup to Sun Funding: $4 million from Greylock Partners, Index Ventures and Eric Shimidt's Innovation Endeavors Fun fact: Originally were going to name the company Nuvem, which means "cloud" in Portuguese, but because that domain name was not available, settled on Newvem
Why we're watching: The folks at Newvem know a thing or two about efficiency analytics.
This is the second startup for CEO Zev Laderman and CTO Ilan Naslavsky, who got together in the mid-2000s to create Aduva, an open source analytics firm that was eventually sold to Sun Microsystems and later rolled into Oracle. This time they're focused on becoming the go-to source for analytics related to usage of the most popular cloud vendor in the market: Amazon Web Services.
Newvem has a read-only API call that sends customers' data provided by AWS into an analytics-pumping machine, which then informs customers how efficiently they're using AWS services and recommends ways they can save money. The company's product is in public beta and it's expected to be generally available this fall.
Initial prototypes of the Newvem service included analytics around the most important metric for most customers -- cost. Initial results proved fruitful: Newvem says it helped all 40 of its alpha customers spend less money by reducing the number of servers they order from AWS. Customers in total yielded a 33% savings on weekdays and a 50% savings on weekends from turning off idle servers. Further iterations of the product focused on right-sizing servers to ensure customers are ordering only the compute and storage instances they need. Newvem now focuses on four metrics: Utilization, availability, security and spend efficiency.
Once the product hits general availability, Laderman says it will be able to handle anything from individual users all the way up to organizations running tens of thousands of servers on AWS, with pricing based on utilization. Down the line, Laderman hopes to one day expand the business outside of just monitoring AWS to provide analytics of other cloud platforms, eventually being able to advise clients on which public cloud platform may be best for them based on their usage and the cloud provider's pricing.
Focus: Application deployment, management and optimization Launched: 2011 Location: Philadelphia Management: Three co-founders are former eBay engineersFunding: Self-funded by founders
Why we're watching: In cloud computing when you need a new virtual machine, you can simply go to any number of providers, click a few buttons, supply your credit card information and you have a new server ready to go. Same with storage, which can be scaled based on demand. Launching applications, though, is different and not as simple, say the folks from OneOps. Their system aims to make it easier.
OneOps originated from a group of eBay engineers who found that launching applications is in many cases a painful and cumbersome process. OneOps provides continuous and full-circle lifecycle management for simple to complex applications. In the OneOps control panel developers are able to pull in various attributes that an application will need. One application may need a MongoDB, while another may need to be written in PHP, while some may be launched in an Amazon cloud and others in an OpenStack-powered cloud. OneOps allows these differentiating features of an application to be centrally managed, meaning developers can provision and launch applications as needed. Just like spinning up infrastructure services from the cloud, OneOps is taking that idea to launching applications in the cloud.
Co-founders Vitaliy Zinchenko, Kire Filipovski and Mike Schwankl noticed the problem of application management while at eBay where Filipovski managed engineering services for the online auction site. "We were handing over applications between multiple teams just to get them launched," Filipovski says. "It can take 40 tickets to deploy a simple application." The issue gets back to a fundamental friction between development and operations teams, he says. OneOps, he hopes, increases the agility of being able to launch applications. The company uses an assembly line approach to install repeatable patterns used to create applications, allowing developers to iterate from application to application.
The founders have bootstrapped the startup since launching it in March 2011 and releasing the product in May of this year in private beta. They're now seeking outside funding as they expand their go-to-market strategy.
Focus: Software-defined networking as a cloud-based service Founded: 2011 Location: Cupertino, Calif. Management: Former Packeteer CEO Craig Elliott, who's also an ex-Apple execFunding: $8.85 million from Norwest Venture Partners and Lightspeed Venture Partners Fun fact: Name is short for the town it is headquartered in
Why we're watching: SDN technology is discussed mostly in the context of large enterprises and services providers, but one veteran network company exec has his own plans to bring SDN to the masses, and specifically to small and medium businesses via the cloud.
Craig Elliott -- former head at network appliance company and Blue Coat Systems acquisition Packeteer Networks -- was fly-fishing in New Zealand last year when former colleagues pitched him this idea: Use the cloud to deliver sophisticated networks to small and midsize businesses through a straight-forward portal.
Today's networking landscape is a box-centered world, Elliott says. Everything requires a piece of hardware. "There's a million companies selling boxes," he says, admitting that Packeteer was one of them. "If you want any sort of WAN optimization, security or another feature, basically that means you need to buy another box. That takes the mid-market and small market guys out of the picture," he says. "It's too expensive and too complicated." By using a cloud-based service and local access clients, a business can quickly provision a wide-area network, without a massive investment in hardware boxes.
Founded last year, Pertino has been operating in stealth mode, providing scant details of its plan until this past spring when it announced almost $9 million in venture financing. The team is made up of Elliott and a cadre of engineers he worked with at Packeteer, including co-founders Scott Hankins (who also spent time at NASA) and Andrew Mastracci. Pertino's product is currently in private beta, with plans to launch in early 2013.
Elliott sees a huge market opportunity given the increased reliance small businesses will have on communications and network technology and the challenges of managing a mobile workforce. Combine that with the ease and simplicity that businesses will become accustomed to with cloud-based services, and Elliott hopes his team will have a company worth watching.
Focus: Multi-cloud monitoring and management tools Founded: 2010Location: San Mateo, Calif. Management: Co-founders' former startup sold to BMC for $800 million Funding: $13.5 million from Accel Partners and Ignition PartnersAvailability: Free, generally available SaaS download, some additional analytics features still in private beta
Why we're watching: As cloud computing continues to gain prominence, Nand Mulchandani doesn't believe that enterprises will be keen on putting all their eggs in the basket of one public cloud service provider. They will spread their risk and federate workloads across multiple clouds.
"Customers are building distributed data centers," says Mulchandani, CEO and co-founder of ScaleXtreme. "All of a sudden your servers are no longer in one location, they're potentially in multiple locations, on multiple infrastructures. But they still need to be managed."
ScaleXtreme allows customers to centrally monitor and provision public clouds from a dozen vendors, including Amazon, Azure, Citrix, Dell, Rackspace, VMware and others. Users can see how much CPU, disk storage and various other resources are being used on all of their cloud deployments at once, while monitoring downtime and ensuring security controls are up to date. ScaleXtreme can also be set up to automatically update security patches on virtual machines running on multiple clouds, and it can be configured to back up data or do audit checks of workloads running across public clouds. ScaleXtreme can also be configured to monitor multiple internal, behind-the-firewall data centers or private clouds, all through a single pane of glass.
Company co-founder and CTO Balaji Srinivasa has roots in data center automation, having served as principal product architect for BladeLogic, which was acquired by BMC in 2007 for $800 million. That automation background is seeded deep in ScaleXtreme. The technology works by installing an agent on the public cloud services that connects back to ScaleXtreme's cloud, which does the legwork. The ScaleXtreme system then is able to not only monitor the health of the clouds, but also command them based on the client's needs.
Next up for ScaleXtreme will be going beyond monitoring and provisioning and into predictive analytics. The company recently launched its first tools in that area, which give customers advice on how to provision the exact amount of resources that will be needed based on their history and the experience of other customers.
Focus: Social media analytics Launched: 2011 Location: Austin, Texas Funding: $2.9 million in angel funding Availability: Publicly available
Why we're watching: Gone are the days of relying solely on 1-800 customer service numbers to air grievances with companies. Twitter, Facebook and other social networks allow customers to complain, and put public pressure on companies to clean up their acts.
All of which has companies scrambling to monitor such social media activity so that they can weed through the fire hose of tweets, posts and messages.
Social Dynamx is trying to address this market with a product delivered as cloud-based software as a service (SaaS) that provides businesses and workers in contact centers with the ability to monitor, analyze and respond to consumer communications. Social Dynamx estimates that 70% of brand tweets go unanswered today, along with a whopping 95% of Facebook posts. "I literally see social media transforming what we know of in the contact center today," says President and COO Jan Ryan.
While there are a variety of other companies that provide social network monitoring, Ryan says Social Dynamx goes the extra mile to provide analytic tools on top of the stream of information it collects. Social Dynamx can be added on to social media monitoring tools, analyze information they collect and prioritize it based on the necessity of a response. "We basically filter out the noise and surface out things that are relevant, placing them in an actionable cue so you know what needs to be prioritized," Ryan says.
The company was founded by a group of enterprise collaboration and business analytics veterans, including Ryan, who was CEO of Sigma Dynamics, which Oracle acquired in 2006. Social Dynamx's CEO Mike Betzer headed up MCI's contact center operations before helping to start Social Dynamx.
The company uses Java-based software that is hosted in the Amazon Web Services cloud to filter and prioritize information it gathers from the social media world. Social Dynamx works with individual customers to customize search terms, and target terms and specific vocabulary related to the company's product names, executives or services. The company even offers integration with customer relationship management (CRM) software to log communications and prioritize interactions with high-profile clients.
Focus: Application user management service Founded: 2011 Location: San Mateo Management: Co-founder and CTO Les Hazlewood is chair of Apache Shiro project Funding: $1.5 million seed funding from NEA, Flybridge, Benchmark Capital and WealthFrontProduct availability: Public beta
Why we're watching: Stormpath is trying to make more palatable one of the peskiest parts about building an application: managing user access controls and all of the various accounts, passwords and authentication
Think about it this way: Any application that has more than one user needs a way to manage the different users' passwords, what parts of the application he or she can cannot access, as well as manage password resetting and account verification.
The problem, says co-founder and CEO Alex Salazar, is that "this stuff is hard to get right." Even for experienced developers who know how to build user access controls, it's not trivial to write code providing these features. Plus, Salazar says it's not something that is a distinguishing feature of your application, it's basically just something that applications need. Salazar points to high-profile breaches of companies like LinkedIn, Sony and eHarmony to illustrate how important user access controls can be. "If you get this stuff wrong it can be really bad."
Stormpath was born out of the vision of Salazar, a former IBM senior sales executive, and Les Hazlewood, a former enterprise architect at Bloomberg and Delta Airlines and one of the pioneers of the open source Java security framework Apache Shiro, which is a core piece of the Stormpath code. Salazar compares it to a trendy nightclub where Shiro is the bouncer standing at the door, providing the security framework, while Stormpath would be the guest list, dictating who is let in.
Stormpath is code language and framework agnostic and is priced based on the number of applications it is managing with different tiers of feature sets offered, ranging from a free version to an enterprise-grade fully supported option. Because the service is delivered through a SaaS-based model, Salazar says Stormpath is able to centrally implement the latest security patches and settings throughout the system.
Into next year, Stormpath is hoping to expand its role in the application lifecycle process beyond just developers. Stormpath hopes to extend the service to operations and IT professionals who are looking to set up user access controls within an organization. "Our goal is to help them implement a next generation user management system and help them migrate off LDAP, [Active Directory], custom systems, and home-grown scripts where they want to," he says.
Network World staff writer Brandon Butler covers cloud computing and social collaboration. He can be reached at BButler@nww.com and found on Twitter at @BButlerNWW.