10 Hot Cloud Startups to Watch

ickybiblegroveInternet and Web Development

Nov 3, 2013 (4 years and 8 months ago)


10 Hot Cloud Startups to Watch

After evaluating more than 150 new cloud ventures, here are the top 10 cloud startups.
These companies are shaping
or have the potential to shape
how the cloud computing
market will evolve.

When we requested suggestions
for cloud startups to evaluate Top 10 list, we received
more than 150 nominations. After reviewing the nominations and getting your input, we
narrowed the list down to the 10 most promising.

The Top 10 mixes track record with potential. Some startups, such

as Aryaka Networks
and HyTrust, are more established and have long lists of customers wins. The list also
includes more recent startups that are included more for their potential than their current
status in the market. Several of these newer companies ar
e helping determine just how
the cloud computing market will evolve. They include dinCloud, Nebula and SaaS

The process for this roundup was a little different than in the past. After the nominees
were narrowed down to 25, the list was posted at

and then we let readers vote.
After more than 4,500 votes were cast, we finalized the top 10 list. However, voting was
weighted at only 25 percent of the overall score. Equally important were pedigree of the
management team, VC funding and just h
ow pressing the pain point is that the startup
addresses. Yet, most of the top vote
getters ended up in the final roundup (7 out of 10).

We want to take the Top 10 list a step further. In a week or so, these startups will be
reordered and ranked (they are

in alphabetical order now) based on voting, funding,
strength of the management team and several other factors.

With those caveats out of the way, here are 10 Hot Cloud Startups you should watch (in
alphabetical order).


What they do
: Help companies migrate server applications to the cloud.

: Andover, Mass.

: Greg O'Connor. He previously served as founder and president of Sonic Software,
acquired in 2005 by Progress

: September 2010

: $10 million in angel funding from Covington Capital and private investors.

Why they're on this list
: Moving applications from traditional IT systems to the cloud
isn't easy. AppZero encapsulates an application and

its dependencies in a "virtual
application appliance," without a virtual machine (VM). The result is an application that is
flexible, "hypervisor
agnostic, cloud independent, and fast." Current customers include
Pabst Blue Ribbon.

AppZero also staged a so
lid push in Startup50 voting, winning the overall competition
with 17 percent of the vote total. Why does that matter?

What voting proves to me is that the startup is focused enough on marketing and PR to
effectively get its message out. It also shows tha
t the message resonates well enough to
entice third
parties to support it. If you think this is trivial, you're forgetting that plenty of
technically superior startups have failed over the years because they failed to connect
with prospective customers.

arket Potential and Competitive Landscape
: Gartner predicts that the cloud
(IaaS) spending will exceed $72 billion
, (42 percent CAGR)
by 2016. Competitors include companies PlateSpin (which is now part of NetIQ).

Aryaka Networks

What they do
: Provide cloud
based WAN optimization and application acceleration

: Milpitas, Calif.

: Ajit Gupta, who previously founded Speedera and served as its President and CEO
until it was acquired by Akamai for approximately $500 millio

: November 2008

: The

has raised $45 million in three rounds of funding. The most
recent round was a $25 million Series C led by InterWest Partners, with participation from
Presidio Ventures, a Sumitomo Corporation Company, and exi
sting investors Nexus
Venture Partners, Trinity Ventures and Mohr Davidow Ventures.

Why they're on this list
: WAN optimization is typically too costly for the middle market.
Aryaka zeroed in on this problem and determined that the best way to drive down co
and democratize the technology was to deliver WAN optimization as a service.

Aryaka first built a delivery network comprised of globally distributed POPs. Enterprise
locations connect into the Aryaka network over existing Internet links (or using a di
rect L2
connections) to one or more POP. Provisioning can be accomplished in minutes

than days or weeks as with hardware
based solutions.

To boost application acceleration, Aryaka runs TCP optimization technology, as well as
bandwidth scaling and

specific proxies. Aryaka also provides access to
based SaaS and cloud services, which help customers avoid middle
congestion problems that Internet
based connectivity solutions experience.

Moreover, Aryaka has a solid management

team. CEO Ajit Gupta Founded Speedera
and sold it to Akamai for $500 million. The management team has a solid track record in
the traffic acceleration space. Aryaka also finished second in Startup50 voting with more
than 12 percent of the total.

Market p
otential and competitive landscape
: According to IDC, the WAN optimization
market should have topped $1.3 billion by the end of 2012. There are some major
incumbents in this market, though. Riverbed owns about 50 percent of the market, while
Cisco, F5, Blu
e Coat and Silver Peak are all formidable foes.

That said, the IT market as a whole is slowly moving away from box
heavy infrastructures

the delivery model of the above providers

and to services. Moreover, the middle
market is grossly underserved by

existing solutions, and even many large enterprises are
reluctant to deploy hardware at branch offices, which will greatly benefit from a service
like this.

Blue Jeans Network

What they do
: Develop cloud
based videoconferencing tools that bridge various
available services.

: Mountain View, Calif.

: Krish Ramakrishnan, who formerly served as CEO for Topspin, which was
acquired by Cisco in 2005. At Cisco, he served as GM of
the Server Virtualization
business unit.

: November 2009

: The company has raised $48.5 million from New Enterprise Associates, Accel
Partners and Norwest Venture Partners.

Why they're on this list
: Today, various videoconferencing systems do

not interoperate.
Cisco videoconferencing units don't talk to Polycom which don't talk to Google which
don't talk to Skype and so on. Imagine if this were the case with telephony. If you were a
Sprint customer, you could only talk to other Sprint customer
s. If you wanted to talk to
someone on AT&T or Verizon, you'd need to download special software.

Blue Jeans Network leverages the cloud to turn videoconferencing calls into a "meet me"
service, where each party dials into the videoconference from whichever

system they
prefer to use. The end point hardware becomes irrelevant

kind of like how the handset
is irrelevant when placing a call.

On its roadmap, Blue Jeans intends to eventually take users from the audio
only calling
market and shift them to video
calls. Customers include Facebook, Match.com,
Foursquare and the Sierra Club.

Market potential and competitive landscape
: According to Wainhouse Research, the
videoconferencing infrastructure market represents a $700 million/year market. However,
this is a

crowded space. In addition to incumbents like Polycom and Cisco, cloud
newcomers, such as Join.me and FuzeBox, will challenge Blue Jeans. That said, Blue
Jeans is the only tool I'm aware of that stitches an array of conferencing services


What they do
: Develop cloud
based data integration tools.

: Chicago, Ill.

: Mike Sands. Prior to joining BrightTag, Sands was part of the original Orbitz
management team

and held the positions of CMO and COO.

: 2009

: They've raised $23 million to date from Baird Venture Partners, EPIC Ventures,
I2A Fund, New World Ventures and
Tomorrow Ventures

Why they're on this list
: Today, if a Website owner wants to w
ork with multiple third
party services (e.g. Google Analytics, ad networks, social, etc.), they have to conform to
an outdated construct of putting the vendor's code (or "tag") on every page of their
Website that they want to track. In doing so, the site o
wner is not in control over the data
collected, they introduce site performance issues with more code being pushed through
their consumers' browsers, and they create silos of data across each vendor's service,
not to mention creating privacy issues with re
gard to data collection practices.

BrightTag intends to simplify how Websites connect to their partners by providing a single
point of integration for any data
driven service. The company's platform replaces
traditional "tag
centric" methods of connecting
sites to marketing services with real
direct integration through the cloud.

Clients include Yahoo! Japan, Gap, Macy's, Levi's, Bebe, Tommy Bahama, Crate &
Barrel, JetBlue Airlines, Orbitz, Starwood, US Cellular, Transunion and Allstate.

Market landsc
ape and competition
: This market is new enough that there aren't good
market estimates on it. Google, Adobe and IBM offer competing tag container solutions.

BrightTag argues that most competing solutions on the market are "tag containers." As
based tags continue to proliferate

either fueled by the advent of tag
management solutions or from continued industry growth

both data collection and the
site users' experience become slow and unstable.

BrightTag cloud
based service eliminate
s vendor tags altogether and connects data
directly. There are no "tags" in a point
sale system or a mobile app or email. According
to Web analytics firm BuiltWith 30 percent of the top internet retailers have employed a
tag management system and of tho
43 percent are using BrightTag


What they do
: Develop tools that provide visibility into cloud and CDN performance, and
then help users act on that information.

: Portland, Ore.

: Marty Kagan, who previously served as vice president of engineering for Jive

: Q4 2009

: They landed a $7 million Series A round in mid
2011 from Madrona Ventures
Group and Advanced Technology Ventures (ATV).

Why they're on this list
: Let's face it, the roadblock for many cutting
edge cloud
services, especially those using rich media, is the poor performance and unpredictability
of the public Internet. Cedexis' mission is to improve "the Web experience of billi
ons of
Website visitors each month by providing visibility into the performance of clouds and

Cedexis Radar is a free community that crowd
sources visibility into cloud and CDN
performance from the end user perspective. It has global reach and is u
pdated over 1
billion times a day.

Cedexis Openmix is a paid Cloud SaaS offering that uses Radar, and other real
data, to dynamically route Website and Web application traffic around outages and
service degradations.

The newest product, Cedexis Fusion
, is a Big Data tool that aggregates third
party data,
including pre
built integrations for New Relic, AppDynamics, Akamai, Level3, Edgecast,
ChinaCache, SoftLayer and many others, to further improve the availability and
performance of customer Websites an
d Web applications.

Customers include Mozilla, Dior, Nissan, Volkswagon, LeMonde, France Television,
Yves Roche, NBC News, Accor Hotels, EuroDisney, L'oreal, and Via Michelin.

Market landscape and competition
: According to Gartner's 2012 Magic Quadrant for

Application Performance Monitoring, the APM market should have hit $2.14 billion by the
end of 2012 (a 9 percent increase over 2011). Meanwhile, Markets and Markets believes
CDN market will grow to from $2.1 billion in 2011 to $7.4 billion

by 2017.

Competitors include CA (through its Nimsoft acquisition) and Zenoss.


What they do
: Help small

to mid
sized businesses migrate and provision desktops,
servers, storage, networking and applications to a Virtual Private Data Center.

: Los Angeles, Calif.

: Kevin Schatzle. Prior to joining dinCloud, he was President of Al
lied Digital
Services' U.S. subsidiary.

: January 2011

: The company has secured an undisclosed amount of angel funding.

Why they're on this list
: Most enterprises know they should virtualize their
infrastructures, but they struggle with wher
e and how to start. According to dinCloud,
virtualization and cloud computing aren't just about hosting servers alone, or giving
customers virtual machines in the cloud. They are about business provisioning and
helping businesses transform their physical e
nvironments to virtual ones.

dinCloud's software enables the rapid migration/provisioning of desktops, servers,
storage, networking and applications to a Virtual Private Data Center. Customers can
control as much of this infrastructure as they want through

an online cloud orchestration
and management platform, dinManage.

profile partner Microsoft says that it worked with dinCloud to help save a
services customer 50 percent on IT spending
. In this case, dinCloud hosts 250 virtual
desktops, 30
virtual servers, and provides second site back up in the cloud.

Named customers include King's Hawaiian and National Asset Direct. dinCloud also
finished fourth in Startup50 voting with 8.5 percent of the vote total.

Market landscape and competition
: Gartner predicts that the cloud Infrastructure
(IaaS) spending will exceed $72 billion
, (42 percent CAGR) by 2016.
include AppZero, Eucalyptus, Nebula, RingCube and Rackspace.


What they do
: Develop virtualization security tools.

: Mountain View, Calif.

: John De Santis serves as CEO. Eric Chiu co
founded the company and is its
president. De Santis was
formerly chairman and CEO of TriCipher, a software security
infrastructure company acquired by VMware in 2010. After the acquisition, he served as
VP, Cloud Services for VMware. Chiu was previously VP of Sales and Business
Development for Cemaphore Systems

: April, 2009

: HyTrust has raised $16 million from Trident Capital, Granite Ventures and Epic
Ventures, as well as strategic corporate investors such as Cisco and VMware.

Why they're on this list
: Virtualized and cloud infrastructures crea
te new security,
control, management and compliance challenges for IT staffs. Organizations take big
risks when they move to the cloud or rely on virtualization when critical applications and
sensitive information are not properly secured.

The HyTrust Appl
iance delivers access control, enforcement of policy across virtual
infrastructures, hypervisor hardening, and audit
quality logging among other features. By
addressing these requirements, HyTrust is able to provide organizations with the control
and visib
ility required for them to virtualize Tier 1 applications, meet corporate
governance requirements, and avoid costly downtime or other possibly more serious
business disruption.

Customers include AIG, U.S. Army, Northrop Grumman, Pepsi, McKesson, Home
ing Network, Federal Reserve Bank of Chicago, UC Berkeley, State of New
Mexico, and Denver Museum of Nature & Science.

Market landscape and competition
: The cloud security market is incredibly crowded,
but HyTrust has carved out a solid niche by focusing o
n hypervisor vulnerabilities.
Competitors include Altor Networks (now Juniper) and Catbird.


What they do
: Provide OpenStack
based appliances that let businesses deploy and
manage private clouds.

: Palo Alto, Calif.

: Chris Kemp, who was previously CTO for IT at NASA, where he also co
the OpenStack project

: April 2011

In September 2012, the company raised a $25 million Series B round led by
Comcast Ventures and Highland Capital Partners. Kleiner Perkins, William Hearts II,
Maynard Webb, Scott McNealy, Innovation Endeavors participating and Google's first
three investors

(Andy Bechtolsheim, David Cheriton and Ram Shriram) also participated.

Why they're on this list
: OpenStack is shaking up the cloud infrastructure landscape,
serving as the main open
source alternative (sorry CloudStack) to VMware. CEO Chris
Kemp co
ed OpenStack while he was at NASA, and along with Rackspace, Nebula
is a key driver helping to make OpenStack a viable alternative to closed cloud systems.

NASA and several other government agencies use OpenStack for their own private
clouds. Nebula delivers its private cloud solution as an appliance.

Market potential and competitive landscape
: Cloud market predictions are all over the
map (Forrester predict
s that the global
cloud computing market will grow

from $40.7
billion in 2011 to more than $241 billion in 2020, while Deloitte predicts that cloud
applications will only replace 2.34 percent of enterprise IT spending in 2014 rising to
14.49 percent
in 2020, while also pushing down costs in the process). We do know,
though, that the cloud deployment and management market will be large.

This sector is a land grab as of now, but there is a ton of competition already, including
VMware, AWS, Citrix (CloudStack), dinCloud, AppZero, Eucalyptus, Rackspace, OnApp,
Piston and many others.


What they do
: Provide cloud services, including IaaS, CDN and storage services.

: London, U.K.

: Ditlev Bredahl. Before founding OnApp, Ditlev led UK2 Group's hosting companies
as Managing Director and CEO.

: July 2010

: To
date, OnApp has raised $20 million in two rounds of funding. The latest B
round of funding was led by UK private equity firm LDC.

Why they're on this list
: If you're a traditional hosting provider, you have either already
transitioned to being a cloud prov
ider or you are scrambling to do so.

OnApp's mission is to remove the entry barriers to the cloud for Web hosts, telcos, ISPs,
MSPs and other traditional service providers. OnApp developed a turnkey system that
enables service providers to create their ow
n cloud services, using their existing servers
or data centers, with no up
front software investment required.

The OnApp Cloud platform takes care of all core cloud management/orchestration
functions, such as cloud deployment, VM management, failover and a
utoscaling.It also
includes the capabilities lacking from most enterprise
focused private cloud platforms, but
which service providers absolutely depend on, such as support for different utility and
based billing models; the ability to bill for every
hardware resource in your cloud;
and user management, limits and permissions.

The latest version of the OnApp Cloud platform includes a built
in SAN, a global CDN
with video streaming support, DNS management, autoscaling, load balancing and a
range of oth
er features. Customers include PEER1 Hosting, GMO, UK2 Group,
Dediserve and eApps. OnApp finished third in Startup50 voting with 9.6 percent of the

Market landscape and competition
: OnApp is targeting a public
cloud IaaS market

currently estimated
at $6.2 billion, according to Garter, and a
CDN market

estimated at
$2.5 billion, according to Markets and Markets.

Competitors include Boomi and ScaleUp Technologies. With its recent service upgrade,
OnApp now also competes with CDN providers.

SaaS Markets

What they do
: Provide the cloud
based infrastructure that enterprises can use to launch
mobile app and SaaS stores.

: San Mateo, Calif.

: Ferdi Roberts, who previously he
ld senior executive positions at Yahoo, Cisco, and

: 2011

: They have not disclosed funding details.

Why they're on this list
: As BYOD becomes more common and as the "appification"
trend continues unabated, enterprises must find ways
to approve and control these apps.
SaaS Markets intends to address this problem by giving enterprises the tools they need
to launch their own app and SaaS stores.

App qualification is managed by the SaaS Markets Application Partner team, which runs
SaaS ap
plications through a series of rigorous tests. MarketMaker, the SaaS Markets
platform, includes a search engine to make it easy to find all relevant apps, and evaluate
and test them side
side in terms of capabilities, interface, features and cost.

ntly, SaaS Market also offers more than 1,300 pre
qualified SaaS apps for tasks
that range from managing social media outbound messages to project management to
cash flow management to security.

Customers include the Montana Chamber of Commerce, Associatio
n of Washington
Business, Park City, UT Chamber of Commerce and Auburn, WA Chamber of

Market landscape and competition
: Forrester Research is projecting the SaaS
software market to increase 25 percent in 2013 to $59 billion, a 25 percent increase
. In
2014, Forrester projects the market to total $75 billion. Competitors include App47 and