Before you can play in the cloud, you must first break the cloud — or at least build up a solid infrastructure to utilize it.

That’s the specialty of Happy Cloud, a cloud-gaming firm that today announced the closure of a $4.25 million funding round. Avalon Ventures led the latest investment along with Jesselson Capital and Shaman Ventures. Happy Cloud’s funding total is now at $7 million.

The company also introduced Tamir Buchler, an e-commerce veteran, as its new chief executive officer.

“Happy Cloud adds unparalleled value to the gaming ecosystem by eliminating barriers to entry and giving users what they want,” Buchler noted. “By offering free on-demand access to the best high-end games, we can bring new gamers on board, increase conversions and keep gamers engaged. Happy Cloud is a scalable solution that can effect change in the same way iTunes and Netflix have transformed media consumption by offering seamless, instant access.”

Happy Cloud provides server-based distribution to PC, console, and Android game publishers. It will use this latest infusion of cash to expand its games-on-demand service.

“We are excited to have Tamir Buchler on board,” said Michael Jesselson of Jesselson Capital. “He has strong leadership skills and has a proven track record of driving revenue growth for consumer-facing platforms.”

---

GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

---

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

“Video is the new audio”, we often hear from startup founders who are setting their sights on large businesses.

The latest startup in the video collaboration category is Weemo, a company that was founded by French entrepreneur and telecom exec Thomas Cottereau (pictured, below).

Today, Weemo has raised $3 million investment from European private equity firm Idinvest Partners, bringing its total funding to $5 million. With the infusion of capital, Cottereau intends to expand to the U.S., and add more talent to the team so it can compete with established vendors like Vidyo, Avaya, Cisco and Microsoft.

Formerly known as “Wimo,” Weemo has made headway with customers who believe that Microsoft-owned Skype doesn’t integrate well with existing professional tools.

Weemo’s team claims its unique approach will give it an edge over the competition. The company has also developed a set of APIs, which can be leveraged by developers to add live video tools to any application or environment.

Just connect to the Weemo REST API, cut and paste a few lines of code in a web or mobile app, et voila, video calls. Companies are charged on a per user basis, which makes it more affordable than the legacy players in the space.

Cottereau said the goal is to make video a “de facto extension” of employee workflow. Companies don’t need to install any additional hardware (and pay for those expensive upgrades), as Weemo is purely a cloud service.

Weemo was founded in 2007, and currently has offices in Paris and San Francisco.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

For hotels, a technology glitch can result in unhappy tourists and millions in lost revenue.

Hotel Ninjas, a Barcelona-based startup with a vision to be the Salesforce.com for the hospitality industry, is launching this week. Cofounder Avi Meir said he was inspired to start the company after realizing that most hotels still relied on “expensive, outdated, server-based technology.”

HotelNinjas cofounder Avi Meir

Hotel Ninjas offers property management and channel management tools (through an integration with WuBook), a customer relationship management service, and a booking engine for hotel websites. Meir says 30 hotels are lined up and are “ready to make the switch.” The company is charging its first customers $4-9 per room on a month-to-month basis.

Hotels can sign up directly or via AppExchange, Salesforce’s app marketplace. Meir told me he recently made a trip to Salesforce’s European headquarters to form a partnership with the cloud giant. He claims the startup is the first hotel technology provider developed on top of Salesforce’s platform as a service offering Force.com.

Hotel Ninjas was founded in September 2012, and has grown to seven employees. Meir is the former vice president of product at BudgetPlaces.com, an online travel agency.

To continue its momentum, the company will need to win over customers from more established vendors in the space, including Micros.com’s Opera Property Management software and Medallia.

But Meir believes that Hotel Ninjas has an edge over its competition with its customizable CRM and integration with hotel booking websites. “At the end of the day, the one thing that matters to hotel owners is how they can increase occupancy and revenue,” he said.

The founders have poured their own money into the startup, buttressed by grants from the Spanish government. In total, they have raised about $100,000.

Top image via Shutterstock

That means that yes, at some point you’ll be able to run your little WordPress-powered blog on the biggest server farms on the planet. But it also means that major companies will be able to use Google’s famously reliable services to run their enterprise-scale “big data,” backend, and, yes, consumer web projects, all in the PHP language that that is increasingly penetrating corporations.

I talked to one of the three founding fathers of PHP and current Zend CEO, Andi Gutmans, about the implications for PHP.

It’s a busy time for the Gutmans, the open-source programming language, and Zend, the company Gutmans formed to offer commercial support and tools for PHP. Engine Yard just recently added PHP to their Platform-as-a-Service as well. And Zend is expanding quickly in the enterprise as it has recently released integrated development tools for cloud-enabled mobile applications.

But Gutmans, though busy, is thoroughly upbeat.

And for good reason: The biggest web company on the planet just added support for the most widely used programming language on the planet. And in that support is a massive implied compliment to PHP — the first non-Google programming language to be supported by Google App Engine — and a potentially major boost to Zend’s business.

VentureBeat: Did Google talk to you before adding PHP to Google App Engine?

Source: John Koetsier

Andi Gutmans at ZendCon 2012.

Andi Gutmans: I don’t know how to answer that. I was aware that they were going to make that announcement … I’ve worked with the product manager on the project before.

VentureBeat: Google didn’t formally brief you?

Gutmans: Let’s put it this way: It’s not a surprise that a platform-as-a-service (PaaS) player that’s serious about gaining market share added PHP support. Google App Engine was almost a science project for the first few years, only supporting languages that Google used internally.

But in the past few months, there’s been a real attitude from Google that we’re going to go and compete with Amazon and with Microsoft, and we’re going to do it all fronts. They’ve become very aggressive on differentiating on performance and billing.

VentureBeat: What does this announcement say about PHP?

Gutmans: We have internal jokes about PHP’s web penetration and have used the stat that PHP runs 39 percent of the web because it was the only number we could get from Netcraft.

But I love Google’s stat, that 75 percent of the web runs PHP. No one knows the web better than Google.

If they’re trying to gain market share and gain it quickly, there’s no other language to do it with. And this is the first non-Google language they’re supporting.

VentureBeat: How’s that feel? And how are your customers reacting?

Gutmans: I’m definitely excited about it.

When any player does something like this — especially Google — it’s a huge validation. We got emails from some of our largest customers, saying this is great … it gives our enterprise customers a higher sense of confidence. And that stat that 75 percent of the web runs PHP is great for Zend – anything that is good for PHP, by proxy is good for Zend.

In addition, they said that PHP was their top-requested feature, which means the developer community was very supportive of us.

VentureBeat: Will you offer Google App Engine Support within Zend Studio, so developers can publish to Google right from within their Zend development environment?

Gutmans: We don’t know yet … it’s early and we’re exploring what kind of relationship we can have with Google.

We do support Google Compute Engine — that’s a full integration and some of the larger companies who run PHP already use it — but Google App Engine is just launched, it’s still in experimentation mode.

VentureBeat: What took Google so long to add PHP support?

Gutmans: I can’t speak for Google, but my assumption is that I felt that Google App Engine in the first few years was something they knew they wanted to do really well but … they kinda went down the simple easy route.

But we’ve seen a significant acceleration in the past 12 months. This will be a $20 billion market by 2016, and they moved from testing the waters to being very very aggressive right now.

We recently surveyed 5,000 PHP developers, asking them where in the cloud do you think you’ll deploy. Fifty-one percent said Amazon Web Services, but Google was 21 percent … and we just support Compute Engine right now.

It wasn’t even on the list last year, so that’s a big jump.

VentureBeat: What does this mean for the little guy building in PHP or hosting a WordPress blog?

Gutmans: I think it gives another option for the guys who do the small stuff, who are using shared hosting for $20/month.

What’s really great for the small developer is that it’s a nice value proposition — you can start at a lower cost. And, it’s a modern platform versus shared hosting, which is quite constrained.”

VentureBeat: So what does this mean for PHP overall?

 Gutmans: The number of requests that Google got from developers was very very significant. It exemplifies what we’ve been talking about … that PHP is very broadly adopted, but also by enterprise.

And that is driven by web, mobile, and cloud, which is where PHP’s sweet spot is. We’re seeing a strong tailwind behind us.

---

Big Data and Predictive/Real-time Analytics startups: Are you looking to jumpstart development & accelerate market traction? Sign up for the SAP Startup Focus program to receive technology, support, resources and community to help you develop new applications on SAP HANA, a cutting edge database platform. Get started here, and enter promo code “VB2013″ on the form.

---

Want to call your doctor but can’t abide that awful 1970s call center system and the hour-long wait?

Patients need a better way to communicate with their physicians, and Ringadoc believes it can help. Investors agree; the San Francisco-based startup added another $700,000 to its seed round today, bringing its total funding to $1.9 million.

Startups like One Medical are taking on some of the biggest challenges in health care. But sometimes the right approach is to start small and focus on one specific problem. Ringadoc is laser-focused on building simple tech to bridge the communication gap between doctors and patients.

Ringdoc helps doctors separate personal and professional messages, and enables them to triage patients before speaking to them on the phone or in person. In addition, physicians can access after-hours calls on a smartphone or tablet device anytime through the answering service.

Ringadoc initially developed and launched an app that let patients record video messages ahead of a virtual visit with a physician. But the company has dropped video for now and shifted to phone consultations.

“Ringadoc reduces the human error associated with costly answering services and live operators by allowing the doctor to hear the patient’s issue in their own voice and words,” said CEO and co-founder Jordan Michaels (pictured above, right, with co-founder Micah Grossman).

Michaels said that conversations between patients and doctors are “an instrumental part of the health care conversation” and were “previously overlooked.”

The company claims its cloud-based answering service has now successfully handled over 100,000 calls for practices across the country. The business model is also clear and simple; Ringadoc charges physicians $49 per month.

Investors include Ryan Howard, CEO of Practice Fusion, Sharon Knight, co-founder of One Medical, the chain of concierge primary care practices, Siemer Ventures, Telegraph Hill Group, and Dr. Lyle Dennis, the neurology chief at Bon Secours Health System.

This is a guest post by David Chao 

It’s a brave new world for healthcare organizations. Hospitals and other providers are teaming up to form Accountable Care Organizations to take a coordinated, community-level approach to health care.

Health insurance companies are no longer passively paying off claims, but are becoming active managers of their policyholders’ health. Providers and payers are having to change what they do and how they do it.

This requires the use of technology to ensure a free flow of information across clinical and non-clinical systems and across legacy, cloud, mobile, and personal device platforms. As the number of systems increase, this integration challenge will only grow.

How can organizations successfully meet this integration challenge?

1. Eliminate point-to-point integrations

All too often in the past, health care organizations have built custom point-to-point integrations between systems, creating a tangled web of connections. Businesses should instead turn to an integration platform that provides a common interface for all systems.

2. Leverage learnings from other industries and adopt a best-of-breed systems approach

Experience from other industries tells us that sharing data through a single, inflexible system is doomed to failure (contrary to what what some heatlhcare vendors would have you believe). Instead, loose coupling of “best-of-breed” applications has proven to be a far more effective model. Initiatives such as the CommonWell alliance and the SMART API platform are on the right track, but more must be done to push healthcare IT vendors to open up their systems.

3. Be pragmatic 

It seems that as a response to outdated technology in healthcare IT, there is a tendency to over-engineer solutions. As Facebook’s Sheryl Sandberg said, “done is better than perfect.” Case in point: the 10+ years it took for the HL7 v3 healthcare messaging standard to supersede HL7 v2. For many, v3 is now so bloated that it’s impractical. At the same time, use of v2 is so deep-seated that it can’t easily be replaced. Low-tech examples can be very successful, as we see from the adoption of DIRECT protocol (essentially secure email), and the popularity of the secure e-fax feature in Doximity’s doctor platform. When it comes to solving healthcare interoperability challenges, done is certainly better than perfect.

As we’re all well aware, when it comes to technology, the healthcare industry is struggling to play catch up. The HITECH and Affordable Care Acts have provided a real catalyst for change, and it is up to all of us who work in the healthcare space to ensure we work together to deliver on this promise.

David Chao is a Product Manager at MuleSoft where he leads MuleSoft’s healthcare business. In this role, he works with providers, payers and government bodies to improve patient outcomes and lower costs by solving the challenge of interoperability across healthcare systems.

“Enterprises’ need for public cloud is much different than startups,” Newvem CEO Zev Laderman told me yesterday. “Azure is exactly the perfect extension of the data center.”

Newvem is well-known for its Amazon Web Services offerings, offering startups optimization services, security checking, and overall cloud management — including the first-ever iPhone app for managing your cloud services. Now, Laderman said, the company is returning to its roots in enterprise with a similar offering for Azure. It’s the fruit of an 8-month effort, and it’s a signal that Microsoft’s cloud offerings are hitting a needed an lucrative market niche in a way that Amazon is not.

“Azure is a billion-dollar business,” Laderman says. “Azure is Microsoft’s best-kept secret in the enterprise.”

Newvem’s new offerings on Azure include visualization of your cloud costs, inventory, and usage trends, methods to create dynamic views of your cloud usage and align them to business objectives for very granular optimization recommendations, and pattern-recognizing tools that identify and highlight consumption patterns, such as regular peaks, bursts, and trends.

Private beta participant Linkury agrees, saying that Newvem for Azure gave the company “visibility into specific Windows Azure inventory that we use,” and that “it’s a great time-saver and has helped us to better plan and forecast our usage.”

Source: Newvem

Your cloud dashboard.

The lure of Azure, according to Newvem, is that Microsoft is already huge in the enterprise, and corporations can seamlessly move workloads between owned servers and cloud servers as required. So a company that begins a speculative new project can start serving its computing needs on Azure and then, once workloads stabilize, move the workload into the corporate data center.

That helps enterprises be as nimble and quick to market as startups, since projects can begin immediately without the need for purchase, installation, and configuration of owned hardware and software solutions. But it also enables enterprises to manage costs effectively. If the project isn’t successful, there’s no unused hardware left lying around. If it is, and if via Newvem’s optimization offerings IT management determines that costs could be lower in the data center, projects can easily be moved back inside the four walls.

To Laderman, that’s a key differentiator between Amazon and Azure.

“That’s important for Microsoft,” he says. “They win both ways, because they’re both in the cloud and in the enterprise.”

Source: Newvem

Your cloud utlization heatmap.

Microsoft is very “partner-centric” and has been a key supporter during the 8-month project, Laderman says, especially Bill Hilf, Microsoft’s general manager for Azure.

Microsoft is supporting Newvem in its enterprise marketing channels, will put Newvem’s solution in the Azure store, and will help Newvem go to market via joint sales efforts … all indicators of Microsoft’s commitment to deploying its cloud solutions in the enterprise, and partnering with companies who have complementary services.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Cameron Peron is VP Marketing at Newvem, a cloud operations optimization service.

Amazon has launched a series of local Amazon Web Services summits across in key cities across the world. Capitalizing on the re:Invent conference in November of last year, the AWS summits are a great forum for local AWS users to learn about featured AWS services and meet partners exhibiting at the event itself.

The AWS Summit in San Francisco a number of days ago lived up to this expectation. Here are 5 insights from Amazon senior VP of web services Andy Jassy’s keynote, and the exhibition itself.

It’s all about the enterprise

Adoption of the public cloud by the enterprise was a key message through the introductory keynote.  In sharp contrast to the keynotes delivered in re:Invent in November, Andy Jassy emphasized the public cloud as part of an enterprise’s IT and cloud strategy as opposed to a complete alternative to on-premise and virtual private cloud.

Andy highlighted use cases of AWS services that the enterprise can use to both move workloads to the AWS cloud as well cooperate between on-premise and AWS environments.

Security = priority #1

Jassy stated that AWS is committed to providing a secure public cloud, highlighting the addition of advanced security controls, certifications and accreditations.

No doubt this was a direct message to enterprise level CIOs that are considering moving small variable workloads to the public cloud, but need to deal with security and compliance risks that run deep into their respective organizations.

Redshift, redshift, redshift

The keynote contained many use cases and examples of using AWS RedShift, a data warehousing and data analysis solution.

Based on an hourly pricing model, RedShift enables AWS customers to analyze large volumes of data with their existing business intelligence tools.  The RedShift use case was a common theme throughout Andy Jassy’s address, use cases delivered throughout the keynote, and breakout sessions. RedShift follows in the footsteps of enriched AWS services such as OpsWorks and Trusted Advisor.

Cost is still the driver for onboarding new business

Throughout the keynote Jassy championed many organic AWS services, as well as solutions provided through the AWS Partnership Network that enable companies to scale once on the AWS cloud.  Despite this, low cost is still king.

Just as Werner Vogel discussed cost savings in the beginning of the New York City keynote, Jassy emphasized that AWS lowered prices 31 times in the absence of competitive pressure to do so.  In line with the success of the Amazon.com model, Jassy implied that that AWS will continue to reduce prices.

Jassy also offered examples of customers reducing costs by using solutions beyond EC2, highlighting that Foursquare reduced their analytical cost by 50 percent with AWS.

Launch of the AWS Certification Program

Jassy also shared the launch of an AWS program that certifies solutions architects, SysOps Admin, and developers.

To qualify, applicants must complete an exam that covers both proficiency in AWS as well as general IT knowledge and experience.  The program should complement and reward AWS users who have championed both onboarding and scaling AWS within their organizations by mandating and regulating their skill sets throughout the career.

In other words DevOps and other AWS users can add AWS certification alongside experience and proficiency in code, such as Ruby and Python.

Cameron Peron is VP Marketing at Newvem, a cloud operations optimization service designed for cloud users. Offering a business view into a company’s public cloud operations, Newvem actively tracks cloud health in order to help reveal and solve cloud irregularities related to cost, security, utilization and availability.  Follow Cameron at @cameronperon

Ubalo announced the acquisition on its website, saying that the company was founded to focus on making large-scale computing easier and that after fruitful collaborations with Twitter’s infrastructure team, the two agreed to come together.

The startup was working on simple ways of scaling code beyond single machines. Using the Ubalo infrastructure, developers could write code for multiple machines with no additional overhead, using the same tools, languages, and libraries that they would ordinarily use for single-computers applications. Case studies that the team published include reducing image processing tasks from eight hours to five minutes using 100 processor cores on Amazon S3 and using Ubalo to generate 8GBs of data by drawing one billion samples from a set of data and computing sample averages, all in just .7 seconds.

Ubalo achieved this by creating modular “pods” that run calculations in replicatable environs you set up once and can run anywhere as well as APIs and messaging protocols to keep all the calculations in sync, and data management techniques to access, manage, and store gigabyte-sized data files.

The startup’s name, Ubalo, means “counting,” according to the site, and it had just four employees including the founders.

Here’s the team’s announcement:

We’ve got some exciting news: The Ubalo team is joining Twitter. In early 2011, we started Ubalo to make large-scale computing easier and more accessible to a technical audience, and we’ve had a great time working with our partners and customers on a number of interesting products. When we met the infrastructure folks at Twitter, we realized that it’s a company with brilliant people, strong momentum, exciting challenges and a promising future. We quickly became enthusiastic about the possibility of collaborating with them and the impact we could have there.

A few days ago, Twitter agreed to acquire our technology and we agreed to join their staff. We look forward to working with Twitter in the years to come.

Thanks for your support and interest in Ubalo!

— Jacob Mattingley (@jem_nz) and Ian Downes (@ndwns), May 9, 2013

It seems to be more than simply an acqui-hire, as Jacob Mattingly, whose Twitter account says “I like making complex things simpler,” tweeted that his startup’s intellectual property was acquired. Cofounder Ian Downes apparently just started using Twitter today and has only one tweet — a retweet of Twitter Engineering’s tweet — to his credit.

Twitter, of course, can always use top-notch expertise on its infrastructure teams. The company’s days of fail-whale adventures seem to be in the past, but with a continuously growing network of users and new services like Twitter #Music, among others, there’s a strong need for ongoing talent acquisition.

Ubalo was based in Palo Alto, Calif., and was funded by Harrison Metal.

NetSuite, the cloud financial software company, has just told the world its latest good news: It has acquired OrderMotion, another cloud company that specializes in order management.

The terms of the deal were not disclosed.

“We focus on the order at NetSuite,” said NetSuite CEO Zach Nelson in a recent VentureBeat interview. “Order management is at the heart of our transactions. … The transaction at the center of the business process is defining big winners.”

Of course, NetSuite already has its own order management system, but in a statement on the news, the company said it was a “important and complex business challenge” requiring outside augmentation to meet their customers’ needs, which range from e-commerce to brick-and-mortar retail to telemarketing.

NetSuite will be using OrderMotion’s technology for continuity and replenishment, as well as supporting direct response marketing efforts. The resulting product, the companies say, will be useful for almost every kind of business, from B2B, B2C, and retail use cases to wholesale distribution and manufacturing.

Order management is a great compliment to NetSuite’s commerce-as-a-service platform, which it launched last year to help any kind of company attain Amazonian online retail goals.

“We’re transforming how your business operates and how your business interacts with other businesses,” said Nelson at that time. “Customers want to transact with several different devices and they want you to remember them across devices.”

Image credit: nadja_robot/Flickr

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Box‘s Aaron Levie and GoodData‘s Roman Stanek [above] have already joined forces in making business software sexy. The young CEOs are often lumped into articles about the rise of the “enterprise cool kids.”

So it would seem somewhat inevitable that the chief executives would form a partnership. And today, the companies released a new product dubbed “GoodBox.” Box customers can now visualize relevant data to better understand the effectiveness of their teams.

GoodData claims that it will also be easier for customers to monetize their content. GoodBox can be used by execs to identify behavior common to high-performing individuals, and apply the insights to optimize the whole sales or marketing team.

“Eventually, we expect to be able to provide predictive solutions based on the information GoodBox is gathering for us,” said Damian Fasciani, a technology services manager at REA Group, and one of the first customers of the new product.

Source: Sean Ludwig/VentureBeat

Box CEO Aaron Levie

“It’s a win for Box as their customers will be engaged, and it fits into our vision to organize an enterprise’s data,” said Stanek, GoodData’s CEO.

Stanek told me in a recent interview at the VentureBeat office that the company makes about 50 percent of its revenues through white-labeling its products. Rather than build their own “big data” analytics tools, software as a service vendors like Zendesk can opt to embed GoodData. “This is the new cloud integration model,” he explained.

Indeed, rather than engage in the so-called “cloud wars,” Stanek said his strategy is to forge partnerships with vendors in related categories. ”I am playing nicely with Box and Amazon Web Services,” he said. “This is how you succeed in the new world of enterprise software.”

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

It’s become far easier for ed-tech startups to sell software to schools.

With this shift, a number of new companies have experienced rapid adoption in K-12 school districts. Netchemia, a startup providing talent management tools, claims more than 1,100 K-12 school districts and institutions in 42 states use its services.

The Kansas-based company says it makes easier to recruit, hire, and retain the best teachers and administrators. Today, Mainsail Partners invested $6.5 million to fuel revenue growth by expanding its sales and marketing efforts.

Mainsail Partners’ Jason Payne said by phone that the firm sees a major opportunity in “teacher evaluation and performance” software. Payne has kept an eye on the company for three-and-a-half years, and believes it’s reached an “inflection point” in which it makes sense to invest.

Mainsail specifically invests in bootstrapped companies, meaning they have not taken external funding. This is Netchemia’s first institutional round.

“Developing the best teachers and school leaders is fundamental to improved schools and high student achievement,” said Netchemia CEO Carlos Antequera. “It is a key part of our current national discussion over education.”

Asana, the startup that helps individuals and teams get tasks done, has its eye on the prize: large enterprises.

Asana’s team [above] has found that its workflow management tools are popular with small groups of professionals in companies of all sizes. Asana claims its used by thousands of teams to generate over 55 million tasks, and 85 million messages.

But not every task can be completed by small teams. So today, the company has launched its “organizations” service, which is ideal for companies that require greater visibility across hundreds of teams, and thousands of employees.

The San Francisco-based company is the brainchild of former Facebook employees Dustin Moskovitz and Justin Rosenstein, and was founded in 2009. Originally geared to consumers, Asana’s adoption has grown rapidly, and its mobile and web-based products are used for both personal and professional tasks.

In a phone interview, Rosenstein said the company’s strategy is an “easier sell” than “wining and dining a CIO.” Asana can demonstrate how several teams within the marketing or sales departments are already using the product, but they aren’t communicating with each other.

Business operations lead Kenny Van Zant explained that unlike most companies who offer a free or premium service, Asana is intended to be flexible. Individual employees or teams of under 30 people can still continue using the free version. But for those that make the switch to the ‘organizations’ product, you can now:

• Create an account with your company email address, and you’re automatically added to the ‘Organization,’ and can view what other teams are up to in your browser. It’s a bit like Facebook verifying students with a “.edu” email. This new feature makes it easy for a new employee to get set up.
• Automatically create and name a new team, and invite anyone from the organization. Each team has control of its membership (similarly to a Facebook event, teams can be hidden, made available on request, or public within an organization).
• View a single, unified inbox and task list if you belong to multiple teams.
• Enable IT to create admin accounts to view user activity, set security and access policies, and centralize billing.

Asana has pulled in $38.5 million in venture financing and doesn’t intend to raise another round anytime soon, according to Rosenstein. The startup has grown to 40 employees.

Top image via Asana / Facebook Page

Amazon stock is up down $10 in after-hours trading today as the company reported first quarter sales that grew 22 percent to $16.07 billion — and income that decreased 37 percent to $82 million.

It’s like the opposite of Winston Churchill’s Battle of Britain quote: Never were so many products sold for so much money by such a huge company for so little profit.

For years, Wall Street has been giving this company a pass for never-ending promises for the future — essentially, startup style economics and pricing — and it still is, 16 years after Amazon was founded. While sales grew to $16 billion, free cash flow decreased 77 percent to just $177 million. Part of the reason for that, of course, is Amazon spending $1.4 billion on corporate office space and property in Seattle. The quarter’s income of $82 million compares to the year-ago quarter’s $130 million — already not a huge amount of profit for sales in the mid-teen billions.

But there is a considerable amount of truth that Amazon is still very much in land-grab mode. And the company’s earnings press release highlighted that aspect.

In fact, a full 12 of the 15 highlights Amazon chose to feature in its earnings release are related to digital content, cloud services, and Amazon’s vehicle for delivering that content and services, the Android-based Kindle Fire. And Amazon CEO Jeff Bezos’ first quote in the release is about content — television content, no less:

“Amazon Studios is working on a new way to green light TV shows. The pilots are out in the open where everyone can have a say,” Jeff Bezos, founder and CEO of Amazon.com. “I have my personal picks and so do members of the Amazon Studios team, but the exciting thing about our approach is that our opinions don’t matter. Our customers will determine what goes into full-season production. We hope Amazon Originals can become yet another way for us to create value for Prime members.”

Interesting.

Guidance for the future is not much better, with Amazon CFO Tom Szkutak saying that the company estimates income for the coming quarter at between $0 and $350 million. Which doesn’t really appear to be much guidance at all — a very Szkutakian quality, apparently.

Wall Street, at least seems to be buying it.

For all its vaunted reality-distortion-field capabilities, Apple’s got nothing on this company.

Photo credit: public.resource.org via photopin cc

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

The hottest enterprise startups will take investment from In-Q-Tel, regardless of whether or not they need the cash.

Today, a well-funded enterprise company called Apigee revealed it has taken a highly-strategic investment from the firm. But the details of the deal have deliberately been kept under wraps. It’s a similar story to Huddle, the cloud collaboration startup that had just closed a sizable funding round when In-Q-Tel offered to invest. For the founders and board of directors, it was a no brainer to take the additional check.

Why is In-Q-Tel treated with such reverence by business software providers? It is the investment arm of the CIA and specializes in funding technology that is secure enough for government agencies. It was founded during the dotcom boom when the agency was drowning in data that it needed a secure technology to manage.

Huddle’s exec team took “purely strategic” investment from In-Q-Tel.

“In-Q-Tel is a great stamp of approval on any company, and opens up a huge market,” said Alistair Mitchell, Huddle’s CEO, in an interview. As a direct result of the In-Q-Tel investment, Huddle gained two large customers: the Department of Homeland Security and the National Geospatial-Intelligence Agency.

It’s an ego boost to get a phone call from In-Q-Tel, but more importantly, it’s a direct path to major government customers. In-Q-Tel has had its hands in virtually every enterprise success story, and has invested in a lot of the technology we use in our daily lives.

“Much of the touch-screen technology used now in iPads and other things came out of various companies that In-Q-Tel identified,” said Jeffrey Smith, the former general counsel of the CIA, in a rare interview with NPR. Google Maps is another example of In-Q-Tel-backed tech.

Don’t miss the shortlist of In-Q-Tel’s portfolio investments in the gallery below.

Government customers are also a strong indicator of a company’s commitment to security. According to Mitchell, Huddle won new clients in the health and financial sectors, who viewed the In-Q-Tel investment as proof the product was sufficiently “vetted and accepted by the best.”

In-Q-Tel has invested in cool tech, like this pen that can expedite data entry.

When pressed, Apigee wouldn’t reveal much about its relationship with In-Q-Tel, or the amount of funding it received. The company’s head of marketing Dave Jordan said little more in an interview than they were “thrilled” about the investment and “looked forward to expanding our relationship with In-Q-Tel and its government partners.”

Jordan and the Apigee team view this investment as a sign that it’s core product, an API management platform, will become more of a priority in Washington D.C. Developers can use the platform to build applications that will prove useful to the various government agencies.

Curious about In-Q-Tel’s current portfolio? Here are some of the firm’s most cutting edge investments.

Top image via Adapx

Cloud storage startup Box is pushing into the health care vertical, regulatory challenges and all.

Box’s team has spent a year researching the space and ensuring that the product is HIPPA compliant. The team is aware of the challenges reaching the target market — physicians and health administrators have tread carefully with it comes to new cloud-based technology.

“We want Box to be the cloud solution to manage all content in the health care sector,” said Box CEO Aaron Levie (pictured, above) in a phone interview. Levie lists myriad use cases; physicians can use Box to access your medical information from their iPads, and researchers can use its collaboration tools to share sensitive information.

In fact, over the past year, box sales in the health care industry grew 81 percent. The company claims to have hundreds of customers in this sector, including  Henry Ford Health System, Beaumont Health System, HealthTrust Europe, and Johns Hopkins HealthCare Solutions.

In the past, the most sensitive records were stored on film, tape, and paper charts. But as data gets digitized, hospitals, physician practice groups, software and hardware companies, consulting firms, and affiliated health care organizations are grappling with how to keep it secure.

However, a positive sign for cloud vendors is that doctors and health administrators routinely use tools like Google Drive, Box, and Dropbox in their personal lives but do not use these tools to share patient information. Security breaches at hospitals are an ongoing problem.

For this reason, Levie sees a major opportunity for a highly-secure cloud company to succeed in the health industry. “Basic file sharing is very challenged,” he explained.

And with a health care push in mind, Box made a strategic investment in DrChrono, a tablet-friendly electronic medical record (EMR) provider, and is working closely with the team. This is just one of many partnerships the company expects to strike with health care IT vendors. Other current partners include Medigram, TigerText, Doximity, and HealthTap.

The company has also brought on Missy Krasner, Morgenthaler Ventures’ executive in residence, who was one of the founding members of Google Health. Krasner said a “simple and elegant solution” like Box is often optimal for doctors; a lesson she learned at Google.

“Doctors want the ease and simplicity and horizontal nature of tools like Box and Google Drive,” Levie said in agreement.

Box is also exploring other verticals, such as financial services. While it does not intend to build a full vertical solution for health, it hopes developers and partners will want to team up and use Box’s platform to build more sophisticated applications and tools.

Aaron Levie photo via Sean Ludwig/VentureBeat

Interested in learning more about how cloud companies can jump into health care? Aaron Levie is a keynote speaker at our upcoming HealthBeat conference on May 20 and 21. 

The deal will bring 50 NexGen employees into Fusion-io to help the company expand its products and market in the small and medium-sized business space with data storage solutions that provide the speed and reliability of all-flash solutions, while still participating in some of the cost efficiencies of tradition disk memory.

The two companies had already partnered on storage solutions.

“Many SME businesses have lean IT teams and budgets, making it critical to offer an integrated and affordable entry point for flash powered application acceleration that delivers consistent performance, even under demanding workloads,” David Flynn, Fusion-io chief executive said in a statement.  “The hybrid NexGen solution combines memory attached flash and disk on leading server platforms to provide a system tuned to deliver performance, price, and capacity.”

Fusion-io had just reported earnings earlier today, announcing $87.7 million in quarterly revenue with a net loss of $20 million, and a drop from last quarter of 27 percent and from the previous year’s quarter of seven percent.

But the company has plenty of coin on hand for the acquisition: $355 million in cash and equivalents.

With Fusion-io’s software and NexGen’s hardware, Fusion-io says that it will now provide:

• independently provisionable performance and capacity with a software-defined architecture
• dynamic real-time flash write caching, read caching, and tiering
• enterprise reliability with more than 250 times more data written over the system’s lifetime than SATA and SAS SSDs
• application performance three times faster than SSDs integrated behind legacy storage controllers
• transparent movement of data between high performance and low cost storage media as needed

As part of the deal, Fusion-io is covering all existing stock agreements and vested equity of NexGen employees.

photo credit: Leonardo Rizzi via photopin

Microsoft stock, which is down a penny today, jumped from under $30 to over $31 almost immediately overnight, and has climbed almost 11 percent over the last month. That’s part of a fairly steady rise over the last quarter which has added over $30 billion in value to the company.

According to the Wall Street Journal, Ubben said that Microsoft “is a dominant software company … and in the long term it will win out,” and that in five years, Microsoft’s investments in web and cloud could transform the company into the largest cloud company in the world. Just five days ago, Microsoft announced general availability of its Windows Azure Infrastructure Cloud — a cheaper cloud than Amazon and Rackspace. 

The company has had challenges with Windows 8 adoption which some have blamed for historically slow PC sales in the last quarter, although it is investing more in Windows 8 for tablets and smaller touch devices.

In any case, Microsoft appears to be doing something right. At least, if you can trust Wall Street.

Pearson has acquired Learning Catalytics, a cloud-based learning assessment system developed by two Harvard professors, for an undisclosed sum.

Learning Catalytics’ tools for the interactive classroom were developed and tested at Harvard. Faculty can ask open-ended or critical thinking questions, and students answer on a tablet, laptop, or mobile device.

This helps professors determine which areas require further explanation, so they can automatically group students for more in-depth problem solving. Professors can understand students performance in real-time — even while lecturing.

The news was announced in a company blog post today, with Learning Catalytics’ Eric Mazur citing Pearson’s “global reach” as an attractive quality. According to its website, Learning Catalytics won’t be shut down — it will still be available to current and new customers.

Paul Corey, Pearson’s higher education president, said Lukoff will continue to develop the product in accordance with the company’s product roadmap. In an interview, Corey said he was impressed by Learning Catalytics’ formative assessment platforms, which are “integral to Pearson and online learning growth.”

“”We have no imminent plans to change the brand of the standalone product,” Corey confirmed. But Pearson’s MyLab and Mastering products will be enhanced by Learning Catalytics’ capabilities.

Pearson claims to be the leading learning company in the world; it’s certainly one of the largest and most powerful. But it has been accused of failing to innovate at the pace of the new crop of ed-tech startups. To stay current, the company launched an accelerator program, and makes strategic acquisitions.

The strategy doesn’t always work; as we reported, Pearson-backed Alleyoop shut down in March. 

Learning Catalytics cofounders Mazur and Gary King will continue to consult for Pearson and the third, Brian Lukoff, will join Pearson’s engineering team.

Top image // Shutterstock

Gizmox, a startup making HTML5 and mobile web tools for business applications, has closed a $7.5 million round of financing and selected a new CEO.

The startup offers what is says is a streamlined solution to help companies shift from a traditional client-server to mobile web and HTML5 technologies. Although many consumer applications have already implemented a move to mobile web and HTML5, complex business apps have faced a harder transition.

Gizmox provides an enterprise-class HTML 5 platform using two components: VisualWebGUI, a mobile HTML5 framework for enterprise applications, and InstantCloudMove, which creates cloud-based HTML5 from existing client-server code.

The financing round was led by Atlas Ventures, with participation from Citrix, Consolidated Investment Group, and Maayan Ventures.

With the announcement of the financing round, Gizmox has also named a new CEO, Eugene Kuznetsov, and transitioned co-founder and former CEO Navot Peled to president. Kuznetsov brings a deep background to Gizmox; he was a founder and president of DataPower, a startup that was acquired by IBM. Kuznetsov completed a stint as an IBM executive and also co-founded Abine, an online privacy company.

The addition of Kuznetsov is expected to accelerate the company’s sales and marketing efforts as the transition of business applications to mobile and HTML5 becomes more prevalent.

The $7.5 million of financing brings the total funding raised by Gizmox to $18 million.

Gizmox was founded in 2007 and is based in Cambridge, Mass.

Image credit: Shutterstock

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Salesforce prides itself on its full suite of tools for businesses, but CEO Marc Benioff sees ample opportunity for a startup that is helping brands maintain a consistent presence online.

San Francisco-based Brandcast has kept a low profile but is ready to launch to the public today. Benioff led Brandcast’s seed and first round of financing and is an advisor to the founding team.

Brandcast CEO Hayes Metzger

In a nutshell, the company helps brands create a website, store, or social media profile, and drive traffic to that destination.

Brandcast CEO Hayes Metzger is a former Salesforce platform engineer, and the cofounder of Bandpage, a startup that helps musicians organize their web presence. He bumped into Benioff at a conference several years ago while working at Bandpage, and they kept in touch.

“We started meeting regularly to talk about cloud software and social media,” he said.

According to Metzger, brands were creating “BandPages” despite the fact the service was specifically designed for musicians.

“He [Benioff] pointed out from the beginning that while BandPage was a great tool for musicians, there was also a huge opportunity to do similar things for other kinds of businesses,” Metzger explained.

Brandcast is initially targeting customers that have outgrown self-service tools but can’t afford legacy management software systems. The company is currently in limited beta and is used by Etsy shop owners, authors, filmmakers, and the like.

Interested? Brandcast is offering a free one year subscription for the first 1,000 signups.

Marc Benioff photo via Sean Ludwig/VentureBeat

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Canonical and VMware announced today a partnership that will enable customers to run efficient OpenStack clouds using the two sets of technologies.

VMware is the latest company to throw its heft behind OpenStack, the cloud operating system that kicked off two-and-a-half years ago to enable any organization to offer open source software and services. Contributors to the OpenStack project include IBM, Rackspace, and Amazon.

Canonical’s Ubuntu, one of the most popular OpenStack distributions, will now include the plug-ins necessary to operate with VMware technologies, including vSphere or Vicira NVP. Canonical is a 600-person company that competes with Microsoft on desktop, Citrix, and VMware. “In every part of our history, we are encroaching on other people’s territory — but at the same time, we collaborate on OpenStack,” said Mark Baker, a product manager at Canonical, in a recent interview.

This is a major announcement for the industry — and somewhat of a surprise — as VMware hasn’t always embraced the project. Mirantis CEO Boris Renski wrote in a blog post that VMware is a competitor to OpenStack and should take part in the initiative.

Kyle MacDonald, Canonical’s cloud vice president, said in a recent interview that this is an “astute move” for VMware. “They are taking their enterprise business and partnering it with an open source project to try to get the best of both worlds,” he continued.

McDonald, who has defended VMware in the past, said that customers can now “reuse VMware estate with an open-source stack.” It’s a far cry from a world where “you’re either VMware or you’re not.”

As we reported in January, VMware has recently been getting back to basics with a renewed focus on infrastructure. The company announced it would spin off a separate business unit dedicated to “big data” and cloud.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Microsoft opened its Windows Azure Infrastructure cloud services to everyone today — a sign that the company is both serious about its cloud division and ready to take business away from its big-name competitors. How? To start, Microsoft lowered prices.

Microsoft tested Azure over the last year and believes the product is out of its incubating stage and ready for general availability. With Azure’s infrastructure services, you can add features of the cloud to your existing architecture. Companies like Amazon and Rackspace, however, have already been in the game for some time with their own versions of cloud hosting. And Amazon’s EC2 (Elastic Compute Cloud) has become very popular.

In addition to using your existing cloud infrastructure, Microsoft also says that you can run apps to help you manage your cloud, including SQL Server, SharePiont, BizTalk Server, and Dynamic Nav.

It’s clear that Microsoft is going after other cloud providers. Microsoft specifically names Amazon in its announcement about Azure, saying that it will reduce its prices 21 percent to 33 percent in order to stay competitive. These price drops will affect the computer, storage, and bandwidth components of the Azure product. It will also get a memory boost to, as Microsoft has found test customers to have more demanding workloads than originally expected.

Microsoft Windows Azure general manager Bill Hilf explained in a blog post that Microsoft recognizes “customers have a choice.”

Thus far, Windows Azure has attracted 200,000 customers.

hat tip New York Times; Windows Azure image via ToddABishop/Flickr

Update: This story has been updated with the correct funding amount. It was $1.8 million, not $18 million.

What do Crossfit and RackWare have in common? They both aim to make their customers flexible and agile and get them running at optimal performance.

RackWare is a cloud startup that has raised $1.8 million in its first round of funding.

RackWare has developed a series of enterprise solutions to bring “intelligence and automation to the cloud.” The RackWare Management Module (RMM) helps businesses scale across private, public, or hybrid cloud environments, without changing applications.

As businesses migrate their operations to the cloud, there is a greater need for tools to help manage this infrastructure. RackWare launched in September 2012 with its management software that helps IT teams get the “highest performing” cloud throughout their applications’ lifecycle. The company touts the “mobility” and “elasticity” that RMM brings. The technology makes it easy to scale up or down, depending on demand, as well as disaster recovery.

“Today’s enterprise IT organizations need solutions that allow them to immediately benefit from deploying applications in the cloud within their current environment,” said founder and CEO Sash Sunkara in a statement at the time. “With RackWare Management Module, users can take full advantage of the cloud without comprising their current investment in infrastructure and applications. And once RMM is in place, it is easy to expand use of the cloud to increase cost savings to the business through greater availability and flexibility for application developers and users.”

Sunkara was one of the cofounders of 3Leaf Systems and served as VP of marketing at QLogic’s Network Solutions Division. Her cofounder, Todd Matters, worked on networking at Unisys and IBM and founded SilverSteam. They founded RackWare in 2009 and at the time raised a small amount of angel funding. This $1.8 million is part of an intended $2.67 million, according to an SEC filing. The investors are undisclosed, although VentureBeat has reached out to RackWare for comment.

RackWare is based in Santa Clara, California. Read the filing.

Photo Credit: CrossFit Kandahar/Flickr

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Millions of Malaysian kids will be writing stories, collecting data, creating presentations, and organizing the future of their education in the cloud — Google’s cloud.

Today, Google announced that Malaysia is adopting Google Apps for 10 million students, teachers, and parents. In addition, the country will be shipping an unspecified number of Chromebooks to schools across the country — all part of a national education blueprint to “place Malaysia firmly on the path to development.”

Malaysia has 10,000 schools, and the government’s plan is to equip them all with 4G Internet access, a virtual learning platform, and at minimum a 10:1 ratio of students to computers.

It’s no secret why they’ve chosen Chromebooks: cost. Google says that Chromebooks “yield three-year cost of ownership savings of $1,135 per device compared to traditional PCs or tablets and require 69% fewer hours to deploy and 92% fewer hours to manage.” And it’s also no secret why Malaysia is adopting Google Apps — for educational use, the apps are entirely, completely free.

That’s of course, in strong contrast to its Google Apps for Business, which costs $50 per user per year. Google had originally made that free for businesses with under 50 users, but it quietly killed free access in December last year.

Deals like this put Google in direct competition with Intel, as well as other computer manufacturers. Intel has a global education initiative which has, for example, put computers in the hands of all middle and high school students in Portugal, and focuses on working with local hardware and software producers to create educational laptops, tablets, and software based on Intel’s references designs.

But having been involved in that initiative in a previous job, I can tell you that costs would be much higher than a Chromebook.

Globally, more than 3,000 schools have now adopted Chromebooks, which generally cost around $300-500, although they will cost significantly less in volume, and Google had a Christmas sale last year, offering Chromebooks at just $99.

photo credit: phalinn via photopin cc

The free learn-programming-online site now has 11 modules and 86 lessons in all things PHP, from the basics and the standard if/else logic flow to arrays, functions, and advanced object-oriented programming.

“The future of programming is making a tool for people to demonstrate their creativity,” Codecademy founder and CEO Zach Sims told me a few months ago. “In 2013, we want to extend Codecademy’s reach and help people move beyond beginners.”

PHP is a good start, as the language is simple enough to let beginners get their feet wet while powerful enough to build world-class websites like Facebook. And with over five million PHP developers on the planet, new programmers would be joining perhaps the largest cohort of developers around, with plenty of code help, sample, code, and forums to help them progress beyond the basics.

And with Andi Gutmans and Co. at Zend focusing on bringing the power of PHP to blended mobile applications, PHP skills are helpful not only on the server but also in cloud-connected native app development.

PHP has been one of the most-requested languages for Codecademy to add to its coursework, Sims told me. Just three months ago, Codecademy launched API training with YouTube, NPR, Bit.ly, and six other partners. Now students have one more language, besides the already existing Javascript, HTML/CSS, Python, and Ruby to use them with.

Codecademy’s introduction to its PHP courses:

PHP is the world’s most popular server-side scripting language. Interested in processing form data from your website, creating HTML on the fly, handling cookies, or talking to a database? PHP’s got you covered.

Courses are created by the community. We’re launching PHP as a work-in-progress and we want you to help create the future of PHP instruction for people all over the world.

photo credit: CyberHades via photopin cc

---

Big Data and Predictive/Real-time Analytics startups: Are you looking to jumpstart development & accelerate market traction? Sign up for the SAP Startup Focus program to receive technology, support, resources and community to help you develop new applications on SAP HANA, a cutting edge database platform. Get started here, and enter promo code “VB2013″ on the form.

---

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Does your company rely on mobile workers? If it does, the worker likely is a “+1,” an employee who carries both a mobile device and a tablet And those mobile workers who need to access data may be using a consumer cloud like Dropbox, SkyDrive or Google Drive to get that access.

This mass migration of data to the consumer cloud, however, all happening without much IT oversight and control, may give rise to potential exposure to unknown security risks to the company. If you follow the industry, you’ve seen that there have been data breaches at consumer cloud providers.

The cloud also has given rise to lawsuits. For example, Dropbox was sued in federal court in California in a class action suit regarding alleged data security issues; the case was dropped later that year. And LinkedIn, a cloud provider of a different nature, was sued in federal court in a proposed class action arising out of an alleged hack, although it recently won a motion to dismiss the action.

Sony’s PlayStation Network, another form of the cloud, was hacked, allegedly facilitated by another cloud provider, and Sony was sued both by consumers and some of its insurance companies. Sony’s general liability insurance company, Zurich American Insurance Company, then added insult to injury by suing Sony rather than providing coverage. Zurich has asked the court to rule that other Sony insurance policies would cover the claim before Zurich’s policy, in addition to asking for rulings that Sony’s general liability insurance policies do not provide coverage for the data breach claims.

So what kind of risk do companies face when their mobile workers are using the cloud, and will their insurance cover cloud-based risks? Let’s take a look.

What are the risks?

There are two general categories of risks and potential liabilities for users of the cloud: first-party risks and third-party risks. Generally speaking, first-party risks include lost income or business because of a cloud outage, the inability to access the cloud, or lost data. Third-party risks include the cloud user’s potential liability to customers or to various governmental or regulatory entities. These potential risks include lawsuits or claims from third parties resulting from a data breach or other cyber event. Other risks, which may be seen as both first- and third-party costs, include the costs to provide notifications after data breaches (if those costs are not the responsibility of the cloud provider), payment card industry (PCI) liabilities, and other data breach- and privacy-based costs.

Will your insurance cover the risks?

When considering a move to the cloud, give thought to one of your company’s most important assets – its insurance policies. The importance of time spent with your broker and outside insurance coverage counsel to discuss and understand the potential scope of coverage under your company’s insurance policies as it relates to cyber and privacy risks is amplified when thinking about moving to the cloud.

The best place to start this analysis is, first, by reviewing your company’s cyberinsurance policy. (Haven’t bought a cyber insurance policy yet? Click here for some helpful tips for when your company does consider purchasing that type of insurance policy.)

Next, take a close look at your company’s entire portfolio of insurance policies. Coverage may be available under traditional forms of insurance such as commercial crime, first-party property, and commercial general liability (CGL) policies. Regarding commercial crime policies in particular, the U.S. Court of Appeals for the Sixth Circuit found coverage for a data breach (though not necessarily related to the use of the cloud) under a computer fraud endorsement to a crime insurance policy for certain costs relating to a data breach. Also consider whether business interruption or contingent business interruption coverage within a first-party property insurance policy would provide coverage for a cloud-based interruption.

Companies should not assume that their insurance companies will agree that coverage for cyber risks related to the cloud is provided by so-called traditional forms of insurance. To protect against such risks, companies may look to cyber insurance policies that are marketed expressly as providing coverage for cyber-related loss.

What should companies look for when considering insurance for cloud-related risks?

Cyber insurance comes in many forms and variations. This growing insurance marketplace has led to a variation in forms and coverages being offered by insurance companies.

1. Look at whether cloud computing is covered specifically, and, if not, how broadly the coverage is written.

In the past, it was rare to see cloud computing in a cyber insurance policy, but now certain insurance carriers have started using that term in their forms. If the insurance policy specifically references the cloud, determine whether any special terms and conditions apply. Consider whether there are specific exclusions or coverage limitations specific to cloud-based risks.

For those policies that do not use the term “cloud” or “cloud computing” specifically, pay close attention to terms such as “network” or “computer system,” as those terms may affect directly the scope of coverage for cloud-based risks. Also, pay attention to limitations on the use of outsourcing, vendors, or other third-party service providers. Those terms may be written in a way that could encompass the outsourcing of hosting or support. If so, the insured should have a strong argument that cloud services are covered.

2. Determine whether sublimits and deductibles or retentions apply to cloud-related risks.

Modern insurance policies typically have limits of coverage that apply, capping the total amount of insurance that is available under the policy. Some policies have sublimits. Policies that contain sublimits of coverage may result in lower insurance policy limits being available for certain risks or types of claims. For example, an insurance policy may have a total policy limit of $10 million, but a sublimit of $5 million for cloud-based claims.

Also note that certain insurance policies have deductibles or self-insured retentions that apply to cloud-based risks. If so, that could limit the total amount of true coverage available for claims.

3. Consider the geographic scope of coverage.

Some cyber-security insurance policies, like first-party property insurance policies, may contain coverage based on events or incidents that take place in a certain territory, such as the United States, or for events or incidents that take place within a certain distance from the policyholder’s place of business. Considering the geographic limitations of a cybersecurity insurance policy is critical, in light of cloud providers and other vendors that may host data and software outside of the United States, as well as the increased amounts of global travel for company employees.

For companies based outside of or doing business outside of the United States, consider the issue in reverse: will the insurance policy cover any risks related to data sovereignty issues for countries outside the United States, for data hosted inside the United States (and outside those countries’ borders)?

4. Consider the scope of coverage for first-party risks relating to the cloud.

Companies should pay close attention to the scope of insurance coverage afforded for first-party losses relating to the cloud. If the company is unable to access the cloud for data, applications, or other purposes, how will the insurance apply?

Would another insurance policy, such as a first-party all risks insurance policy, apply if the risk was based on a weather-related incident? Would the cybersecurity insurance policy apply if there was a denial of service attack at the cloud provider? How long must the service be unavailable before the insurance policy provides coverage, and must the outage be continual?

5. Analyze the terms and conditions of contracts with cloud providers.

Companies also should look carefully at their contract with their cloud provider to understand what it will and won’t do for them in case of future issues. Cloud users should consider which company bears the risk of a data breach, and how much liability is transferred or retained for first-party risks, such as cloud unavailability. That knowledge will help companies in their risk transfer processes.

Scott Godes is an attorney with Dickstein Shapiro LLP. He is the Leader of the Intellectual Property Insurance Practice within the Insurance Coverage Group. He devotes a significant portion of his practice to representing corporate policyholders and insureds in complex disputes with their insurance companies. He also counsels policyholders regarding risk management and insurance coverage issues. He may be reached at godess@dicksteinshapiro.com. Mr. Godes also writes the award winning Corporate Insurance Blog and is on Twitter @insurancecvg.

Image credit: The Geffen Company

---

Big Data and Predictive/Real-time Analytics startups: Are you looking to jumpstart development & accelerate market traction? Sign up for the SAP Startup Focus program to receive technology, support, resources and community to help you develop new applications on SAP HANA, a cutting edge database platform. Get started here, and enter promo code “VB2013″ on the form.

---

In the two weeks leading up to RSA, a major security conference in San Francisco, corporate giants such as Microsoft, Apple, Facebook, Twitter, The New York Times, and others admitted that they were hacked.  Cyber attacks are wreaking havoc on nations, businesses, and consumers alike. But just the fact that people are paying attention might be a bright spot in our fight against this adversary.

President Obama stated that cyber-crime itself is a $1 trillion problem. Even if the amount is only in the hundreds of billions – Sony alone incurred $171m in damages related to its 2011 PlayStation Network breach – it is clear that the threat is at an all-time high.  The “bad guys” are more organized and better-funded than ever before, and their methods of attack are growing more and more sophisticated.

The good news, it seems, is that chief security officers (CSOs), chief information officers (CIOs), and more importantly, chief executives and corporate boards, have finally moved from denial to rage to facing up to the magnitude of the problem.

Industry leaders are recognizing that traditional approaches, technologies and solutions are insufficient. RSA Chairman Art Coviello, for example, acknowledged the shortcomings of the standard firewall and intrusion detection/prevention systems when he said “perimeter-based security reached its limits.”

As a partner at venture capital firm Jerusalem Venture Partners, which focuses on investments in cyber-security in a country known for its cyber-prowess, I watch developments in the industry very closely in an effort to locate the startups that can address security problems as they emerge – in what seems to be a dizzying pace.

What I see is that the industry does seem to be rising to the challenge in an effort to provide better solutions for governments, enterprises, and consumers. But those answers are not necessarily coming from established security vendors and so aren’t surfacing as quickly as they should.

A new favorite attack vector: BYOD

One attack vector being used more and more by hackers is through our mobile devices. Smartphone sales surpassed PC sales two years ago and, according to industry sources, 80 percent of employees use personal devices for work purposes. That compares with the 60 percent of enterprises that allow it. This BYOD (bring your own device) phenomenon allows cyber-criminals easy access to contact lists, critical enterprise information, transactions, and credentials.

Many of the current solutions to the BYOD problem rely on problematic rooting, or kernel-level access, or crippled user experience offered by dual-persona or container models. No wonder the winner of the RSA Conference 2013 Innovation Sandbox was a young start-up, Remotium, which tackles BYOD by using a virtual machine to run your “work phone,” which you can remotely access through your personal phone.

Its innovative approach has a real shot at making our smartphones more secure by essentially taking both data and processing to the cloud. Other similarly innovative approaches which attempt to protect our data rather than the personal devices themselves may better equip organizations for the BYOD phenomenon as well as burgeoning trends towards virtual organizations.

The shift to cloud-based enterprise infrastructure and apps creates even more attack vectors. Organized cyber-crime is taking advantage of the cloud and becoming a real revenue source for many rogue organizations. Cyber-attack infrastructure is already offered as a service by many of these groups. For example, botnets-for-hire, or a string of zombie computers used to launch attacks on healthy computers, can create damages in excess of half of a billion dollars a year (especially related to AdClick fraud).

Is anti-virus software cutting it?

What about anti-viruses – the classic cyber-defense? Unfortunately, existing anti-virus solutions has fallen out of favor with many given that it can only block malware it knows. Because it looks at digital signatures and stops those it recognizes to be malware, it misses a lot of the new threats that come through. According to Bret Hartman, CTO of the security technology group at Cisco, organizations have lost control of their end-points. The cat and mouse game is becoming more difficult and expensive to play.

We see many of the most promising end-point security solutions are moving away from signature-based approaches, like anti-virus software, and focusing on heuristics-based or behavior-based white-listing methodologies. While these solutions are not quite ready to take the place of current anti-virus solutions, especially not on the consumer level, they certainly act as a much-needed complement to available protection and will certainly one day vie for a place as the industry standard.

In parallel, industry-wide collaborative efforts helping cyber-intelligence systems to ferret out insidious malware, hand-in-hand with big-data based analytics and solutions are gaining significant ground in this ongoing battle. According to RSA’s Coviello, adaptive machine-learning and predictive analytics based on big-data are the secrets to success.

Where the startups really stand

Interestingly, many of the innovative new solutions being provided today are actually coming from the more nimble and dynamic startups in the field. The problem is, these startups often have a tough time convincing CISOs of their value. Unproven track records and prematurely released enterprise solutions offered by these unknown (and often under-financed or unstable) companies are problematic for large enterprises.

Startups also seem to form in clusters, latching on to the latest buzzwords. This makes it hard to explain exactly how they do things differently.

But none of that takes CISOs off the hook. To succeed in their jobs, they must engage with these innovative startups to help themselves and the industry find the right set of solutions. The enormous scope of the problem and its continuously evolving nature dictates the need to work with innovative startups, side-by-side with incumbent players.

In the end, it takes a global village. As the intensity and ferocity of cyber-attacks continue to grow, the “good guys” must understand that only through a concentrated, collaborative, cross-industry effort can we rise to meet these very serious challenges. Such partnership-based models joining VCs, strategic enterprises, academia and government will allow the industry to create a robust, proactive eco-system which can foster breakthrough technologies and approaches capable of meeting today’s cyber threats — and tomorrow’s. This multi-disciplinary, collaborative approach is the only way to stay one step ahead of the bad guys.

Yoav Tzruya is a partner at JVP, Israel’s leading venture capital firm. Yoav brings more than 20 years of executive-level experience in the IT industry, with extensive experience in cyber security, digital media, and enterprise software verticals.

Happy code image via Shutterstock

---

Big Data and Predictive/Real-time Analytics startups: Are you looking to jumpstart development & accelerate market traction? Sign up for the SAP Startup Focus program to receive technology, support, resources and community to help you develop new applications on SAP HANA, a cutting edge database platform. Get started here, and enter promo code “VB2013″ on the form.

---

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Storage may not be the sexiest space, but it’s catching the attention of Silicon Valley’s venture capitalists.

Mayfield Fund has led an investment in SwiftStack, which helps large companies roll out their provide cloud storage. Mayfield investor Navin Chaddha said the firm has a long history of investing in storage startups; most recently, StorSimple.

Cofounder and CEO Joe Arnold said companies see benefits of using the public cloud, but want to deploy storage on-premise in their own data center. “The reason why is they want more control over their data,” he said. SwiftStack’s software defined storage solution can run on commodity hardware, and is cheaper than building a storage system from scratch.

Arnold and a few other members of the founding team previously worked at San Francisco-based Engine Yard, and built out the first widely used platform as a service (PaaS) products, which ran on top of Amazon. “We had a front row seat to see how the cloud could be used,” Arnold explained.

The current project is based on OpenStack, and core contributors have joined the team. OpenStack is a cloud operating system that kicked off two-and-a-half years ago to enable any organization to create, and offer cloud computing services running on standard hardware.

SwiftStack is attacking incumbent players like EMC and NetApp, but Arnold admits that it’s a “very early market.”

With the funding, the company will expand its sales and marketing team, and continue to build out the product.

Today, the startup closed a $6.1 million funding round led by Mayfield with additional participation from Storm Ventures and UMC Capital, bringing its total funding to $7.6 million.

---

Big Data and Predictive/Real-time Analytics startups: Are you looking to jumpstart development & accelerate market traction? Sign up for the SAP Startup Focus program to receive technology, support, resources and community to help you develop new applications on SAP HANA, a cutting edge database platform. Get started here, and enter promo code “VB2013″ on the form.

---

Pertino, a cloud company that only just came out of stealth mode, has announced a healthy round of funding: a $20 million Series B led by Jafco Ventures with participation from existing investors Norwest Venture Partners and Lightspeed Venture Partners.

The startup actually does something interesting: It explains its cloud technology in very human terms.

All joking aside (and that was an excellent joke if you spend any time reading cloud company website copy), Pertino lets its customers set up cloud-based networks that it says are as powerful and secure as any other kind of enterprise network.

From the site:

Using Pertino, anybody can create a global network with no specialized network hardware or virtual private networks. Instead, they type in their name and password and a network name and invite others to join by sending them a web link. When they’re done with the network, they turn it off. Pertino works now on Windows 7, but support for Macintosh, other Windows clients, and mobile devices is coming soon.

Pertino marketing VP told The Register that Jafco’s participation was particularly crucial as that firm’s relationships in China and Japan would help the startup in its Asian expansion.