Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Leading corporate performance management (CPM) company Adaptive Planning has raised a massive $45 million in its fourth and final round of funding with a goal to further dominate the CPM space, the business said Tuesday.

Adaptive Planning offers a suite of budgeting, planning, forecasting, and data discovery software in the cloud. Its software works for small businesses all the way up to large enterprises, which now represent 25 percent of its business. The company had 1,500 customers at the end of 2012 and it estimates it will have 2,000 customers at the end of this year. Big name customers come from all kinds of industries including Box, Coca-Cola, Johnson & Johnson, Jive Software, NBC News, Nissan, Red Hat, Toyota, and Zipcar.

“We address all of the CPM market — and it’s a huge market,” Adaptive Planning CEO John Herr told VentureBeat. “Most of our new customers move to us from Excel. We help customers upgrade from ‘Excel hell’ to Adaptive.”

Adaptive Planning competes with solutions from Oracle, IBM, and SAP, but its software-as-a-service has made it a leader in its space. And now the company will have more cash to hire more employees, further refine its software, and create more partnerships with resellers.

That last point is particularly important for the company, as it already has a strong reseller network of more than 400 “channel partners.” These partners help sell the product to more businesses and give it better access to international customers. One such partner is NetSuite, which offers Adaptive-based Financial Planning service that is integrated with NetSuite’s software.

The huge new funding round was led by new investor Bessemer Venture Partners (BVP), with participation by existing investors ONSET Ventures, Norwest Venture Partners, RBC Venture Partners, Cardinal Venture Capital, and Monitor Ventures. BVP partner Byron Deeter will join the company’s board.

“The business is on fire and this investment is a strong endorsement of what we’re about,” Herr said. “Many BVP companies are also customers of Adaptive.”

Including the new round, Adaptive Planning has raised about $100 million to date, including a $22 million round a little over a year ago.

Herr said this will be the last round of venture capital funds raised for the company and that it will explore the option of going public “in the next couple years.” He also indicated other “exit opportunities” were on the table. “We’re open to all positive outcomes,” Herr said.

Mountain View, Calif.-based Adaptive Planning was founded in 2003 and has 200 employees. Herr said the company aims to double its number of employees in the next 12 to 18 months.

Businessman with tablet via ollyy/Shutterstock

SAN FRANCISCO, Calif. — Cloud companies like Box and Salesforce have a new sector in mind: health care.

It’s still not clear whether the industry is ready for them.

“Anyone who has to write a check knows the value of cloud computing,” said Joshua Newman, an M.D., who is also the director of product and health strategy at Salesforce, a pioneering cloud technology company and the leader in defining the marketing term “software as a service.” Newman spoke this afternoon on a panel at HealthBeat, VentureBeat’s health-focused technology conference.

Newman said a big part of his job is to communicate the value of the cloud to health providers, and to assuage fears about breaches of sensitive patient data.

In the past, patient records were stored on film, tape and paper charts. As data gets digitized, everyone in the field has grappled with how to keep it secure, including hospitals, physician practice groups, software and hardware companies, consulting firms and affiliated health care organizations.

The federal government recently released statistics that 21 million people had their sensitive health records hacked. This is just the cases that were reported — the actual number is thought to be far higher.

As a result, security challenges have overpowered the benefits of the cloud. Cost-savings and easier software upgrades pale in comparison to leaked health care records. Health providers are treading very carefully.

Newman is convinced that we’ll see increased adoption of services like Salesforce in the coming years. “There are a lot of great examples of how it’s working, and you can see how quickly it’s grown,” he said. “There are emerging standards in health care,” David Chao, a product manager at MuleSoft, said in agreement.

At HealthBeat, we also heard from Box CEO Aaron Levie how the company intends to be an “underlying layer for how content gets stored and shared” for physicians. Recently, Box received HIPAA compliance certification, meaning the product is now considered safe enough to hold on to data about your health — and safe enough for health care developers who use it.

Box and Salesforce are both appealing to progressive CIOs at hospitals and other health providers. But Newman believes it really needs to start small. “Let’s get the ball rolling with small apps,” he said. The hope is that CIOs will then realize the value in these tools.

“Getting into the cloud is not an all-or-nothing game,” said Newman. When it comes to healthcare, he stressed that we can take “baby steps.”

Photo credit: Michael O’Donnell/VentureBeat

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

Andrew D’Souza is COO of Top Hat Monocle

Two years ago, most top-tier VCs would not have touched an education technology company with a 10-foot pole. That’s all about to change – in fact, it’s already changing.

Take a look at some of the recent bets placed by big-name firms on exciting education companies over the past 12 months: Accel with Lynda, NEA with Desire2Learn and Edmodo, Emergence with Top Hat, a16z with Udacity, Benchmark with Minerva and the list goes on.

The education space is massive, very broken, barely touched by technology and has been largely underserved by entrepreneurs and investors. The opportunity for disruption, significant value creation and outsized returns is huge.

Companies that are focused on the education space right now have arguable advantages over their consumer and enterprise technology peers:

Advantage #1: Ability to attract high-caliber talent

With consumer web falling out of favor, top talent is beginning to look elsewhere for career opportunities.

Horizontal SaaS companies may be lucrative in the short-term, but those companies always run the risk of being commoditized by lower-cost providers or outsold by more focused vertical players. More importantly, horizontal SaaS providers can have trouble articulating a compelling vision, which is what the most passionate talent needs to perform their best and why consumer web companies often have an advantage attracting high-profile talent.

Passionate employees can see themselves working for a company out to “make the world more open and connected” than one trying to “transform how businesses operate so they can achieve their business vision”.

Vertical SaaS companies, on the other hand, can present a vision for a particular industry that resonates deeply with those who care about that space. There are fewer industries that draw a more passionate response from a broader swath of the population than education. Almost everybody has a view and almost everybody would jump at the opportunity to have a significant positive impact on the space.

Historically, executives have thought about “getting involved” in education through board affiliations or philanthropy in the twilight of their careers. That perspective is changing as more talented individuals earlier in their careers are realizing that they can build successful, highly lucrative careers while impacting a space they care deeply about (vs. say, hawking daily deals).

Advantage #2: Public interest

Education stories are mainstream. The challenges surrounding student debt, international competitiveness, unemployment and equality are problems that affect everyone, not just those in the education space. If you’re building a company to address these problems in an innovative way, the world wants to know about it and you will get noticed. Outside of Silicon Valley (maybe even inside), I’m willing to bet that more people have heard of Salman Khan than Peter Thiel.

This is a huge advantage ed-tech companies have over every other kind of tech startup.

Like it or not, access to capital, talent, customers and partners is directly affected by the public perception of you and your company in the media. Those who know how to tell their stories appropriately have access to an unlimited amount of public interest coverage and a passionate audience who can’t get enough.

Advantage #3: Market timing

The education system is under attack from all angles. Education outcomes aren’t keeping pace with the requirements of today’s job market. Budgets are continually slashed. Higher education institutions are struggling to remain relevant and justify rising tuition fees in the face of open, free educational resources. The last industry that experienced these kinds of pressures was traditional media, when technology companies who were on the winning side of the disruption turned into billion-dollar businesses seemingly overnight.

If those within the established institutions are smart (and we would hope they are), they will embrace technology as the catalyst for much-needed change. If they ignore the disruption, they’ll face a similar fate to newspapers and radio. Either way, it’s a good sign for those starting companies in the space.

Advantage #4: Word of mouth spread through the industry

Unlike vertical SaaS providers, EdTech companies’ customers don’t compete with each other. Universities are certainly rivals in athletics and are always looking to improve their brand among prospective students, but for the most part, education institutions are collaborative and cooperative. This is even more true in K-12.

If an instructor or an institution discovers a product that improves learning outcomes, they want to spread the word to their colleagues and peer institutions. At the most, they’ll want to be identified as the forward-thinking school which “pioneered” this technology, but overall they’re happy to share their knowledge with others. This is a unique dynamic which exists in education that other enterprise tech companies can’t really benefit from.

Advantage #5: Competitive advantage of outside perspective

Right now, education technology is much less competitive than consumer or enterprise tech. The bar to build better products, execute better and displace incumbents is relatively low.

Historically, many EdTech companies have been started by passionate educators, but haven’t always had business or technical leaders on the founding teams. Their competitive advantages were institutional lock-in and long-term contracts. These structural barriers are disappearing in education, in the same way that the cloud and consumerization of enterprise technology shook the foundation of enterprise software incumbents.

These startups need perspectives from outside the education industry if they’re going to be truly disruptive. Many of the VCs who made great returns on “old world” education companies are too focused on pattern recognition, and they end up chasing after (or worse, forcing their newer companies to adopt) broken business models. Companies rely on their board for outside perspective.

Rather than looking in the rear view mirror to see what worked in education in the past, they should be checking their blind spots to see what tactics worked in other industries which may work for us. Having Gordon Ritter from Emergence on our board has allowed us to learn from what worked at Salesforce, Yammer, Box, and Veeva as they scaled their businesses, and that gives us a competitive advantage over education incumbents who are steeped in their ways.

The investors who get significant exposure to this space in the coming years will see some big wins, while those who continue to shy away will miss one of the biggest opportunities of the decade.

photo credit: sciencesque via photopin cc

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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.

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Could you explain your enterprise technology company to a 13-year-old?

We’re all a bit sick of the “big data” trend, and founders making abstract claims about “answering unknown knowns.” And don’t even get me started on “SaaS,” “Dbass,” and “PaaS” (frankly, they are all a pain in the ass).

So VentureBeat has hatched a crazy plan to banish buzzwords and marketing speak, at least for an afternoon.

At our San Francisco office, VentureBeat invited four CEO’s from various cloud and “big data” companies to talk tech in an on-camera interview.

The catch? The execs would face a grilling from … a group of kids flown in from around the country. We didn’t just want Bay Area natives on the panel, as many of them grew up surrounded by tech. So we contacted an ed-tech startup called Rocket21, which helps young students explore their interests and passions, and they assembled a group.

The kids proved to be straight-talkin’ interview machines (I’d better watch my back; I could be out of a job one of these days) with a keen understanding of consumer technology and mobile apps.

We were gobsmacked when Ella Gillmor, 13, asked Huddle founder Andy McLoughlin about his data center (pictured above, center, with Gillmor and Alexa Stephenson) and if the cloud collaboration tool was “similar to Apple iCloud.” Her dad, Steve Gillmor, works in a senior role at Salesforce.com, so she’s clearly versed in tech. Likewise, 13-year-old Tommy Whiteley asked some tough questions about the Software-as-a-Service business model (“Do you make money by selling to people or companies?”)

It became apparent during the interviews that these tech natives had little patience for jargon. Gillmor prompted Chris Saad, the cofounder of Echo, to explain the meaning of a widget (which Saad aptly described as a “piece of a website that gets put into other websites”).

Alexa Stephenson, a high schooler from Tennessee, asked the founders whether big data is like the movie Fight Club because no one could give her a straight answer, which prompted nervous giggles from the room.

“Um, I don’t know where to start,” Kaggle CEO Anthony Goldbloom responded. “I knew it. It’s the first rule,” Stephenson said.

It’s not easy to explain business intelligence and analytics in such simple terms. Here were some of our founders and CEO’s explanations:

1. On business intelligence and analytics: Birst CEO Brad Peters made a useful analogy to driving a car. ”The dashboard measures how fast you’re moving … [otherwise] it would be hard to drive a car,” he said. “Analytics is the dashboard for a lot of people and business to understand things that are more complex than what’s right in front of you.”
2. On big data: Goldbloom gave it a stab: “Big data is mostly about taking numbers and using those numbers to make predictions about the future. The bigger the data set you have, the more accurate the predictions about the future will be.”
3. On the cloud: “The dirty secret in this industry is that nobody even really knows what the cloud is,” said McLoughlin. “What it means is it’s put up in the Internet and it’s gone to our servers and it’s held somewhere centrally. All it means is it’s a place up there in the sky that is available from all of your devices no matter where you are.”

For further jargon-free (we promise!) discussion, register for DataBeat 2013, the conference about putting data to work.

Kids from VentureBeat on Vimeo.

ChannelAdvisor provides software-as-a-service solutions to help retailers and manufacturers integrate, manage, and optimize their merchandise sales across hundreds of online channels, including Amazon, Google, eBay, Bing, Groupon, and Facebook. Customers can build customized solutions or use the “managed services” for help implementing campaigns.

“The e-commerce market has grown significantly over the last several years, as consumers have increasingly shifted their retail purchases from traditional brick and mortar stores to online stores and marketplaces,” the company said in the filing. “This trend has created many opportunities for retailers and manufacturers, but at the same time has resulted in additional complexity and challenges. Retailers and manufacturers seeking new avenues to expand their online sales must manage product data and transactions across hundreds of highly fragmented online channels where data attributes vary, requirements change frequently, and the pace of innovation is rapid and increasing.

The filing also cited a Forrester report that found online consumer spending is expected to increase to $1.1 trillion in 2016, which will grow the need for tools that help merchants navigate the “complex and fragmented” market. ChannelAdvisor’s software supports the full spectrum of e-commerce vendors, including marketplaces, paid search providers, companion shoppers, flex feeds, and social shopping companies. Services like inventory management, reporting and analytics, and content optimization help vendors get the most of their online sales.

According to the S-1, ChannelAdvisor had over 1,900 customers worldwide as of December 31, 2012, and in 2012 alone its customers processed over $3.5 billion in gross merchandise value through the platform.

ChannelAdvisor was founded in 2001 and has raised $75 million to date. Investors include eBay, Advanced Technology Ventures, Kodiak Venture Partners, Southern Capital Ventures, and New Enterprise Associates. ChannelAdvisor is based in North Carolina.

ChannelAdvisor S-1

Photo Credit: ChannelAdvisor Facebook 

That’s impressive growth, and it’s along the lines of other top software-as-a-service players who are household names in Silicon Valley and beyond.

“We’re kinda matching Zendesk and Evernote in user growth curve,” HootSuite CEO Holmes told me this morning. “Our progressive cycle to each additional million is getting shorter and shorter, which is a good thing.”

The Vancouver-based company, which counts 79 of the Fortune 100 as its clients, also continues to excel at enterprise sales. Sales to enterprises under $10 billion in value grew 272 percent in the first quarter of 2013, HootSuite said, and sales to enterprises over $10 billion grew 900 percent.

See HootSuite’s swanky new offices

The company also added a major client just in the past few days which I cannot disclose, but is a massive consumer-focused company with almost 17,000 global locations.

While a strong focus on sales and marketing has helped the company grow quickly in enterprise — which former Yammer exec Dee Anna McPherson will help accelerate — Holmes says that viral, social, and content marketing have actually been more important.

Source: HootSuite

HootSuite’s new offices in Vancouver, Canada.

“We’ve seen a very nice progression of users from our free to premium product,” he said. “Often organizations of 100+ people are on board, all at the free level, and then when they become a paying client we’ll help tie all their accounts together.”

The big new features coming in the next month are in security and analytics, Holmes told me, as HootSuite puts more technology in place to prevent hacking or phishing attacks. One of the most problematic security issues, of course, is via internal users who go rogue. To limit this risk, HootSuite is enhancing its account provisioning and LDAP support so that internal users’ social media account access can be easily and safely managed.

“If you give them direct account access … you’re giving them the keys to the kingdom,” Holmes said. “Then you’re relying on social networks to turn them off, and that can take days. We’ve seen that with McDonalds and Burger King recently.”

Source: http://www.flickr.com/photos/bluegenieart/7045869337/

The HootSuite bus at SXSW

In terms of analytics, HootSuite is capitalizing on the fact that its members send out over three million social media messages each day to help brands become more viral.

New tools in HootSuite will help brand managers know not only how they’re doing on one network versus another — which content is successful on Twitter, Facebook, or elsewhere — but also which of their social media managers is more effective at engaging social media users. And then, of course, sharing those lessons so all can benefit.

All of that growth requires more head count, which ballooning 250 percent last year — partially due to acquisitions such as Seesmic — and will grow another 60 to 80 percent this year, Holmes said. Which, of course, necessitated new offices, that HootSuite built in a former police station in east Vancouver.

It’s also something that reminds me of Holme’s comments a year ago about not selling out too early. He felt at the time that HootSuite could become a billion-dollar company.

Those feelings haven’t changed — if anything, they’ve increased:

“We’re getting closer all the time,” Holmes said. “I’m not interesting in selling out … we have a huge opportunity looking ahead, and the billion-dollar number is just a stick in the sand. Hopefully we’ll run right through that and keep going!”

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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.

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July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

KFC launched a new mobile app today in the UK, allowing Londoners to order their girth-enhancing chicken on the go, pop into the restaurant, and pick up their finished order in seconds.

The new technology, which depending on results will be making its way over the pond stateside, was developed with Airtag, a mobile shopping and payments provider that builds white label SaaS technology so that brands can fill out their apps with a branded mobile ordering and payment solution.

“It works on an iPhone app, or a web app,” KFC UK’s IT director Paul Borrett told me yesterday from London. “You select a restaurant, build your order, and pay with a credit card. Then you simply go to a store, swipe a QR code, and pick up your food, cutting out the step of having to stand in line, and saving about 60-70% of the wait time.”

This is not ground-breaking technology, and it has been done before.

Source: KFC, Airtag

KFC’s new mobile ordering app

What’s interesting to me is Airtag’s business model of providing white-label solutions for retailers and restaurants — and how that scales. I asked Airtag CEO Jeremy Leroyer what happens when we deal with 35 different merchants: Do we need 35 different apps?

“This is relevant for bigger merchants,” Leroyer said. “The smaller ones are definitely going to be aggregated, but this is for tier one and tier two merchants. We’re currently working with big grocers to expedite the ordering process, which will enable a similar experience for you to buy groceries.”

Leroyer argues that the important piece of any mobile wallet solution is not the payments or transaction technologies. Rather, it’s the customer experience while ordering, and the services that brands can attach to the ordering process that will make the difference.

That’s an interesting perspective and one that’s certainly worthy of consideration, especially considering the fact that we spend 80 percent of our time on mobile devices in apps. But you have to think there’s a platform play for mobile wallet technology from a Google or Apple that will be accessible to all apps, and require users to enter payment credentials only once.

Which doesn’t mean that a custom experience a la Kentucky Fried Chicken won’t still be viable.

“What we’ve been doing the last few years in Europe is push that experience and those services, to make those wallets relevant,” Leroyer told me. “The wallets that are going to be successful are going to be the merchant wallets.”

It’s certainly working for KFC right now, especially given the fragmented nature of the current mobile wallet landscape.

“I was testing this a week ago,” Borrett said. “I literally was walking to the store, ordered 30 seconds from the store, walked in, scanned, bypassed 6-7 people in line, and got my order.”

Now it’s leading the way in 2013 IPOs for startups, filing for up to a $150 million initial public offering.

“Our mission is to help people see and understand data,” Tableau’s prospectus says. The company offers products that nontechnical folk can use to create rich, interactive charts and simulations based on raw data. Besides a public version, Tableau offers a variety of corporate and premium products which it calls an “alternative to BI,” or business intelligence.

Source: Tableau

Tableau cofounder/chief executive Christian Chabot

After receiving venture capital twice in its nine-year history — both times from NEA — totalling $15 million, Tableau reached $127.7 million in annual sales in 2012, more than double 2011 revenues and more than quadruple 2010 revenues. That’s a compound annual growth rate of 93 percent.

Tableau is profitable as well, although just barely: It’s IPO says it generated income of $2.7 million, $3.4 million, and $1.6 million over the past three years. The last number, for 2012, shows that the company was pushing hard for revenue at the expense of profit — sales and marketing expenses jumped from $30 million in 2011 to $62 million in 2012, and total operating expenses ballooned from $55.5 million to $112.8 million in the same period. Head count quadrupled from 188 in 2010 to 749 in 2012.

Don’t expect that to change quickly. One of the risks cited in the IPO prospectus says the company is still expanding quickly:

We expect expenses to increase substantially in the near term, particularly as we make significant investments in our sales and marketing organization, expand our operations and infrastructure both domestically and internationally and develop new products and new features for and enhancements of our existing products.

However, if the company can secure significant market share and reduce SG&A expenses as a proportion of revenue, Tableau could be wildly profitable. Gross profit on sales of its products was $117.4 million on $127.7 million of revenue, revealing a prime benefit of delivering your product via the cloud.

No firm date has been set for the IPO, but the companies stock ticker symbol will be “DATA.”

Competitors include established business intelligence giants like IBM, Microsoft, Oracle, and SAP as well as startups such as Qlik Technologies, and Tibco Spotfire. And maybe even Google.

“Our mission, to help people everywhere see and understand data, isn’t all that different from Google’s,” Christian Chabot, the company’s cofounder and chief executive, told VentureBeat last year.

Ever had to collect thousands of applications and whittle them down to find the best hundred candidates? Universities and businesses do it all the time, and it’s not an easy task.

New York and Cleveland-based DecisionDesk wants to change that. The company takes the application and selection process into the cloud, promising to make the lives of administrators a lot less stressful. And it just raised $1.75 million in new funding to keep innovating.

Here’s how it used to work: Let’s say you are a music program for a major university. You get hundreds (or maybe thousands) of video auditions when students are applying to your program. Employees at the college have to review all of these materials to select the right candidates. But most of the software used to process these materials is on-premise, so the review process is not easy to manage among remote and traveling employees.

DecisionDesk skirts all of those conventions by streamlining the process and offering its software in the cloud, making it accessible from any browser and on mobile devices through HTML5. On the back-end, everything runs on Amazon Web Services. To date, the company has processed more than 56,000 applicants, more than 200,000 files, and about 100,000 reviews.

“This opportunity presented itself when we looked at the legacy providers in the market,” DecisionDesk CEO John Knific told VentureBeat. “Some of these services aren’t even online and require you to locally store content. People are still sending DVDs and cassette tapes to these programs.”

Not only does DecisionDesk’s software streamline the application process, but it also does advanced filtering. This way, if a candidate has a major red flag (like they don’t actually play an instrument), they can be taken out of the reviewing process faster.

“We’re allowing the entire application and decision-making process happen in one product,” Knific said. “There’s big savings in time and money.”

Knific said the average amount of time saved on each application is two hours. The company’s biggest clients have as many as 5,000 applicants for a single program, which means up to 10,000 hours can be saved with each batch of applicants.

DecisionDesk is already working with a number of universities and prestigious programs, including the University of Michigan, University of Southern California, Northwestern University, Carnegie Hall, and the Fulbright Scholars Program. But much like hot research startup Qualtrics, DecisionDesk is building its roots in academia and then plans to branch out to bigger companies.

“We’d like to disrupt other areas that focus on tryouts and auditions,” Knific said. “In theory, we could replace casting agencies. We’d also like to get into HR.”

To help with its mission of making the application process easier, the company has raised new funds, which come in two parts. DecisionDesk took $1 million in capital from angel investors in Ohio and New York, led by North Coast Angel Fund. DecisionDesk also scored a $750,000 loan from the state of Ohio, called an “Innovation Ohio Fund Loan.” Combined with $400,000 in prior seed funds, the company has raised $2.15 million in funding to date.

The new funding will go toward expanding its 15-employee team and working on with new products. The company says it is discussing future funding with several VC firms.

Check out the video below for more.

Imagine using data to pinpoint the most high-performing employees and keep them satisfied?

A startup called Evolv is building technology to make that possible, and it has raised $15 million in a fourth funding round led by Vantage Point Capital.

“We prevent the wrong person ending up in the wrong job,” said Max Simkoff, the company’s founder and CEO, in an interview.

Evolv’s team of data scientists have developed software they claim can increase workforce tenure by an average of 15 percent and workforce performance by 5 percent. The product compiles data from disparate sources and makes recommendations.

“It’s hard to understand why it’s radically predictive, but it’s radically predictive,” said Jim Meyerle, Evolv’s cofounder.

More specifically, the in-house data science team will extract information like termination history and performance data, then combine it with relevant econometrics, like gas prices and nationwide unemployment rates. To bolster the data sets, Evolv pushes out surveys to its customers’ employees about social media usage, work history, and other core traits and competencies.

Evolv showcases how “big data can be leveraged to improve stagnant business processes,” said Bill Harding, Managing Director, VantagePoint Capital Partners, and a newly-appointed member of the company’s board of directors.

Since forming in 2007, the company has scored some high-profle contracts with household-name customers, such as Xerox, that pay a six figure sum for an annual subscription.

Evolv’s San Francisco-based team will use the cash at its disposal to build out its sales and marketing team, and expand internationally. Previoius investors, GGV, Khosla and Lightspeed Ventures, also participated in this latest funding round.

In November, we reported on Evolv’s partnership with The Wharton School of business. The effort was not just about helping Fortune 500 companies recruit talent and boost productivity — there are tools like SAP’s SuccessFactors and Oracle-owned Taleo for that. Instead, the partners were looking to better understand (and potentially combat) high attrition rates in US workplaces.

Top image via Shutterstock

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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.

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Bloomfire, a workplace collaboration tool, received $8 million in funding from Austin Ventures today, in hopes of helping teams find information for their projects across social, mobile, and cloud data sources.

Your company and team members likely store information in a variety of places around the Internet. Bloomfire attempts to connect them all through its own software as a service application. It pulls from all three of those data sources and allows you to search through content and submit content; it also provides communications tools to help you work with your teammates. Companies like Basecamp and Yammer do something similar in that they allow you to collaborate online, but Bloomfire doesn’t think those services organize the process well enough.

“Unlike Yammer, Bloomfire provides a richer experience for end users who are trying to do their jobs,” a Bloomfire spokesperson told VentureBeat in an email. “We help users find relevant content and internal experts … to help answer business questions, instead of an activity stream of status updates that ultimately just creates information overload with no actionable knowledge.”

Bloomfire was founded in 2010 and is headquartered in Austin, Texas. This funding marks the second portion of its first round of funding, totaling the round at $18 million.

Flower image via Shutterstock

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

New York-based BizSlate is launching its cloud-based resource planning tool to give small business a hand with their supply chain challenges.

Unlike legacy vendors in that sector, including SAP and Netsuite, the technology is specifically designed for departments stores, retail chains, small boutiques, and the like. Chief executive Marc Kalman says BizSlate is ideal for companies that have “outgrown Quickbooks” but don’t have ample resources at their disposal for IT.

IT behemoths like SAP made enterprise resource planning (ERP) tools popular, but they are an expensive and complicated proposition for non-technical types. These tools bring together and manage information about finances, accounting, manufacturing, sales and service, and marketing. Until recently, only large companies could afford the packages and consulting contracts that take a sizable chunk (we’re talking hundreds of thousands of dollars) out of an IT budget.

BizSlate claims it can offer its customers a competitive advantage. At a conference or trade show, for example, a manager can view real-time inventory from a tablet, iPhone, or Android device and place orders into a live system that could potentially pick, pack, and ship on same day — traditionally, this process would take up to a week.

BizSlate has enlisted about 20 companies to take part in its beta test; according to Kalman, these first customers have had an “instrumental role in the design and development” of the product. The BizSlate team has grown to just under 10 employees and has raised a small seed round.

New chief technology officer Michael Park was the former vice president of technology for Fresh Direct, the country’s largest online distributor of fresh produce and groceries. Previously, Kalman was cofounder and chief executive of eZCom Software, a software-as-a-service electronic data interchange (EDI) provider focused on helping small and medium-sized businesses streamline supply chain operations.

BizSlate will set a company back anywhere from $10,000 to $18,000 for implementation and remote training (depending on whether the customer already uses Quickbooks), although it offers discounts for the first six months post-launch.

BizSlate unveiled its beta in April at DEMO Spring in Santa Clara.

Supply chain image via Dusit // Shutterstock 

This is a guest post by investor Joseph Floyd

Consumer-to-consumer (“C2C”) marketplace startups are enjoying a Renaissance, as exemplified by Airbnb and others. Sites like these that facilitate transactions between people have disrupted older offline business-to-business marketplaces by taking advantage of ubiquitous mobile access, and delivering a better experience.

For example, Scripted connects businesses to freelance journalists through its online marketplace. Since Scripted sells access as a SaaS subscription, businesses sign annual contracts (which lowers churn) with Scripted supplying a minimum quantity of written content. If the customer does not utilize the full quantity of service, subscription breakage occurs – Scripted still earns the full revenue but does not incur the cost of providing the unused service (which expands margins). In combination, these two forces increase customer lifetime value, allowing Scripted to increase sales and marketing spend to scale growth more aggressively.

For example, MetalSite, one of a few vertical specific marketplaces in the early 2000s, connected commodities buyers and sellers via auctions. But, MetalSite and many other vertical B2B marketplaces failed because they were taken out of the loop after the first transaction as suppliers began bidding lower prices directly to buyers, without paying commissions to MetalSite.

On the other hand, OpenTable, a restaurant reservation marketplace, has become the de facto system of record for many customers. As a result, customers are locked in to using the platform, which ensures OpenTable captures each transaction and receives its commission. Additionally, restaurants are much less likely to replace OpenTable with a competitor because it keeps the system of record as opposed to simply being a source of reservations.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

This is a guest post by technology executive Roman Stanek 

Despite all the inroads cloud computing has made among business users, it still hasn’t broken through the enterprise IT logjam. I see it as a cultural issue: IT organizations love control and complexity. They love being able to code, flip switches and grab control of their systems. And they love complexity because, frankly, they think it saves their jobs.

Unable to free themselves of this anachronistic mindset, IT departments live in the land of the “no.” That’s “no,” as in: “No, you can’t bring in your own device,” and “no, we can’t build this new function you need because we’re too busy just keeping the lights on.”

So while business people are bypassing IT and subscribing to cloud-based apps that help them manage customer relationship management (CRM) functions with Salesforce.com, connect with customers using Zendesk, and collaborate with Box, most IT organizations remain focused on the mundane. And the irony? By embracing control and complexity, IT organizations have effectively isolated themselves within a technology ghetto. They are the opposite of strategic. And that means they aren’t protecting their jobs — they have become expendable.

I believe it’s imperative for SaaS providers to help IT people accept a new mindset and help them make the transition to what I like to call the age of IT enlightenment. Instead of owning the infrastructure — and spending 90 percent of their time just to “keep the lights on” — they need to assume new responsibilities related to governance, capacity planning, security, workflow across apps, and the rise of BYOD.

How we as an industry handle this challenge — in essence, how we help IT folks into the age of IT enlightenment — could reshape the entire market. Some IT organizations have already begun this transition, and are seeing the rewards. But for the rest…..

It starts with psychology: convincing IT folks that that they are not abdicating responsibility. They are delegating it. This will be easier said than done, since IT craves control especially when something goes wrong, as it inevitably will. The solution?

Deliver excellent SLA: Google Gmail, the world’s biggest cloud-based e-mail system, has an average uptime of 99.99 percent. Amazon targets 99.95 percent uptime for AWS. I challenge any IT organization to come close to those levels of reliability. Even so, we as SaaS providers need to show customers that our levels of reliability are at least the match of their legacy systems. Statistics like these are our friends.

Be as secure as a bank: Make sure you’ve checked off all the legal, security and governance requirements: SOC2, ISO/IEC 27000, PCI. Certificates like these are the best way to clear away the misperception that cloud computing isn’t secure. People put their money in a bank and not under their mattress because they trust a bank’s security system. As an industry, we have to show we’re just as trustworthy when safeguarding customers’ data.

Show IT how cloud computing can make them heroes: The days of touting cloud computing as the way to save money or increase flexibility are behind us. Cloud computing will replace legacy systems because it can transform IT into a strategic arm of business. The successful SaaS companies are fluent in explaining how that can happen. And that fluency can help bring more IT organizations out of the land of “no” and into the promise land of cloud computing.

My hope is that SaaS providers will be able to more easily sell to IT; as they’ll both be speaking the same language: the language of business.

Roman Stanek is the founder and CEO of GoodData, a company that offers a range of business intelligence software and reporting tools to help companies monetize big data. Prior to this, he was the founder of NetBeans.org, sold to Sun Microsystems, and Systinet, which was acquired by HP.

Follow him on Twitter @RomanStanek

Top image via © grafvision, Shutterstock

Application monitoring business New Relic has raised $80 million in fresh funding on a valuation of $750 million, cash that will help it grow, secure its place alongside other sexy enterprise startups like Box and Palantir, and prepare for an initial public offering.

“We’re knocking on the door of an IPO,” said New Relic chief executive Lew Cirne (pictured, below right), in an interview with VentureBeat. “We don’t plan to raise another round before going public.”

However, Cirne would not put an exact timeline on his IPO plans.

New Relic offers companies a SaaS-based dashboard for monitoring and managing their cloud, web, and mobile applications. Ideally, New Relic’s service makes it possible for your business to catch service disruptions and activity spikes in real-time. If a ton of users, for example, can’t access their accounts, you can find that out before the complaints start trickling in and see where the problem is coming from.

The company’s business has been booming in recent months. New Relic has seen 18 quarters of consecutive growth and grew revenue by more than 200 percent in 2012. It has attracted 5,000 paying customers to date, with more than 1,200 of those added in the fourth quarter of 2012. Big-name customers include ESPN, Nike, Sony, Comcast, E*Trade, eHarmony, Github, Groupon, and Zumba.

“We’d love New Relic to be for IT management market what Salesforce is to sales and CRM,” Cirne said. Lest you think that he’s setting his sights too low, Cirne reminded us that the IT management market amounts to $15 billion annually — a big opportunity.

Cirne said that some of New Relic’s biggest customers are paying more than $500,000 a year for the premium level of service and monitoring. Because business is good right now, Cirne wants to use this moment to grow the company like crazy and make it a winner.

And, for his part, Cirne’s got the background to make that happen. Cirne and many on his team were behind Wily Technology, which was sold to CA Technologies for $375 million back in 2006. (Interestingly enough, CA now competes with New Relic and has sued to shut it down on patent infringement grounds.)

The new funding was led by Insight Venture Partners with support by new investors T. Rowe Price, Dragoneer Investment Group, and Passport Ventures. Existing investors including Benchmark Capital, Trinity Ventures, Tenaya Capital, and Allen & Company also participated. Including the new round, New Relic has raised $115 million.

Next up for the company on the product front will be deeper mobile application management and monitoring. New Relic will release full plans for mobile app monitoring in a month’s time, but the focus will be on keeping tabs on the performance and speed of a mobile app. You’ll be able to use New Relic’s dashboard to see how an app is faring on different mobile networks or know immediately if an app is crashing on certain types of phones.

San Francisco-based New Relic was founded in 2008 and has 200 employees. Cirne said that the company plans to expand to between 300 and 400 employees before the end of 2013. Part of that expansion will include opening at least one European office and moving into a new office in downtown San Francisco.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

This is a guest post by Viralheat CTO Vishal Sankhla

The rise of Software-as-a-Service (SaaS) businesses has created a land grab for users. This is forcing many companies to focus heavily on user acquisition, often at the expense of customer support. Marketing and sales departments (tasked with lead generation) have multiplied, while existing customers fumble around on unfamiliar user interfaces and are left to navigate a new product on their own.

Thousands of new customers mean nothing if thousands give up on you and leave at the same time.

It is more difficult and costs 6 to 7 more times to acquire a new customer than it does to keep an existing one. Advertising, promotion, selling, and time invested are all factors in the high cost of acquiring a customer. So it’s important not to neglect the customers you’ve already won. Your churn rate will tell you how bad the problem is.

So, how do you keep churn low?

Though a high churn rate is common among young startups, the company I work for — a social media intelligence company called “Viralheat” — managed to reduce its churn rate by 50 percent since January 2012 and has continued to reduce it by 10 percent month over month through the implementation of a customer success program.

Let’s take a closer look at five facets of the plan and how each has contributed to reducing churn.

1. Contact new customers: Go beyond the traditional welcome email and support-ticket route if you realize that the type of support customers need is more hands-on. New services can be intimidating to new users, some of which are using a product like this for the first time. Customers who feel inundated or overwhelmed by a product or service are more likely to leave than customers who feel comfortable and educated. By personally reaching out to new customers, the customer success team was able to learn each client’s specific needs and sufficiently guide them through usage of the product. Customers were more knowledgeable with the tool and able to use it to its full capabilities, resulting in less customers leaving.
2. Create a learning center: SaaS companies have a lot of information for their customers. Many questions can be answered simply, but FAQ sections don’t resonate well with most customers. Visual resources provide a better service, with hands-on product tutorials. Creating a customer Learn Center where how-to and informational resource pages and videos are housed proved to be extremely useful for us.
3. Offer real-time online chat services: In today’s fast-paced world, and especially in the technology field, potential customers want answers, and they want them now. The difference between choosing services could be the response time to a question about a product, especially in the early stages of shopping around. In our case, implementing an online chat on the homepage allowed current and potential customers to immediately reach a member of the customer success team for support.
4. Conduct new user demos: SaaS products often require training or visual demonstration of the product’s capabilities. Product demonstrations are especially helpful for prospective and new users as they directly see how to use a product. Some companies offer a prerecorded demo to highlight features, but often these demos are hard to follow without rewinding and pausing along the way, and any questions viewers have at the end are left unanswered. Offering live demos twice a week where attendees join a web demo allows the customer success representative to demonstrate the product in real time. Moreover, customers are able to ask questions during and after the demo for an immediate response.
5. Interact on social networks: Customer support solely through email correspondence is quickly becoming a thing of the past. Social media networks like Facebook and Twitter serve as ripe stomping grounds for customers. Consumers can pose questions or voice their dissatisfaction. Ignoring those reaching out through social networks is a mistake — we’ve all seen the damage that can be done by doing so. By constantly monitoring the social web, the customer success team ensures that they quickly reply to all inquiries or feedback. In fact, many users have lauded companies for their quick responses on Facebook and Twitter.

The implementation of a customer success program should be geared toward satisfying all customers — potential, new, or existing. A happy customer is less likely to leave a product or service than an unhappy customer. Ensuring that customers feel satisfied at all stages of their relationship with a product also ensures higher acquisition and retention rates. And although SaaS companies enjoy rapid growth and increased popularity, they must remember not to focus all their efforts in acquiring new customers. Its the long-term customers that keep you in business.

Vishal Sankhla is the co-founder and CTO of Viralheat. Vishal’s expertise is in large scale network monitoring and analysis. 

Top image via wavebreakmedia | Shutterstock

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

After the Autonomy debacle, software giant Hewlett-Packard is putting its eggs in a new basket: converged cloud services.

HP has announced the general availability of its Open Stack-powered public cloud service in the hopes that this will boost customer confidence as it recovers from the $10 billion botched acquisition of enterprise search vendor Autonomy.

The race to commoditize the open-source cloud operating system is firmly underway, but as an original investor, HP has a head-start. For HP, this is part of an ongoing push to bring enterprise customers a combination of private, public and managed cloud resources — a true hybrid cloud.

In addition to releasing its OpenStack-powered public cloud product, HP also announced enhancements to its Cloud Service Automation software, and that its suite of cloud offerings now includes a platform as a service (PaaS) based on VMware’s Cloud Foundry. Read more here about the growing demand from enterprises for PaaS, which makes it easier for developers to deploy applications in the cloud.

HP will make the announcement of the release today at its Discover event in Frankfurt, Germany. The company faces some stiff competition from incumbent cloud computing giants — Rackspace and Amazon make similar claims about the benefits of the hybrid cloud. Dell and Internap are also rolling out their Open-Stack based public clouds. But given HP’s early experimentation in the area, it is already in the game in some ways: France’s second largest carrier, SFR, for example, is using HP’s OpenStack modification in its own offering in France (see how that deal emerged from our own CloudBeat conference in 2011).

HP’s open-cloud offering, Cloud Compute, promises to deliver reliable resources to handle heavy production workloads — its a “pay as you go” model that lets customers pay for the services they actually use. Cloud Compute is an “open cloud” service, meaning that customers are free to choose their platform and language without fear of vendor lock-in.

Free trials are currently on-offer and promotional pricing is available until January – early customers will receive the service at a 50 percent discount.

According to Network World, the company is also announcing a beta version of a cloud-based block storage service, which will likely be generally available in the coming months.

Top photo: basketman23/Shutterstock

Colin Day is CEO of iCIMS, Inc. a provider of SaaS talent acquisition solutions. iCIMS has been profitable for the last ten years, achieving a CAGR of 24% from 2007-2011.

That’s the idea behind MyCustomizer, a new startup just graduating out of FounderFuel, one of the premier accelerators in Canada, based in Montréal, Québec. I had breakfast with MyCustomizer’s chief executive, Christian Painchaud (literally, “warm bread”) at Pikolo Espresso this morning in downtown Montréal.

Between café au lait and various other waistline-enhancing Québecois delicacies, Painchaud shared his vision of the future … and his startup.

“When we buy something, we express ourselves,” he told me. “Fitting in is not cool anymore. The maker movement is a growing phenomenon, as is mass customization, which promotes local manufacturing and customized products. all these things are coming together.”

The ice hockey glove I customized with MyCustomizer’s solution

That’s a good thing for both consumers and the environment — the most environmentally friendly product is the one that’s not built — and custom products ensure just-in-time manufacturing and the least possible waste, but it’s not an easy vision for companies to execute on.

Nike, for instance, spent $30 million over the course of a year’s worth of custom development to build the customization engine behind the personalized NikeID shoes, Painchaud told me. Reebok spent more millions building its own personalization tool.

Both of those efforts were one-off developments. That’s the problem MyCustomizer wants to fix.

Originally part of Warrior, a sporting goods company focusing on hockey and lacrosse equipment, the team focused on building a web site where clients could customize their own hockey gloves or other equipment. At the time, Painchaud was a financial analyst for a mining company.

Christian Painchaud, at breakfast

When the team realized there was a larger niche, it started a company to focus on customization for other companies as well. Now it’s built a cloud-based service that can simply plug into any brand’s website, just like you’d embed a YouTube video, and the goal is between one and five percent of any consumer vertical.

“Our strategy is that customization is a strategy that is going to be adopted more and more by companies,” said Painchaud.

The startup has created a dashboard for businesses to do most of the work in creating an online customizer for themselves. Clients come to a product wizard, upload a picture, define the zones of customizability, set up available options, and create their own product.

The kicker: Five hours from blank picture to online customizer. Any product, any brand.

That’s frankly amazing — I have a little personal experience with configuration engines, having built one for a custom student planner business in the late 1990s. Ours, which was extremely sophisticated for its day, took three full-time developers half a year to create … and a full-time developer to maintain and enhance. The costs, as you can imagine, were significant.

MyCustomizer, whose primary competition is one-off projects like the one I led, charges from $99/month with a small per-sale commission to $10,000/month with no commission. Particularly at the low end, that’s extremely cheap. As in, nonexistently cheap.

“Our bet is that MyCustomizer will help our clients sell more,” Painchaud said, “and help them understand that mass customization is a better business model.”

The company is graduating from FounderFuel today and will be launching at MIT Sloan’s Smart Customization Seminar in early December. But it’s already almost profitable due to existing contracts, Painchaud told me.

MyCustomizer has taken $25,000 in accelerator financing from FounderFuel, some investment funding from the Canadian government, and will be taking advantage of a Business Development Bank of Canada’s offer of a $150,000 convertible loan.

Photo credits: John Koetsier

Perfecto Mobile clearly wants to cement its position as the premiere way for developers to easily test mobile apps across a variety of phones. The company announced that morning that it has scored $15 million in a third round of funding led by Globespan Capital Partners.

With the new infusion of cash, the company aims to further accelerate its already rapid growth, after more than doubling its annual revenue over the past few years. In particular, Perfecto is going to create an even more enterprise-focused sales team — doubling down on a shift away from mobile operators, and towards enterprise customers, that it made last year.

“We’ve been tested by many of the leading system integrators around the world and have been selected as their tool of choice,” said Perfecto Mobile chief executive Eran Yaniv in an interview with VentureBeat.

He added that “all the big names” are relying on the company’s solution, including HP, Motorola, Citrix, and around 600 others. Perfecto also announced today that it has landed a strategic partnership with HP to power its mobile testing.

Instead of pushing developers to virtualized mobile environments, Perfecto has server farms full of actual mobile devices waiting to accept commands from the web (see pic below). It sounds crazy, but for developers who want to make sure they’re testing apps with 100 percent accuracy, having actual devices on-hand is a major strength for Perfecto. Using its patented technology, customers can write scripts and easily run them across multiple devices.

In terms of other goals with the funding, Yaniv tells me he also wants to insure that Perfecto is offering a “world class” Software as a Service solution. The company is also looking into broadening its market with additional services, like performance, security, and customer support testing.

Perfecto Mobile was founded in 2006 in Peta Tikva, Israel, and is now headquartered in Woburn, Massachusetts.

The company has raised around $32 million in total so far. Other participants in this latest round include existing investors Carmel, Vertex and the Waisbein Fund.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Platform-as-a-Service is part of the booming cloud computing sector, one area of the cloud that some analysts, companies, and developers have overlooked. But recent research shows that PaaS is no longer the ugly duckling of the cloud industry — and that it’s ready to grow quite a bit during the next few years.

PaaS will make up barely 1 percent of the overall $109 billion cloud industry this year. But it will likely grow more than 30 percent annually over the next four years, according to research firm Gartner.

This could make PaaS a $2.9 billion market by 2016, or more than 2 percent of the $209 billion total cloud market. While small, it’s the second fastest growing “layer” of the cloud and one that cloud-watchers should be paying closer attention to.

What is PaaS?

Like many things dubbed cloud, PaaS is a term that sometimes get lost in technobabble or marketing jargon. So let’s break down what PaaS actually is.

The cloud features four main layers, according to Gartner: Infrastructure-as-a-Service, Platform-as-a-Service, Software-as-a-Service, and Business Process-as-a-Service (IaaS, Paas, SaaS, and BPaaS,).

IaaS companies such as Amazon, Rackspace, SoftLayer, and Joyent offer the core infrastructure and virtual servers that host applications and data. This is where the heavy iron sits, such as storage, servers, and so on. The SaaS category, meanwhile, lies on the opposite end: It includes applications that companies deliver exclusively via the web (rather than desktop apps). These include apps such as Google Docs, Salesforce CRM, Workday, Box, Taleo, and NetSuite that enterprise workers rely on. BPaaS includes business process services like advertising or payments.

PaaS sits in-between IaaS and SaaS, providing an environment for developers and companies to host and deploy applications more easily. Simply put, PaaS companies shield developers from the hassle of setting up, configuring, and managing things like servers and databases, so that they don’t have to see the infrastructure side.

What makes PaaS so attractive is that it can improve the speed of developing an app, save you money, and maybe most important, let you focus on innovating your application and business. Major PaaS providers include Salesforce (Heroku), Google (App Engine), and Microsoft (Azure).

In the diagram below, you can see how PaaS fits into the main layers of the cloud:

Boom time

In terms of size, SaaS, IaaS, and BPaaS far outstrip PaaS. In 2012, PaaS revenues ($1.2 billion) will be a tenth of the size of SaaS ($14.4 billion), a fifth of IaaS ($6.2 billion), and just a tiny fraction of BPaaS ($84.1 billion).

However, when it comes to year-over-year growth of the PaaS segment itself, it looks quite nice.

Research firm IDC breaks down the market slightly differently than Gartner and is more bullish on PaaS. It estimates that the worldwide public PaaS market will grow from $2.6 billion in 2011 to $9.8 billion in 2016. That represents 30.9 percent annualized growth.

By 2016, IDC believes public PaaS will account for 8.5 percent of overall app dev and deployment revenue, with “strong growth” occurring in every region of the world. Stephen Hendrick, IDC group vice president for application development and deployment research, calls PaaS’ future “exciting.”

Just this week, Salesforce COO George Hu said at DEMO Fall 2012 that its platform services have surpassed Salesforce’s CRM in terms of API calls per day. “The pace keeps me up at night,” he said. “Things are moving incredibly fast at Salesforce right now.”

Additionally, a recent survey by smaller PaaS provider Engine Yard, which had $28 million in revenue last year, indicates that PaaS adoption is on the rise with medium and large companies. Two out of three survey respondents said they already use or plan to use PaaS in the next two years. “Enterprise is beginning to bite,” Mark Gaydos, the Engine Yard SVP of marketing, told us at the time.

For more on how the market is growing, take a look at some of the biggest players:

Heroku

One of the largest players in the PaaS marketplace is Salesforce with Heroku, which has more than 2.3 million apps currently deployed on it. A year ago it had just 200,000. Heroku customers include Walmart, Macy’s, Activision Blizzard, and GroupMe.

“We see PaaS as a fundamental game changer,” Heroku chief operating officer Oren Teich told VentureBeat. “We’re looking at the base of innovation. We’ve only climbed 100 feet of a 3-mile-high mountain.”

Teich said he expects Heroku to host more than five million apps a year from now. He admits that he’s being cautious with that number and said it could potentially be more akin to six million or seven million apps if momentum really picks up. Salesforce would not reveal the revenue it generates from Heroku.

Google App Engine

Google and its App Engine is one of the earliest players in PaaS, opening its doors in “preview status” in April 2008 and officially leaving preview in November 2011.

Here, too, Google does not break down revenue it gets from App Engine. However, Google’s statistics show that usage of App Engine is growing quickly. At the Google I/O conference this past June, Google announced that it had more than 1 million active apps deployed on GAE and 250,000 active developers building on the platform. In May 2011, Google said it had 200,000 active apps and 100,000 active developers.

Half of the Internet’s IP addresses touch Google App Engine servers each week, a Google spokesperson recently told me. Some two trillion datastore operations are performed on it each month.

Microsoft Windows Azure

Thirdly, we have Microsoft and Windows Azure. Azure turned some heads in June by also starting to offer developers IaaS on top of its already strong PaaS product.

Steven Martin, the general manager of Azure’s operations team, told us that Azure has “tens of thousands” of customers and that Azure has doubled the number of its customers over the past 12 months. He said Microsoft has doubled compute capacity for Azure so it can meet demand and that Azure users are consuming more compute capacity than the world used in 1998.

“We’ve worked hard to keep up with demand the past two years,” Martin told us. “In the long term, PaaS will be most widely used for application development.”

Other players

The PaaS market also encompasses a number of smaller players, such as VMWare’s Cloud Foundry, AppFog, dotCloud, CloudBees, Engine Yard, Red Hat’s OpenShift, and Salesforce’s enterprise-oriented platform, Force.com.

AppFog has more than 60,000 apps hosted, up from 50,000 apps a month ago and 10,000 apps a year ago, according to AppFog CEO Lucas Carlson. AppFog also recently acquired Nodester, a PaaS that supports the popular Node.js programming environment.

Developers take control

The prospects for PaaS weren’t always so exciting. Redmonk analyst Steve O’Grady says that the earliest PaaS implementations — Salesforce’s Force.com, Google App Engine, Microsoft’s Azure — did not sell as well as the market expected.

“From an adoption standpoint, early PaaS largely failed,” O’Grady said. “Did Force.com and Google get users? Yes, but they did not live up to expectations.”

That said, a few barriers were stopping the mass market from buying in. First, many large enterprise companies don’t permit PaaS use. AppFog’s Carlson says that CIOs are often concerned about vendor lock-in and don’t like PaaS providers taking over functions the company could potentially set up on its own.

But developers go around their IT overlords and use PaaS services anyway. Because much of the technology is low-cost or open-source, developers say “screw it” because PaaS greatly improves their productivity and lowers project costs.

O’Grady says what the CIOs want doesn’t matter now that their developers have taken control. “They don’t have a choice,” he said.

The second barrier to Paas adoption? Not enough people know what PaaS can help their company accomplish. Heroku’s Teich said when he talks to developers and enterprises about PaaS, they don’t do much evaluation of their options or even know what the options are. Basically, they are woefully uneducated.

“Developers have a lot of preconceived notions about which PaaS they should use,” Teich said. “It’s another sign that PaaS is something that has a lot of growth potential.”

If you feel like you need a PaaS education, come join us for the CloudBeat 2012 conference on Nov. 28 and 29 in Redwood City, Calif. We look forward to seeing you there.

Clouds photo via Nicholas A. Tonelli/Flickr

Cloud breakdown slide via “Windows Azure Platform: Cloud Development Jump Start” via Microsoft

Bigcommerce has taken a big $20 million to accommodate its rapid growth and accelerate product development. The platform helps small business owners create professional online stores so they can “Sell More.”

With the boom in e-commerce, it’s important for retailers to have a strong web presence. However, many small business owners don’t have the resources to set up fully functional outposts online.

Bigcommerce offers a suite of tools to help retailers launch attractive, user-friendly online stores.

The package includes solutions for design, search engine optimization, data analytics, marketing, reporting, apps and integrations, security, product configuration, inventory management, payment processing, and more. Owners can completely customize their stores and incorporate features like product reviews, coupons, and mobile compatibility.

Today, the company also announced a redesign that will make the software more consumer friendly.

“Small and medium businesses shouldn’t need a degree in design and web development to run a successful online store,” said cofounder Eddie Machaalani. “They want it to be easy and intuitive.”

Bigcommerce has some 30,000 customers to date and has facilitated almost $1 billon in transactions since launching in 2009. It has seen over 1,000 percent growth in revenue and is quickly expanding its sales and marketing teams, which are based in Austin, Texas. The executive, engineering, and product teams run out of Australia, where the founders are from.

This second round of funding was led by previous investor General Catalyst, which gave $15 million last summer. Mike Maples of Floodgate also joined this round, bringing the company’s total to $35 million.

Ed-tech is on fire! Desire2Learn, a startup that has bootstrapped for over a decade, has raised its first round of venture capital funding from New Enterprise Associates (NEA) and OMERS Ventures, the venture arm of one of Canada’s largest pension fund managers.

The startup hails from Waterloo, Ontario, the birthplace of Research In Motion (RIM). With this announcement, the region is hitting the headlines for far more than its gadgets — according to Thompson Reuters, this is the largest ever investment in a Canadian software company.

Desire2learn (“D2L”), which specializes in cloud-based teaching tools, plans to use the funding to hire more staff and step up its marketing efforts. Since it launched in 2009, it has expanded to 700 customers and 8 million students, according to John Baker, Desire2Learn’s founder and chief executive officer.

In an interview with Reuters, Baker stressed that the company has been profitable for years, and had already approved plans to fill 170 open positions before the financing deal was completed.

“We have built a high-growth profitable organization over the years and we want to continue to see that continuing to grow,” he said.

NEA, the Menlo Park-based firm that specializes in early stage information technology companies, has bet big on education technology. In recent months, the venture firm recently poured millions into fast-growing online education site, Coursera, and educational social network, Edmodo. It recently raised a $2.6 billion fund, one of the biggest in venture capital history.

NEA partner Jon Sakoda said in a statement that with its software-as-a-service (SaaS) solution, Desire2Learn is uniquely suited to meet the needs of the largest educational institutions in the world. ”As the $1 trillion-plus education market shifts from older legacy products to best-of-breed cloud solutions,” Sakoda said, “Desire2Learn is the clear market leader.”

Still, the startup faces strong competition from Blackboard Inc., an educational tools provider which sold to private investment group, Providence Equity Partners for $1.64 billion. In 2009, the companies resolved a heated three-and-a-half year legal suit over an e-learning patent. Moodle, an open source competitor, launched in 2002, claims to serve over 50 million users.

Read more here about the next multibillion dollar ed-tech company. 

Its headquarters will remain in Canada, but Desire2Learn has already extended its suite of tools to schools and colleges across the U.S..

E-Learning Image via Shutterstock

Google announced two new user-friendly features for its popular BigQuery application with an aim to make it easier and cheaper for businesses to analyze huge data-sets.

On the Google enterprise blog today, the search giant unveiled:

• A processing feature to schedule less time-sensitive batch queries.
• A tool to connect BigQuery to Microsoft Excel to eliminate the time-consuming work of manually importing data and running queries directly within Excel.

BigQuery specializes in real-time insights, but with the new batch processing, product manager Ju-kay Kwek explains, “We understand that there are important, noninteractive queries, such as nightly reports, that businesses also need to run.”

As we reported in November, BigQuery makes it easier and cheaper for companies of all sizes to crunch big data sets. It’s a cloud service that lets users run SQL queries against enormous data-sets and get an answer in seconds, or designate a query as a batch query and let it complete in a matter of hours. In the past, it has been a more expensive process for IT than simply spinning up and uploading data to a Software-as-a-Service (SaaS) program.

BigQuery’s product team has consistently introduced new features to make the product more accessible to business users. This signals a renewed focus from Google on the company’s enterprise division, formerly the neglected sister, and the massive market opportunity for “big data”.

BigQuery is available via a self-service model — it’s cheaper if you don’t require immediate results. Users pay 2 cents per gigabyte processed for batch queries, and 3.5 cents per gigabyte processed for interactive queries.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Cloud powerhouse Salesforce has updated its Do.com social productivity application with new features, including a comprehensive contacts form and a tracker for ongoing deals, the company announced today.

Do launched in November 2011 and quickly moved out of beta a month later. The HTML5-based app offers small and medium-sized businesses various tools for getting things done. Until now, you could create and assign tasks, track projects, and take notes in a web browser or on the iPhone.

“There are lots of individual productivity apps out there, but this is the best solution for groups,” Salesforce Senior VP Sean Whiteley told me.

But now Do is adding several new tools to its stable, all of which will be in private beta for less than two months while the Do team works out the kinks. These tools include a contacts sheet, a deal tracker, an Android app, and social integrations with Facebook, Google, Twitter, and Salesforce.

When these private beta features go live for all, Do will move from being a free app to a freemium one. Free users will be able to use the features they have depended on since launch, but extensively using new stuff like “Deals” will cost you. Whiteley said the company will reveal pricing details for the paid launch in “30 to 45 days.”

Whiteley said the team has seen “hundreds of thousands” of signups since the app launched last year and that Do has spent “zero dollars on marketing.”

“Most of our signups have been through people assigning other people to tasks in the app,” Whiteley said.

VentureBeat readers who would like to try out the new beta features of the service can do so by clicking here. The first 1,000 to sign up will be able to give it a spin.

Take a look at some more views of Do.com below:

And check out a video documenting a Do.com customer’s experiences with the app:

Online log management company Loggly announced today that it’s secured $5.7 million in a second round of investment.

For those of you unfamiliar with “log management,” it is a method of organizing large volumes of data. Logs are basically a documentation of user activity in applications and software. Loggly’s service takes this information from companies and transforms it into an interpretable form.

One of Loggly’s most popular features is turning data into compare graphs. A company can compare successful events versus failed events or compare events over time. If a website is pushing a new code, Loggly tracks activity on the site over a period of time and then provides a before-and-after glimpse of how that new code performed. The developer can see how factors like functionality and traffic were affected by the variable.

Pretty much any application that receives regular traffic has a constant stream of information coming in, and many do not have the know-how or tools to analyze it independently. As CEO Charlie Oppenheimer put it, “Big data isn’t a problem until there really is a big data problem.”

One of the distinguishing elements of Loggly is that it is a cloud-based service. There are many other companies that provide log analytics, but most involve installing hardware or software. With Loggly, a company simply needs to sign up and the rest will fall into place.

“Companies don’t want to have to buy and manage hardware and software on their own,” Oppenheimer said. “They can send us as much data as they have and don’t have to do anything to manage that. We are not the first ones to ever do log management, but with more than 2500 active customers, we are far and away the leaders.”

Customers include big names like Symantec, AirBnB, Heroku, Intuit, the BBC and Electronic Arts. Loggly mainly faces competition from Splunk, a software log management solution that went public in April, and in fact, a couple members of the Loggly team defected from Splunk.

The recent round of funding will go toward expanding its 18 member staff and boosting infrastructure to accommodate ever-growing volumes of data. This money brings Loggly’s total funding to $10.4 million. It’s backed by True Ventures, Trinity Ventures, and most recently, Matrix Partners. The company is based in downtown San Francisco and was founded at the end of 2009. The mascot is Hoover the Beaver.

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Aryaka has a global network of data servers and its technology compresses data so it transmits faster. CEO and Founder Ajit Gupta compared internet traffic to vehicle traffic when describing the product.

“If you want to put more cars to run on the highway, you build ramps so the cars can move faster,” said Gupta. “You can choose to pass slow cars, or change the shape and structure of your vehicle so it can maneuver better.”

The greater efficiency and higher performance in internet operations translates into greater productivity, which could mean higher revenues. As cutting unnecessary costs is a major consideration for businesses, Aryaka has been able to bring in more than 60 global customers across six continents since it launched 18 months ago, and has facilitated 1 billion connections. Customers span multiple industries, including technology, manufacturing, engineering, architecture, and media.

The latest funding round was oversubscribed, and led by InterWest Partners with participation from Presidio Ventures and existing investors Nexus Venture Partners, Trinity Ventures and Mohr Davidow Ventures. It follows two previous funding rounds of $14 million in initial investment and $15 million a second round.

Aryaka is based in Milpitas, California with offices in India. Read the full press release.

The FuzeBox application allows people on any device, on any operating system, from anywhere in the world to conduct live video meetings. All the screens are synced so participants see the exact same thing. Furthermore, users have a host of tools at their fingertips, like zoom and a laser-pointer, as well as the ability to upload and access documents, graphics, videos, presentations, and audio files.

“We are creating a whole new category,” said CEO Jeff Cavins. “Our goal was to revolutionize the way the world does business. You can conduct online meetings without sacrificing the quality of human collaboration and interaction. The three most important components in business are the telephone, email, and the airplane. We think we are the fourth.”

FuzeBox strives to recreate real life interaction virtually, thereby making business trips obsolete. Why fly to Buenos Aires when you can conduct a meeting with 10 attendees in a secure, high-resolution environment online? However, the app is also useful for those who don’t lead the jet-set lifestyle. Creating an easy user experience was as important during the design process as incorporating tools for professionals.

Cavins mentioned three customers the company kept in mind during the design process: the 91-year-old CEO of a multibillion-dollar corporation, a 10-year-old girl with a lemonade business, and the female executive who takes care of the home but still has to attend meetings. Each of these customers can conduct business from their iPad.

The opportunities to use this technology are endless, as evidenced by the impressive and diverse roster of clients FuzeBox has under its belt. Apple has had major involvement and even featured the app in recent commercials. Other customers include eBay, Disney, NASA, Spotify, CBS Interactive, multiple universities and health organizations, large non-profits, and even the Department of Veterans Affairs.

FuzeBox was able to build up this kind of clientele by providing features other web conferencing apps lack. Its servers are built with advanced technology that can support massive entities like government agencies or large corporations.

“If you are going to win NASA or Reuters or Apple, you better have the security stuff nailed tight,” Cavins said. “We have high encryption standards. We also own our own phone company, and our platform is built to withstand the most difficult pounding. All this is extremely expensive and not something a little startup can do.”

And FuzeBox is certainly not a scrappy startup. It arose out of company called Callwave that went public in 2004. At the end of 2007, Jeff Hinley, the chairman of the board at Oracle, recruited Cavins to invigorate the ailing company. In 2009, Cavins and three other partners retired the shares, took the company private, and spent $40 million to build FuzeBox.

Up until this point, the company did not need to raise additional funding. This round which was led by Index Ventures, with participation from Khosla Ventures and Insight Ventures and will be put towards scaling the products and taking marketing efforts worldwide. Cavins says this is just the beginning of where the company can go.

“If this is a 9-inning baseball game, we are coming out of batting practice,” he said. “I think this could be a $6 billion company, it just has to grow into that valuation.”

While countless other online meeting applications exist, like WebEx, Live Meeting, Go to Meeting, and Join.me, no other app functions on this level. Fuzebox already powers over 78,000 online meetings a day in 122 countries and is translated into 10 different languages. Over half the customers are outside of the US. FuzeBox currently has 56 employees in the US and about the same number in Europe. It is based in San Francisco.

ThriveHive customers answer a set of questions about their current marketing practices and receive an initial assessment. Businesses can begin with a 30-day free trial and then choose from multiple subscription options, ranging from $99 to $699 a month.

The ThriveHive platform offers big data analysis in addition to monthly marketing performance reports, support for marketing campaigns, and organizational tools that help local businesses manage their activities. It also looks at what strategies will be most effective for growth based on the idea that each local business is unique and the marketing should be unique as well.

“We believe that local business marketing is broken today,” said ThriveHive CEO Max Faingezicht in a press release. “The current choices for these small business owners to grow their businesses are either one-size-fits-all solutions or point solutions that do not address all their marketing needs.”

In addition to big data analysis, the three founders of ThriveHive also use their expertise to tailor custom marketing plans. Faingezicht and COO Adam Blake are graduates of MIT’s Sloan School of Management. They are both entrepreneurs who grew frustrated with the current model and marketing tools available for small businesses. Third founder Maria Battaglia has experience as a marketing executive at large companies Monster.com, NBC, and IBM.

Competitors include Hubspot and Intuit, a provider of business and financial management tools for small businesses, which acquired marketing software-as-a-service company Demandforce for $423.5 million this past April.

The first round of investors included MIT Professor Ed Roberts, Mitch Roberts, and Jean Hammond, as well as seed stage venture capital groups Founder Collective and IBCC. ThriveHive was founded in 2011 and is based in Cambridge, Mass.