Micron Technology said yesterday it has appointed D. Mark Durcan to replace chief executive Steve Appleton, who died Friday when the small experimental plane he was piloting crashed at the...
Hi. While this blog is a part of Seed Catalyst’s website, I realised over the initial few weeks that a lot of you are first introduced to the firm via the blog rather than our home page.
So to introduce myself - I’m a business consultant working with early stage technology firms to help streamline their strategy and go-to-market approach and support them for fund raising.
With this blog, I aim to capture key market trends that I see in the industry, the ecosystem and cross-plays in some of the more interesting and upcoming sectors, as well as cover interesting companies that I meet.
I will also be addressing vexing and interesting valuation and deal/term-sheet structures that would be of interest to technology start-ups at various stages of their growth.
A discussion with a VC in November 2009 recently came to mind. He asked me the typical question – what are the trends and investment opportunities you see in the market? And I remember talking about the impact the growth in cloud based services will have on virtualisation software and storage.
A few investments recently bought that conversation to mind. Unfortunately some of them are in stealth mode so not too much information currently forthcoming still worth keeping an eye out.
Bromium is an enterprise software developer focussed on virtualisation and security software. They have just raised (23rd June ’11) $9.2 million from Andreesen Horowitz, Ignition Partners and Lightspeed Ventures. Their website mentions they are focused on the ‘delivery of infrastructure solutions’. Their solutions, it seems, would help address the security concerns for anytime anywhere access to enterprise data and applications. Interestingly, they also have an office in Cambridge, UK.
Another recent investment was Tintri which is developing VM-aware storage solutions (June 15th ’11). Their flagship product VMStore is a 4U box with 8.5TB of spare capacity which can store up to 13 logical TB in one unit. They have just raised $18 million in a Series-C round from NEA and Lightspeed Venture Partners. (In fact storage for virtualised environments is receiving a lot of attention with a variety of solutions.) Tintri is interesting because they are using virtual machine abstractions--VMs and virtual disks--in place of conventional storage abstractions such as volumes, LUNs, or files.
Nutanix came out of stealth mode in April with an initial investment of $13.2 million from Lightspeed Venture and Blumberg Capital. Their focus is also on storage for a virtualised network but the aim is to eliminate the traditional SAN/ NAS architecture. Very succinctly their news article states that virtual machines running on Nutanix appliances use high performance flash and hard disk storage from the cluster ‘in real-time’ for reduced capital and administration costs. Their quote says it best, “The Nutanix approach follows Google's model of leveraging smaller blocks of commodity hardware with a more intelligent software layer, delivering this to enterprises in a hardware appliance that brings the compute and storage together, eliminating the need for costly network-attached storage.”
And another virtualisation storage oriented investment was Virsto which raised $12 million from Interwest Partners, Canaan Partners and August Capital in June 2011. Virsto software is targeted at removing the randomness of read-write operations between VMs and the attached storage thus enhancing the efficiency and effectively turbo charging the IOPS per spindle of existing storage. Virsto’s Virtual Storage Engine (VSE) installed through a simple, software plug-in creates a Virsto vDisk which allows fast, efficient snapshot backup operations based around hypervisor-based storage APIs. Simultaneously they also announced the acquisition of EvoStor, a company specializing in storage virtualization technology for VMware environments.
To keep an eye out for is an interesting firm which has raised a small amount this year, $1.3 million, but will be looking at raising their Series-A later in the year - Midokura. Their focus is true virtualisation of a network i.e. flexibly virtualising networks so that users can create layer 2 switches, routers, load balancers, firewalls et al with the click of a button. In effect virtual machines can be moved around the network with the virtual network following automatically. I am far from an expert on the subject but this sounded interesting to me. All the best for their fund raising!
Another investment this year (Feb ’11) was Nicira Networks which raised $26 million for enterprise network virtualisation from Lightspeed Venture and NEA. Their aim is to deliver software which virtualises networks thus meeting the operational requirements of cloud based data centers. Their network hypervisor decouples network services from the underlying hardware reproducing the entire network service model in logical space.
And we round off with Solidfire, a stealth cloud computing storage platform startup which raised $11 million in Series A from NEA, Valhalla Partners and Novak Biddle Venture Partners. The info available is that they are aimed at providing an enterprise-class cloud storage system. SolidFire’s solid state architecture is said to enable independent virtualization of both capacity and performance, allowing complete flexibility in cloud-scale storage provisioning and management.
All of these are datacenter focused virtualisation solutions. And then there is Appsense providing user virtualisation solutions. This essentially implies that all the user information - corporate policy, settings, rights management, applications – are managed independent of the desktop and can be migrated on-demand to any point of use. The firm recently raised a whopping $70 million from a single investor, Goldman Sachs. Current revenues are $47 million (2010).
In summary,
- There appears to be a significant focus on virtualisation solutions especially storage.
- Two investors who have been recurrent are Lightspeed and NEA. Andreesen Horowitz was recently joined by a venture partner with an infrastructure solution focus and hence followed their investment in Bromium. Accel Partners has also recently added on a venture partner with industry experience from VMWare and other data storage and infrastructure firms, plus two new funds. Worth watching.
- These are investments being made in core technology, appliances and software, rather than just social media and advertising platforms. Two key characteristics of such investments is their high capital requirements and long gestation periods. Is this then a snail paced return to higher risk and longer term investments?
Miniature base stations - thumbs up for virtualisation
Written by rhitu barua
Tuesday, 22 February 2011 15:49
A lot of the noise at MWC last week was around the Nokia-Microsoft partnership and the tablet onslaught. But in the noise, an interesting development seems to have gone unnoticed, that is Alcatel-Lucent’s miniature base station.
Eliminating the need for cumbersome base stations, Alca-Lu is launching 2.5 inch radio cubes which combine 2G, 3G and LTEwideband active array antennas along with a multiband remote radio head and an SOC for baseband processing. They are so small that they can be integrated with a lamp post while at the same time halving op costs and CO2 emissions. In addition they are firmware upgradeable and utilise beam forming to connect more efficiently with mobile devices. The devices are utilising microwave technology advances for backhaul and compression to connect back to the network.
Alca-Lu is positioning them for rural penetration thanks to their operational efficiency with the ability of using microwave (or IP) to connect back to the network. This is, in itself, a killer rationale for utilisation in countries with geographically dispersed populations. Moreover, in a world where mobile data is growing at gargantuan rates, Alca-Lu describes lightRadio as ’a flexible architecture that distributes intelligence throughout the network so that it can dynamically expand to meet growing demands.’
Well, if these devices become wide-spread, they could be the death-knell for femtocell devices.
And then of course, not to be left behind, NSN launched their “Liquid Radio”. This device too consists of the antenna, radiohead and baseband processing. However, unlike Alca-Lu which plans on completing most of the baseband processing ‘in the cloud’, so to speak, NSN will utilise the cloud only for overloaded cells with some baseband processing maintained at the unit itself.
Architectural variations, we don’t mind.
China Mobile, Verizon and Orange have already started showing interest, with the market expected to reach $16 Billion over the next five years......we’re watching...
We are living in an interesting conundrum these days. At one end there are governments asking for access to Blackberry servers to keep an eye on public data. There is news of phone hackings galore. At the other end there is a huge ruckus around privacy issues be it Facebook, Google etc.
Which is why two recent launches raising the privacy flag were extremely interesting.
A French company, Ercom, provides crypto gateway solutions for operators and customer premises to manage authentication and encryption of voice and data flows. They’ve announced a partnership with another French player, device design and manufacturer Sagem Wireless.
The aim is to launch devices offering embedded security for voice, SMS and data theft through attacks via Wi-Fi and Bluetooth. As compared to add on applications which are currently on offer today, these devices provide a blend of network expertise, telecom protocol integration and cryptology. The first devices to come to market will provide voice encryption security, ensuring device-to-device, device-to-enterprise and machine-to-machine security.
Another launch was by Giesecke & Devrient (G&D). They are launching a new microSD card which includes a cryptocontroller to encrypt cell phone conversations and provide securely authentication.
The card uses two-factor authentication to confirm their identity i.e a card and a PIN. But the key advantage of the G&D card is the speed with which it calculates 521 bit long keys based on elliptical curve cryptography, the strongest security in the market for the microSD form factor.
What’s interesting is that suddenly all the security solutions are talking about voice encryption rather than mobile finance and payment solutions. Federal prosecutors in the US with all the phone tapping action would not be very happy people, would they?
Last week, I mentioned Apple and Gemalto in passing, with the promise to revisit the subject.
The word on the street is that Apple will be launching a future iPhone with an integrated SIM from Gemalto. The user can choose their mobile operator via the app store.
So what could the repercussions of such a move be?
First let’s take a brief historical look at the interplay between SIM vendors, handset providers and telecom operators. In developed markets, telecom operators have been the controllers of the supply chain – they provide the SIM card with the mobile number and pre-installed telco applications and services and they provide subsidised handsets with different voice and data packages.
The space is in a state of flux with reams written already on the demise of telco walled gardens. Handset vendors like Apple, Nokia, RIM, Samsung are trying to gain control of the applications and services component of customer interaction while telcos struggle against becoming dumb pipes.
At the same time SIM card vendors are also trying to augment their sphere of influence. Gemalto, in fact, has been very acquisitive – Trusted Logic, O3Sis, NXP, Netsize, Valimo, Xiring, Cinterion – in the last twelve months.
So, first, the questions:
Idea feasibility: How will Apple ensure openness of network operators to provision services on an ad-hoc basic?
I would seriously doubt operator interest in enabling a model where they lose complete control of the customer and eco-system to the handset and SIM vendor. In the proposed model, there would be no lock-in or possibility of roaming revenues. Similar attempts at this model haven’t fared too well.
Having said that, interested service providers could be MVNOs e.g. Virgin Mobile, Tesco Mobile, Carphone Warehouse in UK. Such a model might also help in the pick-up of mobile based payment services (thinking Tesco here of course) or similar cross-selling of services. I wonder who takes the network customer care calls?
New Services: Will security be enabled via Apple or Gemalto?
Most of Gemalto’s acquisitions over the last year have been centred on mobile security, authentication and payment services. Last year Mastercard certified Gemalto’s Trusted Service Manager (TSM) as well, further bridging the mobile payments gap between banks, operators and merchants. I would anticipate an increased pick-up in NFC based services with the Apple applications and payment platform and Gemalto SIM-level security.
Transferability: Will the SIM be interoperable with other handsets?
The million dollar question......considering its Apple, we can take that as a confirmed no go.
For the moment we wait and watch how further developments on the model pan out.
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