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Big data startup with NSA roots nets $2M

Barb Darrow — Mon, 20 Aug 2012 13:24:10 +0000

Sqrrl, a startup that grew out of the government’s super stealthy National Security Agency, has snagged $2 million in seed money to build out technology to make big data applications more secure and more palatable for use by healthcare and financial services companies.

Co-founded by CEO Oren Falkowitz, sqrrl is parlaying the Apache Accumulo project – which is in turn based on Google’s BigTable key value store. “Everyone knows big data is hot, but there are concerns around security that keep it from reaching its full potential,” Falkowitz said in an interview.

What sqrrl will be able to do is segment out a file — say an electronic health record (EHR) — into many parts which can then be locked down or left open as needed.

“An EHR might have a hundred or a thousand components and if any one of those requires an extra control, like the patient’s social security number, the current method is to control that entire record. We have fine-grained access model so you can assign different security to the patient name, to allergies, to medications, to doctors names–they can all be individually controlled,” he said.

The company has seven employees now but plans to staff up aggressively — it just moved from the Washington, D.C. area to Cambridge, Mass. to better tap into the reservoir of big data expertise in the area.

It also netted some big name advisors in its choice of investors. Chris Lynch, former CEO of Vertica, now part of HP, is advising the company, as is Matrix Partners’ Antonio Rodriguez.

While it seems counterintuitive that the NSA would open-source technology it has fostered, there is at least one precedent. The agency, for example, developed SELinux, or Secure Enhanced Linux, a hardened version of the popular open source operating system, Falkowitz said.

Asked about the company’s unusual name, Falkowitz said the way current companies deal with sensitive data — basically hiding it away as squirrels do with acorns — is what informed the decision. “With our technology, companies resolve that problem — there’ll be no need to hide your data to make it more secure,” he said.

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Meteor rakes in $11.2M to fuel enterprise app development push

Barb Darrow — Wed, 25 Jul 2012 13:30:14 +0000

Meteor Development, the hot startup that aims to remake enterprise software development, picked up some pretty impressive coin in a $11.2 million Series A funding round led by Andreessen Horowitz, with contributions from Matrix Partners.

The company’s goal is to help developers write enterprise applications for the webscale era. Meteor’s real-time JavaScript framework – which has generated considerable buzz — lets developers use the JavaScript skill set they already have to build these applications on their local PCs without having to learn and knit together non-JavaScript code (Python, PERL, etc.) that typically runs on the server.

“We give you a consistent programming environment for both the client and server code. You need to know JavaScript and you will learn some APIs but you no longer have to think two different ways,” he said

GigaOM first reported on this funding round before it closed, in late May.

Meteor will use the money to build the open source community around its offerings. “That means writing software, hiring engineers to help us do that faster and working with developers who are using it,” said company co-founder Matt DeBergalis in an interview. The company now has 7 employees. The long-term revenue opportunity is for Meteor to build commercial add-ons for the existing products, DeBergalis said.

Along with the money, Meteor gets a ton of enterprise software expertise from its new backers. Rod Johnson, founder of SpringSource, now part of VMware, is joining Meteor’s board. Both Matrix General Partner David Skok , who helped build the JBoss sales strategy and brought JBoss to Red Hat and Andreessen Horowitz General Partner Peter Levine, former CEO of XenSource, will advise the Meteor board.

What Meteor hopes to give enterprise developers is the ability to build the fast, interactive applications they’ve come to appreciate from their experience with Google and Facebook although precious few companies have the resources of those tech giants.

To be sure, Meteor is not alone in this quest. Parse does some of the same things but for mobile app developers. Yahoo’s open-source Mojito framework attacks some of the same problems and got good early reviews, but does not seem to have gotten much traction.

But given this funding and the amount of interest in making enterprise applications as dynamic and interactive as web apps, Meteor is facing a pretty healthy opportunity.

Photo courtesy of Flickr user tonynetone

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Networking startup Plexxi scores $20.1M

Stacey Higginbotham — Mon, 02 Jul 2012 14:53:25 +0000

Fiber may not just be for undersea and long-haul networks anymore.

Plexxi Systems, a stealthy networking startup that wants to bring fiber into the data center at a cost comparable to existing Ethernet technologies, has scored a $20.1 million third round of financing from Lightspeed Venture Partners, Matrix Partners and Northbridge Venture Partners.

Plexxi has been around since 2010 and has raised a total of $48.48 million from the current investors to build a switch that uses fiber optics instead of the current Ethernet connections. The money will help bring Plexxi’s product to market as it is making the rounds at large webscale and cloud providers showing off its switch.

The company has recently spent a little more time sharing the details of its switch, and the associated software that networks the switches, with prospective customers and the press. It also launched a private beta and says it will continue sharing more details on its products and plans. For more, read my story on Plexxi from mid-June. Here’s an excerpt:

Like many, Plexxi is addressing the networking market, specifically the idea that the next generation of networking has to have a flat architecture and adapt to the needs of applications on demand. However, unlike the companies that view the problem as one requiring OpenFlow or a software-defined network that can work on commodity networking gear, Plexxi wants to sell a smarter box. In this way it’s closer to the Ciscos and Junipers of the world.

Plexxi is selling a top-of-rack switch that contains both a fabric-like management software as well as a fiber-optics component that can transmit packets faster than the current 10 GigE ports. For those who follow the fiber world, such a statement may seem a bit insane. Fiber is not cheap and the biggest reason it’s not used in data centers is because it can cost ten to 100 times more than current Ethernet technologies.

As I said in that story, we’ll have to see if Plexxi can solve issues such as the high-power consumption associated with most optical technology as well as provide a way to get to a Plexxi-style network without dumping your old gear. Clearly, its investors are excited.

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Which is less expensive: Amazon or self-hosted?

Charlie Oppenheimer, Matrix Partners — Sat, 11 Feb 2012 17:00:11 +0000

Updated. Amazon Web Services (AWS), as the trailblazing provider of Infrastructure as a Service (IaaS), has changed the dialog about computing infrastructure. Today, instead of simply assuming that you’ll be buying and operating your own servers, storage and networking, AWS is always an option to consider, and for many new businesses, it’s simply the default choice.

I’m a huge fan of cloud computing in general and AWS in particular. But I’ve long had an instinct that the economics of the choice between self-hosted and cloud provider had more texture to it than the patently attractive sounding “10 cents an hour,” particularly as a function of demand distribution. As a case in point, Zynga has made it known that for economic reasons, they now use their own infrastructure for baseline loads and use Amazon for peaks and variable loads surrounding new game introductions.

An analysis of the load profiles

To tease out a more nuanced view of the economics, I’ve built a detailed Excel model that analyzes the relative costs and sensitivities of AWS versus self-hosted in the context of different load profiles. By “load profiles,” I mean the distribution of demand over the day/month as well as relative needs for bandwidth versus compute resources. The load profile is the key factor influencing the economic choice because it determines what resources are required and how heavily these resources are utilized.

The model provides a simple way to analyze various load profiles and allows one to skew the load between bandwidth-heavy, compute-heavy or any combination. In addition, the model presents the cost of operating 100 percent on AWS, 100 percent self-hosted as well as all hybrid mixes in between.

In a subsequent post, I will share the model and describe how you can use it for scenarios of interest to you. But for this post, I will outline some of the conclusions that I’ve derived from looking at many different scenarios. In most cases, the analysis illustrates why intuition is right (for example, that a highly variable compute load is a slam dunk for AWS). In other cases, certain high-sensitivity factors become evident and drive the economic answer. There are also cases where a hybrid infrastructure is at least worthy of consideration.

To frame an example analysis, here is the daily distribution of a typical Internet application. In the model, traffic distribution is an input from which bandwidth requirements are computed. The distribution over the day reflects the behavior of the user base (in this case, one with a high U.S. business-hour activity peak). Computing load is assumed to follow traffic according to a linear relationship, i.e. higher traffic implies higher compute load.

Note that while labor costs are included in the model, I am leaving them out of this example for simplicity. Because labor is a mostly fixed cost for each alternative, it will tend not to impact the relative comparison of the two alternatives. Rather, it will impact where the actual break-even point lies. If you use the model to examine your own situation, then of course I would recommend including the labor costs on each side.

For this example, to compute costs for Amazon, I have assumed Standard Extra Large instances and ELB load balancer for the Northern California region. The model computes the number of instances required for each hour of the day. Whenever the economics dictate it, the model applies as many AWS Reserved Instances (capacity contracts with lower variable costs) as justified and fills in with on-demand instances as required. Charges for data are computed according to the progressive pricing schedule that Amazon publishes. To compute costs for self-hosting, I assume co-location with the peak number of Std-XL-equivalent servers required, each loaded to no more than 80 percent of capacity. The costs of hardware are amortized over 36 months. Power is assumed to be included with rackspace fees. Bandwidth is assumed to be obtained on a 95th percentile price basis.

Now let’s look at a sensitivity analysis. Notice in the above example, that a bit more than half of the total cost for each alternative is for bandwidth/data transfer charges ($35,144 for self-hosted at $8/Mbps and $36,900 for AWS). This is important because while Amazon pricing is fixed and published, 95th percentile pricing is highly variable and competitive

The chart above shows total costs as a function of co-location bandwidth pricing. AWS costs are independent of this and thus flat. What this chart shows is that self-hosting costs less for any bandwidth pricing under about $9.50 per Mbps/Month. And if you can negotiate a price as low as $4, you’d be saving more than 40 percent to self-host. I’ll leave discussion of the hybrid to another post.

This should provide a bit of a feel for how I’ve been conducting these analyses. Above is a visual summary of how different scenarios tend to shake out. The intuitive conclusion that the more spiky the load, the better the economics of the AWS on-demand solution is confirmed. And similarly, the flatter or less variable the load distribution, the more self-hosting appears to make sense. And if you’ve got a situation that uses a lot of bandwidth, you need to look more closely at potential self-hosted savings that could be feasible with negotiated bandwidth reductions.

Update (Feb. 14): This post has garnered a lot of much appreciated attention. From the comments, I see that two clarifications would be helpful:

The key point here is that a comparison of the cost of cloud hosting versus self-hosting needs to be based on the profile of your load. It is not that Amazon (or any other provider) is more expensive than self-hosting, as this is often not the case. Rather, it depends on the profile of your load. Moreover, it’s not so important where exactly your breakeven point is but rather it is most important to know the main sensitivities (e.g. bandwidth cost, CPU load, storage, etc.) for your situation so that you can understand which differences could flip the decision. The results here are for this example only and other examples will produce different results, some in favor of cloud and some in favor of self-hosting.
The specific use case I’ve chosen is for a business that’s pretty far along. But some people have been wondering how this example applies to startups. That’s a great question.

While I’ve referred to “spiky” loads, there’s another way to say that which is “variable,” “unknown” or “unpredictable,” which describes the situation that a startup (or other new business endeavor) usually finds itself in. In those cases, the fact that you cannot forecast very well is a reason why it’s highly unlikely you’ll save money by self-hosting…because you’re very unlikely to buy the right amount of capacity. You’ll either overprovision and waste money on unused capacity, or you’ll buy too little and compromise the business. So while you might not call your startup load “spiky,” the fact that it’s unpredictable gives it a similar profile in the model and hence the economic conclusion would tell you to go with the cloud infrastructure route.

Another not-strictly-economic respect that needs to be considered for startups (and others) is the benefit of focusing one’s attention on primary value-creating activities versus commodity activities (relative to the business) that one might not be very good at anyway. In addition, AWS and other cloud providers give us the highly valuable ability to experiment with little downside. This is especially important for the highly iterative and trial-and-error nature of building successful Internet businesses.

The point of this particular example is that if you have a significant amount of load that is well known and predictable then you may be able to save some money by bringing a portion or all of that inside.

Charlie Oppenheimer is a serial-CEO and currently an executive-in-residence at venture-capital firm Matrix Partners. His most recent company, Digital Fountain, was acquired by Qualcomm, and his previous company, Aptivia, was acquired by Yahoo. He blogs at stratamotion.com.

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Huddle tries to reel in big fish with unlimited deal

Bobbie Johnson — Tue, 24 Jan 2012 15:32:21 +0000

London’s Huddle may have started life as an enterprise file-sharing service for smaller companies, but these days it seems to be larger businesses that are taking the bait. Over the last year or two, Huddle’s suite of tools for online project management, file sharing and office collaboration has helped land major customers including ESPN, Diageo and HTC.

Now the business is going even further, with a new “unlimited” offering deliberately designed to reel in more major customers — and hopefully erasing the barriers between workers who are inside the huddle and those left on the outside.

Huddle’s Unlimited Enterprise offering, which is being announced today, allows businesses to invite any number of extra read-only users into an existing Huddle workspace for no extra cost. Essentially, this means those who already license a Huddle for a number of workers can also open files to occasional or lower-level contributors without any hassle.

It might sound minor, but it’s incredibly useful for big businesses who have a lot of workers, suppliers or contractors who only need a small degree of access, and for whom a full Huddle account would be undesirable, unnecessary or pointlessly expensive.

The move, according to CEO Alastair Mitchell, came from the realization that many of Huddle’s biggest customers had significant numbers of potential users who existed outside the firewall, but still needed occasional access to material inside it.

“Once you’re talking about a company of 6,000 to 10,000 people, cloud software is a really interesting proposition,” he told me. “The usage becomes very different. You have lots of users who don’t need to hook into the system the whole time.”

In particular, he suggests governmental organizations could find it very useful to give read-only access to large numbers of users — something he backs up by proudly proclaiming Huddle is “the largest cloud deployment in the U.K. government.”

Limited access “is one of the biggest issues in collaboration,” he claims. “The first problem is not being able to access the content at all, the second is that you can’t use the software because you haven’t got a license. This solves those problems.”

The idea is to help the company, which has offices in London and San Francisco and plans to push forward with a new Boston base in the coming months, take on rivals like Microsoft’s Sharepoint, Box and Jive.

It’s certainly a better idea than the tacky stunts previously deployed by the company to attract attention — like when it sent an entire marching band to hijack Microsoft’s Sharepoint Conference.

Hopefully, Huddle is learning that delivering a better product to users wins over gimmicks every time.

It could be for a big year for the company, which we labelled “one to watch” in our recent list of Europe’s 20 best startups. The forthcoming Boston office is an attempt to help expand in the U.S. market, which is massively important for software as a service businesses. Indeed, it now generates 55 percent of Huddle’s new leads.

So far, it has taken $14 million in funding from Eden Ventures (Apertio, Blinkbox) and Matrix Partners (Gilt Groupe, Aruba Networks), but grabbing that chance could require some extra money, even for a business which is said to be raking in $25 million annually.

Mitchell was coy about fundraising, but did admit it was a distinct possibility.

“There’s a lot of demand for our business from investors,” he said. “We might well raise more this year, but don’t need to.”

Image courtesy of Flickr uservisualpanic

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GrabCAD grabs $4M for open-source CAD

Barb Darrow — Thu, 05 Jan 2012 15:38:35 +0000

GrabCAD, a specialist in open-source CAD software, has netted $4.2 million in new funding from its existing VC backers. Plus, David Skok, the general partner with one of those backers, Matrix Partners, has joined GrabCAD’s board. The news was outlined in a blog post on Thursday by GrabCAD president Hardi Meybaum. Skok has some CAD cred: He is on the board of Dassault Systemes’ SolidWorks, a maker of 3-D CAD (or computer-aided design) software. Engineers use this kind of software to design products on-screen.

This cash influx shows that investors believe the open-source CAD model has legs. Other open-source CAD entries include SourceForge’s FreeCAD project and Cademia. And CAD is starting to come to the cloud as well. Autodesk, the CAD market leader, fields a cloud-based CAD effort called AutoCAD WS.

All the investors this time out also participated in an earlier June 2011 funding round of $1.1 million. Other GrabCAD investors include Atlas Venture; NextView Ventures; John McEleney, the former CEO of SolidWorks; Jon Stevenson, a former executive with PTC; and Andy Payne, who co-founded Open Market. GrabCAD was one of 12 Boston-area TechStars last year.

The new funding round will be used to staff up the Cambridge, Mass.–based company, which has job listings posted for a UX/UI engineer, a software architect and a senior software engineer, according to the GrabCAD website.

Photo courtesy of Flickr user 401K

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GigaOM Euro 20: the European startups to watch

digitalbananaman — Tue, 23 Aug 2011 07:01:13 +0000

Europe’s web scene is now thriving, and we’ve compiled a list featuring some of the best and brightest European web startups — what we’re dubbing the GigaOM Euro 20. Depending on how closely you watch Europe’s online scene, some of these companies may be familiar to you. Others you may not have heard of. But all of them are worth watching closely. In this report, we profile the 20 startups that we feel best represent Europe’s current tech scene. We have organized our list around perception, and as lists go, it is intended to be a guideline rather than a rule book. It’s not exhaustive, and clearly, with such a diverse and vibrant continent as our playing field, it never could be. Companies mentioned in this report include GetJar, Huddle, Made.com and Songkick. For a full list of companies, and to read the full report, sign up for a free trial.

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Squeezed Cell Networks Lead to Dealmaking

Stacey Higginbotham — Mon, 01 Feb 2010 19:25:35 +0000

Two startups making hardware for the mobile industry scored investments today: Pulsus, a Korean company that has a chip aimed at making handsets more efficient, has taken $4 million from Qualcomm Ventures, and SpiderCloud, a startup that helps with mobile offload, has gotten $25 million from a group of VCs.

As users, application developers and carriers bump up against the technical constraints around mobile broadband’s popularity, expect more and more hardware investments and dealmaking in the mobile sector. A venture partner involved in the $1.3 billion program to fund startups that will benefit Verizon’s LTE network has even detailed to me what types of companies he and other participants in the program are looking to invest in.

But back to today’s funding. SpiderCloud is building out hardware that allows for cell phone traffic to be kept on a proprietary local network, which the company has dubbed eRAN. So instead of all the mobile traffic that a business might generate in its building and send back to the web over the carrier’s cellular network, all the phone in the office can now communicate via a smaller in-house network that connects to the web using the business’ own web connection — it’s kind of like a femtocell in idea, but not in execution. Today’s infusion, from Opus Capital, Shasta Ventures, Charles River Ventures and Matrix Partners, brings its total to $40 million.

Pulsus makes a mixed signal chip that converts analog signals to digital signals before it amplifies them. That allows a greater ability to modulate those signals for better sound quality but could also be used to increase the power efficiency of the handsets, possibly in a manner similar to Quantance. It also makes a variety of other audio chips and its CEO has said it hopes to one day “be the Qualcomm of Korea.”

In a related move, today Austin chip startup Black Sand Technologies purchased an intellectual property portfolio from Silicon Labs, a mixed-signal chipmaker. Black Sand is building a power amplifier that will make some of the components inside mobile handsets cheaper to manufacture and will boost battery life on mobile phones. Black Sand raised $10 million last September.

Image courtesy of Flickr user Jurveston

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Intersolar News: Tigo Raises $10M for Solar Module Efficiency

Katie Fehrenbacher — Tue, 26 May 2009 23:48:45 +0000

The massive solar conference in Munich Germany kicks off tomorrow, and we’ll be bringing you some of the news about the startups and tech innovations from the show. Tigo Energy, a startup that sells software and hardware to make solar photovoltaic systems more efficient (not to be confused with solar financier Tioga), has announced that it has raised $10 million in a second round of funding from ICV, Matrix Partners, OVP and Clal Energy.

The Los Gatos, Calif.-based company’s system embeds its nodes into each photovoltaic module. The idea is if a cloud or shade passes over the panels, traditional systems are at the mercy of the weakest module. But a Tigo-enabled system can maintain the maximum power output of the system more effectively, and account for the weak link.

Other systems are using solar inverters to manage the power output, like Enphase Energy, which has a distributed solar inverter product that adds intelligence to the solar photovoltaic systems, too. Gunther Portfolio, which watched presentations from both Tigo and Enphase at Intersolar, has more details on the benefits of the per-module system vs. the distributed inverter systems.

Also on the market is chip maker National Semiconductor’s SolarMagic technology, which it launched last year, and which the chip maker says can recoup as much as 50 percent of solar systems’ output lost due to shade and debris. And expect some big news out of the show from SolarEdge, a startup that makes hardware and software to monitor individual solar panels with embedded integrated circuits.

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M&A: Riverbed Buys Mazu for $25 Million

Om Malik — Wed, 21 Jan 2009 06:22:14 +0000

[qi:101] Riverbed Technology, one of the big players in wide area network optimization, today acquired network management software maker Mazu Networks for about $25 million in cash with some incentives based on sales performance. For Riverbed, this is a bargain-basement way of adding features that would help its customers monitor video and VoIP traffic on their enterprise networks. Mazu makes network behavior analysis software. The deal is not such a good one for the VCs, who pumped more than $40 million into the company. Investors include Greylock, Benchmark Capital, Matrix Partners and Starvest. As a footnote, if the Mazu team manages to get $35 million in sales, it gets another $22 million in cash. According to UBS, Mazu had about $18 million in bookings over past 12 months.

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