GigaOM » Norwest Venture Partners

ScaleIO joins the pack of pooled storage startups with $12M

Stacey Higginbotham — Tue, 04 Dec 2012 13:00:47 +0000

ScaleIO, a startup offering software-defined storage software, raised $12 million in Series A funding from Greylock Israel, Norwest Venture Partners, and undisclosed private investors. The two-year-old startup will use the money to expand the sales and support of its existing software product.

ScaleIO joins other startups that have launched in the latter half of the year hoping to create pools of storage that can be used by any application in a virtualized environment. Those startups include Nutanix and Convergent.io. Fusion-io has a software product in this space as well.

The idea behind this growing number of products is to help address the problems that virtualization has caused for the storage market by making a storage area network (SAN) look more like direct attached storage. In traditional networks someone would configure a server to point to a SAN but these products take advantage of the ever-growing use of SSDs in the data center and overlay software on top to make a more flexible pool of storage. Most of these products, including ScaleIO’s, also let organizations tie in their existing hard disks and SANs into this pool of storage as well.

The result is that IT organizations can take advantage of fast RAM or nearby flash-based SSDs for applications that need a lot of speed. They can also stitch together several nearby SSDs or RAM to scale out as needed while still using existing storage infrastructure comprised of hard drives as well. ScaleIO also touts that its software can move storage resources around even if a node in its pool goes dark like for example, if a systems administrator shuts down the server. That’s a good indication that the team here recognizes that while the virtual servers in a cloud may be ephemeral but underneath it all are physical machines that must be taken into account.

That’s a good understanding to have when you’re building out software that is designed to create an abstraction layer to manage physical devices. ScaleIO’s team has worked at a huge number of scaled-out storage companies including IBM, Topio (acquired by NetApp), NetApp, LSI, and Xtremio (acquired by EMC). The Palo Alto, Calif.-based startup already has 24 pilot customers and five customers in production including SAP and Colt (a Fidelity company).

Feature photo courtesy of Flickr user getinet

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Elemental gets $13M to sell arms in the online video fight

Stacey Higginbotham — Tue, 08 May 2012 11:00:51 +0000

Sam Blackman, CEO of Elemental

Elemental Technologies has raised $13 million to expand internationally, but the really cool story behind this company is that it is selling its GPU-transcoding servers to everyone from ESPN.com and HBO Go to Comcast. This makes Elemental the arms dealer in the war between the pay TV providers, the content folks and streaming companies such as Netflix. To put it in every venture capitalist’s favorite terms: If this is the gold rush, then Elemental is the company selling the tools.

Perhaps this is why Norwest Venture Partners led the $13-million-funding and joined existing investors General Catalyst, Voyager Capital and Steamboat Ventures in the round. Elemental sells servers packed with the graphics processors sold by Nvidia. The specialty gear is able to convert videos to any format quickly and without wasting a of power. The secret is the use of the common GPU chips that PC gamers use. Because the chips are sold to a wide-consumer audience they are cheap. And because they are designed to perform thousands of small tasks in parallel they are especially suited for the act of converting a video file from one fit for TV viewing to a smaller one designed to fit on an iPhone.

Sam Blackman, CEO of Elemental, explains that the company has 70 employees and is not yet profitable. He was cagey about revenue, saying the five-and-half-year-old company reported sales in the “eight-digits” this year after having sales in the seven digits during 2009 and 2010. When asked how long it would take to get to nine digits he said, “not this year.” Still the company has signed a lot of customers and sees a rosy future ahead of it, especially given the uncertain nature of television in a broadband era.

Blackman says that he believes that many providers are stuck waiting for the regulatory environment to offer a definitive answer to the question of who can control access to the end consumer. For example, says Blackman, if Comcast is allowed to keep its cap other players are likely to avoid trying a Netflix-type model. Blackman doesn’t mind since he’s selling to all comers trying to deliver video to a wide variety of devices, which may be one reason investors are willing to back Elemental, despite a lot of competition. Envivo (which just went public in April), RGBNetworks and others are all offering some form of real-time transcoding to the market.

But Elemental has scored an impressive roster of clients so far, and with this latest round has raised $29.6 million to fund the business. The company also announced that Kevin O’Hara has joined the company as chairman of the board. O’Hara is the current CEO of Integra Telecom and a founder of Level 3 Communications. For those wanting an early look at Elemental, check out this video I did back in 2009 after the company launched.

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Hadoop jumps through hoops, becomes mainstream

Matt Howard, Norwest Venture Partners — Sat, 03 Mar 2012 17:01:24 +0000

One of the things I love most about the software industry is the way new technologies can materialize from unlikely places and get applied in unexpected ways. Hadoop is a great example of this. Conceived by the open source community, Google, Yahoo and others, this programming framework has emerged as a promising solution to the big data problem.

I expect Hadoop to become enterprise-ready within the next 18 months. Encouraged by the arrival of innovative Hadoop vendors, many Fortune 500 companies — including eBay, Bank of America and JP Morgan — are experimenting with Hadoop deployments. As a technologist and an investor in this sector (Norwest Venture Partners, where I am a general partner, is an investor in Hadapt), I believe these investigations are quickly evolving into serious roll-outs. The following five key factors will accelerate mainstream adoption, making 2012 and 2013 Hadoop’s breakout years.

1. SQL provides a “fast pass” to Hadoop

The first hurdle Hadoop must clear is the stigma of its origins. As a product of the open source community, Hadoop and its countless siblings are regarded by traditional IT shops with confusion, suspicion, or even abject terror. Whatever their potential, these revolutionary interlopers threaten huge investments in expensive applications and proprietary technologies.

An SQL interface can help bridge the gap between the future, current and legacy technologies. Organizations are already purchasing Hadoop tools that offer various levels of SQL compatibility. We expect Hadoop to acquire deeper and deeper SQL support — and Hive, an open source SQL interface for Hadoop, is a good start.

In the next 18 months, I think we will see large retailers, financial services, Wall Street and the government using this “fast pass” SQL option to initiate much broader Hadoop deployments.

2. Hadoop performance gets a big boost

One of the leading reasons to use Hadoop is its extreme scalability. To date, that scalability has often come with significant performance penalties, including MapReduce query overhead and a storage layer that requires broad scans across file systems. If big data can’t produce information on demand, then it’s just an albatross.

Fortunately, the entire Hadoop industry — including a rapidly proliferating group of startups (Cloudera, Hadapt, Hortonworks, MapR), the amazingly innovative open source community, and such established vendors as IBM — are aggressively tackling these performance issues. The forthcoming Hadoop v0.23 and subsequent releases will include performance-boosting enhancements, including basic file system performance, minimum MapReduce job latency, and higher-level query interface (e.g. Hive, Apache Pig) performance.

3. Hadoop becomes increasingly reliable

To avoid having a single point of failure, Hadoop needs to address topology and deployment concerns left over from its initial incarnation. Hadoop employs a master node to keep track of data and to determine how to access it. If this “brain” goes down, everything could be at risk without the correct topology and redundancy. Over time, the Hadoop community will make improvements in this area. Cloudera, Hortonworks, MapR and other commercial vendors are already addressing this.

4. Mainstream case studies emerge

Hadoop is a grassroots phenomenon that emerged in the social networking and consumer Internet world. As always, there are early adopters who take risks on the cutting edge, and there are more conservative organizations watching the pioneers from the sidelines.

This played out in 2011 as early customer experiences with Hadoop were shared via conferences, online forums and vendor white papers. Experts think Hadoop is on the edge of a tipping point, as some of the earliest Hadoop implementers move from experiments to adoption. As a result, people implementing Hadoop today are benefiting from the lessons learned by the early pioneers.

In 2012 and 2013, we will see a growing body of case studies and the emergence of best practices as Hadoop technology matures and gets deployed in traditional enterprise environments. In short, Hadoop’s momentum will grow exponentially in the next 18 months.

If becoming mainstream is step four in the technology adoption process, Hadoop will move through step two and into step three this year and next.

5. The architecture evolves

Hadoop applications process vast amounts of data in parallel across many computers, relying upon MapReduce as the enabling distribution framework. Currently, Hadoop tightly couples distributed resource management and a single distributed programming paradigm (MapReduce) into one package. The Hadoop community is now decoupling the two functions. Separating these will provide more control over the different system functions and free up query processing.

Future releases of Hadoop will have an enhanced MapReduce framework and will feature a growing array of alternative distributed computing paradigms. Likely candidates include Message Passing Interface (MPI), distributed shell systems, OpenDremel and Bulk Synchronous Parallel (BSP). With these additional programming and distribution options, Hadoop will be able to support an even greater variety of workloads.

Hadoop is here to stay

Over the next few years, Hadoop will become a common component of the standard IT tool belt. To meet this demand, vendors are starting to package Hadoop into commercial off-the-shelf software (COTS).

Hadoop adoption will build on itself as organizations augment Hadoop solutions and grow ecosystems around them. Before our very eyes, Hadoop is becoming a platform.

Matt Howard is a general partner at Norwest Venture Partners (NVP), where he invests in mobile and wireless, big data, security, rich media, networking and storage sectors. He currently serves on the boards of Avere Systems, Blue Jeans Network, ConteXtream, Hadapt, MobileIron, Retrevo and Summit Microelectronics. He blogs at NVP Blog.

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Startups, If You Can Make Verizon's LTE Network Awesome, There's $1.3B to Be Had

Stacey Higginbotham — Fri, 22 Jan 2010 22:28:10 +0000

There are 1.3 billion venture dollars available for startups that want to play a role in the fourth-generation Long Term Evolution wireless network being deployed this year by Verizon, so I talked to Daniel Deeney, a partner at a venture firm that’s investing some of those dollars, to see what types of companies have a shot at the dough. Deeney is with New Venture Partners, a telecommunications-focused firm that invests primarily in corporate spin-outs and is about to make its first investment under the Verizon LTE program.

The program, called the 4G Venture Forum, was created back in October. Participating venture funds, which also include Charles River Partners, North Bridge Venture Partners, Norwest Venture Partners and Redpoint Ventures, will sit down with Verizon executives each quarter to figure out which startups the wireless carrier is interested in and decide if they represent an investment opportunity.

Deeney said he’s looking at everything from ways to improve capacity and speeds on the LTE network to technologies that allow devices to use bandwidth effectively or make the network smarter. In other words, he’s focused not so much on apps (although he’s interested in those that help enterprises take advantage of LTE connectivity) as on the deep infrastructure that will enable a robust mobile broadband network, one that can support updates from household appliances to peer-to-peer file sharing.

Daniel Deeney

Those kinds of nitty-gritty technology equipment companies can eat up a lot of capital, something most venture firms are especially leery of right now. But Deeney says the fact that many of the startups only need to build gear that works on standards-based IP equipment rather than the proprietary older 2G and 3G network gear will help them keep costs down. However, he also acknowledged that since existing 3G networks are here to stay, in some parts of the network, going all-IP wouldn’t make sense. My hunch is that a lot of the equipment investments will involve gear that can sit on the edge of the network, or technology such as better antennas inside devices.

For example, the first investment he’s hoping to announce within the next month is in a Dallas-based stealth equipment startup that helps boost capacity at the edge of the network. Aside from hardware, software that helps track network or device activity and respond to problems proactively is another area of interest.

Carriers currently have equipment that can measure the type of traffic flowing across the core of the network, but Denney is looking at software that can aggregate traffic from the cell sites at the edge and make suggestions to load balance to improve the capacity quickly, or even in real time. In theory such software may mean fewer dropped calls as people move in and out of various parts of the network.

Using that analytic software to help plan future network buildouts is also of interest to Deeney. Companies that provide software on the devices themselves that can help optimize the way the devices communicate with the network or even schedule tasks in ways that don’t use as much bandwidth could also expect interest from the 4G Venture Forum. For startups, the lure of Verizon as a customer, as well as investment dollars from a contracting industry, is strong. For consumers, the 4G Venture Forum could deliver a better mobile broadband experience.

Image courtesy of Flickr user swanksalot

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Logitech Takes on Cisco, to Buy LifeSize for $405M

Om Malik — Tue, 10 Nov 2009 22:58:23 +0000

Logitech, a Swiss maker of peripherals for computers and digital consumer devices, is buying 6-year-old Austin, Texas-based video conferencing device maker LifeSize Communications for $405 million in cash. LifeSize has raised $80 million in funding from Norwest, Austin Ventures, Norwest Venture Partners, Redpoint Ventures, Sutter Hill Ventures and Pinnacle Ventures. It makes high-definition video conferencing systems that use standard broadband connections and IP technologies to connect distributed offices and locations. The deal will put Logitech in direct competition with Cisco Systems in the hotly contested video conferencing equipment market.

LifeSize is a competitor to Cisco Systems and Tandberg, a Norwegian video conferencing company that Cisco wants to buy for some $3 billion. LifeSize currently has over 9,000 customers and is sold across the world. In a previous post, Stacey pointed out that Cisco’s Telepresence gear “provides an immersive HD experience, is expensive, and is aimed squarely at the high end of the market, where it competes with services such as HP’s Halo. Tandberg gear, on the other hand, is cheaper and aimed at the middle market.”

Tandberg’s biggest competitor is LifeSize. Logitech also owns SightSpeed, a software-based video conferencing product that works with most PC cameras. While SightSpeed and Skype are good for low-end, free video conferencing, most companies want something larger, but don’t want to spend millions. LifeSize fits into that sweet spot, which is why I liked them in the first place.

I first wrote about LifeSize in 2005, when the company was being incubated inside the offices of Norwest Venture Partners, LifeSize’s biggest investor. Norwest partner Vab Goel is a co-founder of the company that’s spearheaded by Craig Malloy. As part of the deal, Malloy will stay at the helm of LifeSize, which will in turn become a division of Logitech.

I was impressed by the company and what it had been able to do. “Using off-the-shelf components, and adding some magical software sauce, these guys have worked out a way to stream HD signals over a one-megabit-per-second connection. I think these are the types of applications which are going to push the demand for broadband,” is what I wrote at the time.

The video conferencing market has exploded since then. Cisco in particular has been touting its vision of telepresence. In his column for GigaOM, Cisco CEO John Chambers said: “High-speed networking enables new human collaboration at a profound level, and such collaboration will radically change the way we think.” Video is part of that change, which is why he spending billions of dollars trying to buy Tandberg.

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As Ad Spending Declines, Magazines Move to Mobile

Jennifer Martinez — Wed, 12 Aug 2009 01:00:38 +0000

Magazine ad spending has declined for the last five years straight, but an iPhone application platform publicly launched today by Mountain View, Calif.-based NearbyNow may help stem the tide. The company seeks to move magazine advertising to mobile phones, and today showed off iPhone apps built by Seventeen Magazine and Runner’s World that were released earlier this summer. The two apps market products from the magazine’s editorial content, and will also feature ads purchased by brands and retailers. The Runner’s World app already displays ads from Nike.

NearbyNow offers a digital shopping service via mobile phones or the web that lets users find and reserve products they’re looking for in local brick-and-mortar stores, as well as directing users to web sites to purchase products online. The company’s iPhone platform provides a template on which publications can build mobile apps that push products used in editorial spreads or from advertising campaigns straight to users on their mobile phones.

While people have traditionally had to buy magazines in order to thumb through the pages of glossy ads, now retailers and brands can reach a larger audience by marketing their ads to people via a big-name magazine’s free mobile apps. For example, Nike paid to sponsor the “Runner’s World Shoe Shop” app, which features a shopping guide for men’s and women’s running shoes based on editorial recommendations from Runner’s World. Nike also paid for ad space within the app that promotes its latest line of running shoes, Nike Lunar Glide.

Meanwhile, the “Seventeen Fashion Finder” app takes advantage of back-to-school season and touts editor-recommended accessories and clothing, as well as features fashion picks from popular Disney star Selena Gomez. Though the app doesn’t have any ads featured on it now, expect some to pop up soon, as Seventeen plans to start selling advertisers joint print and mobile ad packages for upcoming issues.

NearbyNow, which raised $11.75 million in Series C funding round led by Norwest Venture Partners last May, says more magazine publications are set to release iPhone apps in the next few months. A recent report from Veronis Suhler Stevenson forecasts spending on mobile advertising will rise 18 percent to $1.3 billion this year. It’s unclear whether mobile advertising will be the lifesaver that will keep magazines afloat or just another way to siphon ad dollars from print.

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As Android Rollouts Ramp Up, China's Borqs Gets $17.4M

Jennifer Martinez — Fri, 10 Jul 2009 04:00:46 +0000

Borqs, a Beijing-based startup that develops mobile software for handset makers and mobile carriers using Google’s Android OS, says it’s received $17.4 million in Series B funding from Norwest Venture Partners as an increasing number of devices using the platform are being readied for launch. Some 18-20 new Android-based phones are expected to be released this year, including the T-Mobile’s, the successor to the T-Mobile G-1.

Borqs’ investors pushed the 2-year-old startup — whose software allows mobile carriers to create a consistent user interface on their smartphones and thus a “branded” experience for their users — to procure additional capital backing as it faces more demand for its service, its president of international business, David Young, told us. He said the company will use the money to hire more engineers to enhance its product in-house, expand its infrastructure and boost its product portfolio, but that the majority of it will be sitting in the bank as an “extra cushion.” Borqs is currently working with the top carriers in North America and Europe, according to Young. It already has a relationship with China Mobile.

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Social.FM, Formerly Mercora, Shuts Down

Om Malik — Mon, 04 Aug 2008 05:00:20 +0000

Mercora, an early entrant into the social music and music search space that recently rebranded itself as Social.FM, has shut down and suspended operations. After being tipped off by a source, I tried reaching the company’s executives, but haven’t heard from them. The site has gone black.

“The Company is unfortunately no longer in business and therefore cannot continue its service to you. Regards,. Mercora, Inc.” Over on the Social.FM home page, the company said “To our Valued Customers,. We regret to inform you and apologize for this inconvenience, but Social.FM will be shutting down the system on July 31st, 2008.” The MySpace widgets have also gone on the blink.

The Sunnyvale, Calif.-based company launched in June 2005 and had raised $5 million from Norwest Venture Partners. It was started by Srivats Sampath, the former CEO of McAfee.com, and launched with a pretty nifty P2P radio software client.

Social.FM had planned to make money by selling ads next to music searches that were conducted on its P2P network. It eventually lost out to more visible competitors, like Pandora and Last.fm, and changed its strategy. Like many other music-focused startups, the company had faced some tough times when the royalty rates for webcasting music on the Internet were raised.

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RackSpace IPO Filing Hints at Expansion Plans

Stacey Higginbotham — Sun, 27 Apr 2008 03:05:36 +0000

Data center and hosting provider RackSpace Inc., has filed to raise up to $400 million in an initial public offering. Its financials seem generally sound (unlike many tech companies it’s actually profitable), although profits did drop by 10 percent in the last year.

However, rapid expansion (including its investment in the cloud) are to blame for the decline in profits. The company made $362 million last year and more details can be gleaned from its S-1 filing with the Securities and Exchange Commission. Some tidbits of interest include RackSpace spending $7.3 million in power used to operate 36,692 servers in 2007.

In the coming year, the company anticipates expanding its data center facilities by a least 72,000 square feet, and may also opt to find a new data center location outside of its existing facilities. It also plans to launch a platform product for customers who want hosted infrastructure but also have the need and skills to customize the hosted infrastructure to a high degree.

The San Antonio company follows in the footsteps of Google and NetSuite with its auction-style offering. Should the offering go well investors Sequoia Capital and Norwest Venture Partners stand to gain. The two firms hold 11.6 percent and 16.2 percent of RackSpace stock respectively.

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Unisfair Nets $10M for Virtual Trade Shows

Stacey Higginbotham — Mon, 21 Jan 2008 17:00:14 +0000

Virtual meeting company Unisfair has scored $10 million in funding from Sequoia Capital and Norwest Venture Partners after proving that meeting people face-to-face isn’t always necessary or cost effective. As a telecommuter, I’m duty-bound to agree, although I’d rather gouge out my eyes than attend a virtual product launch party.

Still, many people must attend product launches, trade shows and job fairs for a living and doing it online is far cheaper (and greener) than trucking around the world with a trade show booth or the latest company literature. Unisfair doesn’t disclose revenue, but says it grew 350 percent last year after what might be considered a slow start. Founded in 2002, Unisfair decided to go with a virtual-environment product delivered using the software as a service model. Competitors at the time were promoting teleconferencing and online trade shows, but Guy Piekarz, CEO of Unisfair, says now he’s certain his company made the right choice with virtual meetings.

Thanks to the media and corporate attention given to virtual worlds such as Second Life, the idea of virtual trade shows isn’t that far-fetched. But in Unisfair’s secured version of a trade show the avatars can’t fly and the environment isn’t, er, prone to attacks from the air. That’s a plus for Unisfair’s enterprise customers, which include the likes of Cisco Systems, National Instruments and Cognos.

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