Even though Instart has emerged from stealth mode, the company is keeping the technology behind its Software as a Service (SaaS) a secret for now. (It won’t say how many customers it has, either.) But suffice it to say that the Instart software won’t require any major reworking on the part of developers. “We do not impose any burden (that) you need to change your code or change development methodology,” said Manav Mital, a co-founder and the company’s CEO. “The process is very easy to come in.”

At the moment, Instart, based in Mountain View, Calif., is aimed primarily at web-based applications, not native apps, Mital said.

Tenaya Capital led Instart’s Series B round, alongside contributions from Andreessen Horowitz, Greylock Partners, Sutter Hill Ventures and other investors. Total venture funding in Instart is now at $26 million. The new funding will help Instart add sales and marketing and also work more on their product.

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But over the last year, the discussion has morphed more into how cloud offers companies flexibility and agility and there’s growing realization that for stable, non-variable workloads, cloud — even public cloud — may not be the cheapest option at all. But that flexibility for intermittent or variable workloads remains the public cloud’s siren call. Check out posts from Virtual Geek and Cloudave for more thinking on this trend.

So the reason to go to cloud is no longer price but being able to move fast — deploy, re-deploy, and un-deploy workloads as needed without having to buy servers and software that could become shelfware next week or next month.

IaaS follows SaaS arguments of the past

What’s interesting to me is that this debate is evolving much like the discussion around Software as a Service (SaaS) did a decade or so ago. Initially, when Salesforce.com was coming into its own, most of the sales pitch was around price. Salesforce was so much cheaper than Siebel Systems. (Remember Siebel Systems? It’s now part of Oracle).

At that time, Microsoft was getting into the CRM business with its own on-premises edition. It’s counter-pitch was: “Sure, Salesforce.com may be cheaper at first, until you use it for three years. Then Microsoft on-premises CRM is cheaper.”

Of course, when Microsoft started rolling out its own cloud-based CRM, that price-based argument dissipated. The new thinking was that “cloud” CRM is better because everyone’s on the same, latest release and you can add/subtract users easily. Salesforce.com’s message likewise evolved to mirror that same message — especially as the more feature-rich Salesforce.com package options started to get um, quite pricey. Then Salesforce’s benefits became that it freed companies from the tedium and expense of on-site server and software upgrades. You could focus on business and leave the IT heavy lifting to your provider.

Everest Group partner Scott Bils agrees that the thinking around cloud deployment motivation is happening. “No doubt the conversation has shifted from [total cost of ownership] to agility,” he said. A survey Everest conducted of about 350 attendees at last week’s Cloud Connect show reflects that trend.

Cloud Connect 2012 Enterprise Cloud Adoption Survey

Customers surveyed cited reduced time to provision applications and infrastructure as their primary reason to move to cloud, followed by the cloud’s overall flexible capacity. TCO, on the other hand, came in way down the list. Now, remember, these people were at a cloud computing conference, so they may be more up to speed on these issues than the average IT user. But as Bils noted: “Interestingly, vendors still mistakenly believe [cost remains] the most important factor.”

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The approach differs from the application performance management for mobile devices available from Compuware and Hewlett-Packard, as “they’re generating fake mobile loads in order to tell you how a fake mobile app is doing,” said Jim Gochee, senior vice president of product at New Relic. Compuware disputes Gochee’s claims, saying in a Thursday statement that its application performance monitoring software lets users monitor actual end users’ experiences on mobile devices. Still, New Relic responded by saying “New Relic is the only vendor with monitoring technology on the mobile device that can capture real-time data for every user and every version of the mobile app.”

With its mobile monitoring abilities, New Relic also differentiates itself from fellow application performance management vendor AppDynamics, which has been on a capital-raising spree of its own.

New Relic’s new mobile app support highlights the importance of smartphones and tablets in the cloud computing revolution, for consumer and enterprise applications alike. And the trend will likely persist. Forrester Research projects sales of mobile devices will keep growing. A 2012 Pew Research Center survey found that 25 percent of kids aged 12-17 use their phones — as opposed to PCs — as their primary means of accessing the internet. That figure is 15 percent for adults. In other words, mobile apps could become the main route for customers to communicate with businesses. That’s why providing better monitoring for them is a smart move.

This story was updated on Thursday to add comments from Compuware and New Relic.

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Nipendo’s Software as a Service (SaaS)

The first version of the product became available in 2010, Co-founder and CEO Eyal Rosenberg said. Now several enterprises in Israel use the product, along with some in the United States, such as Hewlett-Packard, IBM and Pfizer. The customer count has passed 3,500, Rosenberg said.

Nipendo faces competition from IBM’s Sterling Commerce and SAP’s Ariba. But legacy systems can take months to connect a vendor and a supplier, Rosenberg said, and Nipendo can do that in just a few hours, and it can also cooperate with enterprise-resource planning products from legacy vendors. As for newer competitors, such as Tradeshift, Rosenberg said, “The competitive advantage … is that we cover a much deeper space of this area, where we manage the whole process and we validate everything.”

Enterprises certainly can benefit from software that brings together invoices and other kinds of paperwork, instead of keeping it spread out on paper and in emails. The question is whether Nipendo will stand out as the top SaaS choice internationally.

This story was corrected on March 12 with the correct spelling of the venture-capital company that funded Nipendo, Horizons Ventures. Horizon Ventures, a different company, has not funded Nipendo.

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Anaplan will use its new funding to expand its customer base, improve its products and build out more data centers, said Fred Lalayaux, Anaplan’s president and CEO. Currently Anaplan runs one data center in Virginia and one in the San Francisco Bay Area. More will come online later this year in Amsterdam, Las Vegas and Singapore, he said.

Lalayaux acknowledges an abundance of competition. But he believes the company can deliver answers to simple business questions more quickly than in-memory databases from legacy vendors such as Oracle and SAP, while also providing employees with fresh information more quickly than Microsoft spreadsheets and databases. And smaller cloud-based financial-planning companies, such as Adaptive and Host Analytics, can’t predict the implications of complex problems as well as Anaplan’s software, he said.

Anaplan has racked up around 60 customers, including McAfee, Pandora and Salesforce. The new funding could help Anaplan chip away at still more of the market.

As Anaplan expands its own infrastructure to support its Software-as-a-Service (SaaS) business, it has begun talking about building a custom appliance for its own data centers and possibly for clients to have on premise as well, Lalayaux said. On the software end, he said, an application exchange for users to share among themselves is in the works.

Meritech Capital Partners led the new investment, and previous investors Granite Ventures and Shasta Ventures contributed as well. With the new funding, Anaplan has raised a total of around $49 million.

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Whereas application-performance-management providers such as AppDynamics and New Relic help clients zero in on problematic code inside applications, Boundary looks out for issues slowing down the network, including the application itself.

Based in San Francisco, Boundary has more than doubled its workforce, going from 12 employees to 28 since Read joined the company last January. Since launching in November 2011, Boundary has grown its clientele to 600 customers, 76 of whom pay for the company’s services. And the amount of data flowing into the company’s infrastructure from clients has grown substantially, from less than half a terabyte to more than 5 terabytes daily. For comparison Facebook stores 1 percent of that amount every 24 hours, according to a November post from the social networking company.

Amount of network and application data Boundary has processed per day in recent months

Annual revenue has gone up, too, although Read declined to provide figures.

Some infrastructure hiccups have accompanied all that growth.

“So definitely as you continue to scale the system, it’s very difficult to test a system like this to unlimited scalability, and so as you continue to push more and more data then it will show itself in different parts of our platform, and different tiers in the application may start to run out of horsepower, or we may start to hit certain limitations in particular areas,” Read said. “We’ve seen that twice already … . In one case, we had to use solid-state disks instead of physical disks. … In another case, we’ve had to add more servers and more processing thru that infrastructure, to deal with us starting to get to capacity limits in what we could be processing.”

More challenges could lie ahead, Read said.

As more clients sign up for monthly or yearly contracts, more data is entering the equation. Boundary could open a second data center, exclusively for paid users, to offer better service, Read said. A service that processes one gigabyte is available to users free of charge.

“With just the sheer volume of data being dealt with so very, very quickly, and so much insight given quickly into that data, this is something where we’re really starting to move into ground that’s never been attacked before,” Read said. And as that data grows it seems so far Read has been able to scale Boundary’s infrastructure. So far he said that the amount the company spends on infrastructure is declining as a percentage of revenue, which is to be expected since the company over-provisioned on its hardware in the early days.

However, as time passes and Read contemplates adding more capacity, he’s confident that Boundary can continue to scale both the infrastructure and its business model. Given how useful network monitoring can be for cloud-based applications Boundary should prepare for more customers and more competition, such as the newly launched Lyatiss.

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NetSuite CEO Zach Nelson

Las Vegas-based Retail Anywhere was a customer/partner and since NetSuite wants to offer a wide range of retail capabilities for both e-commerce and physical stores, the move was a natural one, NetSuite CEO Zach Nelson told me.

“They built their point-of-sale system atop our SuiteCloud and we have about 30 joint customers ranging from very small retailers to a new multi-billion-dollar retailer that we’ll announce later,”Nelson said. “The magic of Apple is that its physical stores and online stores run on the same backend — that’s what we will offer,” Nelson said. SuiteCloud is NetSuite’s platform-as-a service analog to Salesforce.com’s Force.com.

There’s been a buying spree by both SaaS players like Salesforce.com and legacy IT vendors including IBM, Oracle and SAP to bulk up software services delivered from a cloud. NetSuite itself bought OpenAir for its services capability in 2008 and QuickArrow in 2009. Don’t bet that this SaaS shopping will stop anytime soon.

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The Chandler, Ariz.-based company, which offers a SaaS suite comprising both CRM and marketing automation to small companies, will use the new money to educate small businesses about the value of an all-in-one SaaS suite and to add functions to CRM and lead generation services, Infusionsoft CEO and Co-Founder Clate Mask told me.

Infusionsoft CEO and co-founder Clate Mask.

In November, Hubspot, another marketing automation player, netted $35 million in mezzanine funding and just before Christmas, Oracle said it was shelling out $871 million to buy Eloqua, another, more enterprise-focused, marketing automation vendor. All of these vendors aimto help customers find and qualify leads — from online or other ads, from Facebook, from Twitter and other sources and convert them into actual sales. Many companies now use a hodgepodge of different processes and products for this purpose.

While there is some contention with Hubspot, Infusionsoft targets smaller companies — those with 25 employees or fewer and more than $100,000 in annual revenue — of which there are an estimated 27 million in the US alone — while Hubspot focuses on the bigger companies in the small and medium business (SMB) market, Mask said.

Infusionsoft offers these companies CRM integrated with marketing automation — the practice of culling and promoting leads. “On the CRM side we compete with Salesforce.com and Zoho while on the marketing automation side we see Marketo, Eloqua and Hubspot. “But we’re the only sales and marketing company that is 100 percent focused on truly small businesses — of which there are 27 million in the US alone,” Mask told me in an interview.

Doug Burgum, founding partner of Arthur Ventures and the executive who led Microsoft’s business applications group, will advise Infusionsoft, Mask said. The company has 350 employees but plans to staff up to more than 1,000 over three years .

This round brings total funding to about $74 million. Other, earlier, investors include Mohr Davidow Ventures and Signal Peak Ventures.

There’s been a lot of talk that chief marketing officers (CMOs) will soon control more IT spending than CIOs. I’m not necessarily buying that contention — especially since many of those stories seem to be written by CMOs, but it’s clear that marketing departments have their own budgets so tech vendors that can speak their language and offer value could do well. As long as that’s the case, don’t expect this category to calm down anytime soon. Feeding that fire, Mask said to stay tuned for an Infusionsoft acquisition in the coming months.

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