Inside Advanced Scale Challenges|Monday, February 27, 2017
  • Subscribe to EnterpriseTech Weekly Updates: Subscribe by email

Cloud Investments & the Future of Cloud Computing 

(Lukiyanova Natalia frenta/Shutterstock)

The cloud industry is evolving – a point that is made abundantly clear by the scope of industry investments being made today. In the early days of cloud, investments went toward companies that were working to create acceptable usable cloud experiences for users. These companies were focused on fundamentals, such as cloud security and cloud maintenance.

In 2005, for instance, we saw the birth of Puppet, whose interface and reporting tool helped businesses facilitate management and configuration tasks. Puppet secured $85.5M in five rounds of funding from eight investors. Today, Puppet is considered one of the industry standards for automating the delivery and operation of the software that powers “everything around us,” and has five offices, more than 400 employees and 30,000 users.

The appetite for cloud configuration solutions pressed on and in 2008, Opscode was launched. Its “Chef” solution offered businesses a framework for managing system configuration to the cloud. The company was deemed revolutionary by investors at the time, receiving $64M in funding by 2013, and then securing another $40M in Series E funding in 2015.

Greg Arnette of Sonian

Greg Arnette of Sonian

We also saw the emergence of, and noteworthy valuations from, companies focused on cloud optimization, such as CloudCheckr, which helped optimize costs by enabling Amazon Web Services (AWS) users to see and understand what was happening within their AWS deployments; and performance optimization companies, like New Relic – a Software-as-a-Service (SaaS) solution that enabled developers to efficiently detect, diagnose and fix application performance problems in real-time. While CloudCheckr received $2.4M in funding, Net Relic accumulated $214M in financing by 2014 before going public.

As these, and other companies, have laid the foundation for sound cloud technology – and with time and backing from investors – the cloud has been warmly received and broadly used, with applications being tapped on a daily basis by both businesses and consumers.

Now, we’ve entered the next phase of cloud – a phase marked by investments in specialized tools built to meet the needs of different user types. These tools address new problems, or problems that didn’t exist until the market evolved enough to create them.

For instance, and to no surprise for those attuned to cloud industry issues, security has emerged as a top concern. As such, we’re seeing new companies like Conjur, a cloud-native directory, authorization, audit and compliance software, start to win over the investment community. Conjur has already secured $2.63M in financing since its 2011 founding.

DevOps tools are also getting attention. Datadog, a monitoring service that brings together metrics and events from servers, databases, applications, tools and services to present a unified view of the infrastructure, has received $147.9M in funding from six investors since its 2010 launch.

As the cloud continues to evolve, we can expect investments to continue to go toward companies that address emerging industry problems, as well as companies that enhance the cloud experiences for niche user bases. In particular, companies whose tools focus on data analytics and insights will become increasingly popular, as they have the ability to enhance security by identifying potential threats and steer companies by unearthing opportunities for business optimization. Also popular will be companies whose tools manage “second and third” order cloud problems, such as deployments for functions-as-a-service (AWS Lambda and Google Cloud Functions).

With that in mind, businesses should start paying attention to which new cloud companies are receiving significant financial backing. While they may be no-name organizations now, they could very well become the next disruptors, offering the solutions enterprises need to overcome departmental and general business hurdles and ultimately gain competitive advantage.

Greg Arnette is CTO at Sonian, Inc.

Add a Comment

Share This