QuickView #4 - Enterprise Software

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Recruiting in TheNext Generation of Tech

Sonovate QuickView Series #4

Part One: Enterprise Software


Recruiting in the next generation of enterprise software

Increasingly shaped by cloud services, digitalisation, data analytics, mobility and security, IT is at one of its most interesting points in time. Applications have undergone a massive transformation in the last few years with the evolution from packaged and on-premise software to SaaS-based applications. Big data has revolutionised the way businesses acquire, load, process, analyze and store information and cloud is making it ever cheaper for businesses to put their computing and data storage online.

This coming together of mobilisation, digitisation and consumerisation is providing fertile ground for the next generation of iconic enterprise companies. With investment in software companies increasing 53% from Q3 to Q4 2014, the enterprise software marketplace is experiencing massive growth. According to the MoneyTree Report, a collaborative research initiative between PricewaterhouseCoopers and the National Venture Capital 39% of all investments in Q4, 2014 were in software. Totalling $5,779,452,500, the 461 deals far outsripped other IT areas, including computers & peripherals, IT services and consumer products & services.

Viewing the current landscape, this QuickView provides IT recruiters with a framework to help identify where the most potential is within the enterprise software marketplace.

Source: MoneyTree Report

$5,779,452,500

of all global investments in Q4 2014were in software, totalling

Q42014


Data Insights

As highlighted in our previous QuickView, Big Data is radically changing how businesses think and act. With the advent of Hadoop, data is both less expensive and actionable. Cloudera, a revolutionary enterprise big data platform provider tops the Mattermark list of funding received to March 2015, with $1.2bn - underlining the importance of data to businesses and investors.

Storage

The most significant change for 2015 is the shift from disk-based to flash based storage systems. Businesses have been using hard disks for almost 60 years, and both storage system design and storage management have revolved around them. Flash is truly disruptive - with hard disks capacity is cheap and performance is expensive, but in a flash world, the equation is flipped - capacity is expensive and performance is cheap.

Security

As demonstrated by the Sony hackings, the notion of cybersecurity changed in 2014 and the importance of securing data has never been a higher priority. The never ending cat and mouse game between hackers and security protectors is being played out across all three areas of enterprise and is contributing to a cybersecurity services industry, which is projected to bring in more than $48 billion in revenue next year, up 41 percent from 2012, according to Gartner Inc.

Key Areas to Watch in 2015


TechnologyLayers

Applications

Infrastructure

CRM

Cust

omer

Sup

port

Mar

ketin

g

Fina

nce

HR

Doc

s

Emai

l

Busi

ness

Insi

ght

Data Architecture

DataTransformation

DataTransport

DataExploration/Organisation

Storage Computing Networking

Private / Public Cloud

On-Premise

SaaS

Secu

rity

We view enterprise as a series of layers with security as the encompassing factor. Using this framework, we’ve fleshed out the key aspects within each layer, with the objective of helping recruiters identify the areas with the most potential over the coming pages.


Infrastructure Layer The bottom layer in the enterprise technology chart highlights the three building blocks - storage, computing and networking that are critical whether the end client/user is building in-house or in the the cloud.

Storage

As mentioned, storage is moving through a massive transitional period from disk-based to flash based storage systems. Leading the pack in terms of investment is Pure Storage, ranking 7 on Mattermark’s list. Other key players in the market include; Solid Fire, SimpliVity, StorTrends, Zetta.net, Load DynamiX, Nasuni and Ctera Networks.

Computing

This segment represents the computational tasks which happen at their most basic level - e.g. chips and servers. In spite of a few companies trying to redefine the basic computing element, much of the innovation has been about developing the computing layer into the cloud.

Networking

The emergence of Software-Defined Networking (SDN) - which allows network administrators to manage network services through abstraction of lower-level functionality is eating into the established networking companies market share. The leading disrupter is Big Switch Networks, who very publicly hired Cisco’s top engineer.

As SDN is a very viable option, bigger companies are buying out SDN startups rather than compete. For example:

• VMware acquired Nicira for $1.26 billion

• Juniper acquired Contrail Systems for $176 million

• F5 Networks acquired LineRate Systems for an undisclosed amount ranging between $50 and $100 million


Data Architecture LayerThe middle layer relates to where the data acts within the enterprise world. Big data represents the most exciting and fastest growing due to recent technological changes. Broken into three areas that lie within the ‘big data repository’ each area provides massive scope and opportunity.

Big Data Repository

The big data repository is where information lives. The growing trend is a requirement for systems to store exponentially more data than ever before. Depending on how the business uses, and how often, the data, there are different types of next generation stores, with Hadoop garnering the most attention. Much of Hadoop’s appeal lies in how it is becoming more than just a data platform and many companies are dabbling in Hadoop to see what it can do including; Proctor & Gamble, AutoTrader, Netflix, and Yelp. Will Hadoop’s growth lead to a skill shortage? Not so, says Forrester, in a research paper. Anyone with Java skills will soon become competent in Hadoop - predicting “the shortage of Hadoop skills will quickly disappear as enterprises turn to their existing application development teams to implement projects such as filling data lakes and developing MapReduce jobs using Java.”

Data Transport

Data transport relates to how data is moved around to the right stores for its source - which are varied - logs, sensors, outputs etc. A complex task that was historically performed by solutions like MQseries or TIBCO, this arena is being transformed by big data capable architectures like Apache Kafka. As there is a growing number of applications that require this this data, data transport will be a big market for sure.Data Transformation

Data transformation involves transforming the data-sets into useful formats. The formal name given to this part of the data lifecycles is Extract, Transform, Load (ETL). The real opportunity is, once again, the adaption of data lifecycle process that has been around for a while into a big data architecture. Pentaho, is a leader in this area, with competitors including; Sisense, Zoho, Looker, Jaspersoft, Belladati and DOMO.

Data Exploration

This part of the big data repository is essentially about making sense of data to gain insights or knowledge. Elasticsearch, which makes open source enterprise search software that lets companies manage large sets of information, is making huge headways in this sector and is providing its users and customers a cost-effective and massively scalable way of making sense of their data sets. With 20 million downloads and customers including Foursquare, Path, GitHub and SoundCloud, Elasticsearch is the leading disrupter. Elasticsearch’s main competitor is Solr - which is built using the same Apache Lucerne model. A useful comparison between both can be found at datanami.com.


Applications LayerThe top layer assesses the applications available for businesses to use. The shift from on-premise software to SaaS - a model that delivers on-demand applications that are hosted and managed by the service provider and typically paid for on a subscription basis, has created a leader in nearly all major software categories. From Salesforce to NetSuite, Workday and Marketo - the major verticals have been disrupted and are highly competitive. As developers move to cloud based environments, there is significant opportunity in managing, performance enhancing, and scaling enterprise cloud applications.

What is SaaS?

SaaS applications are designed for end-users, delivered over the web. Some defining characteristics of SaaS include; software is managed from a central location and the software is delivered in a “one to many” model. According to Montclare SaaS 250, the top 10 SaaS providers are:


SecurityAs enterprises have to deal with an ever-mobile workforce and customer base, two trends worth highlighting for 2015 are mobility and cloudification. As data moves from mobile devices to the cloud, traditional ‘perimeter’ security methods, will not be as helpful. This shift is having an effect on hiring and skills required.

According to the 2015 Global Cybersecurity Status Report, 92% of those hiring cybersecurity professionals this year say it will be difficult to find skilled candidates. Within the present marketplace, the largest companies, such as IBM are attempting to capitalize on the emerging technology markets: Cloud, Analytics, Mobile, Social and Security, which are expected to grow to $40bn in revenue by 2018.

Lookout, with 50 million consumer subscribers and millions who pay to use its technology to secure devices is the leader in the mobile security space, joining the $1bn valuation club in 2014. Competitors to Lookout include Symantec, Trend Micro and Kaspersky Lab, which offer their own mobile programs.

92% of those hiring cybersecurity professionals this year say it will be difficult to find skilled candidates


Investment by Industry

Software

Biotecnology

Media and Entertainment

Computers and Peripherals

IT Services

Consumer Producs and Services

Medical Devices and Equipment

Industrial / Energy

Financial Services

Electronics / Intrumentation

Semiconductors

Networking and Equipment

Business Products and Services

Retailing and Distribution

Telecommunications

Healthcare Services

Other

$0bil

Total Investment Amount

Q4 2014Q3 2014

$1bil $2bil $3bil $4bil $5bil $6bil

Investment by IndustrySource PwC/NVCA Money Tree Report, Data: Thompson Reuters

Q4: $5,779,452,50039% total

Q3: $3,784,732,90037% of total

Software ($)Qtr/Qtr 53%

461 deals

429 deals

After years of backing headline-grabbing consumer internet start-ups, venture capitalists are turning their attention to enterprise software startups and backing them in a big way.

During the first half of 2014 the amount of capital invested in these startups grew to over $5.4bn - roughly the same amount that enterprise-facing companies raised in the entire year for 2013, according to data from CrunchBase.

During the last two quarters of 2014, the amount of investment increased 53% and totalled a mas-sive $5.7bn.

The enormity and scale of the investment which represented 39% of all investments made in Q4, 2014 - outstripping all other IT areas including, computers & peripherals, IT services and con-sumer products & services, points to a belief among investors that there’s a huge change com-ing in the way that technology affects business.


Company Total Funding Location StateCloudera $1.2B Bay Area CADropbox $1.1B Bay Area CAPalantir Technologies $950.0M Bay Area CAPure Storage $534.9M Bay Area CADeem $516.9M Bay Area AZNutanix $312.2M Bay Area CAMongoDB $311.1M New York NYMozido $307.2M Austin TXGood Technology $291.3M Bay Area CASimpliVity $276.5M Boston MANewVoiceMedia $261.3M Basingstoke HampshireDomo $248.7M Salt Lake City UTZuora $242.5M Bay Area CARagingWire $230.0M Sacramento CAAvalara $223.6M Seattle WAAtlassian $210.0M Bay Area CASolarflare Communications $209.8M Los Angeles CAActifio $207.5M Boston MAJasper Technologies $205.3M Bay Area CAEvernote $205.0M Bay Area CADocuSign $200.1M Seattle WAPowa Technologies $176.7M London UKCelframe $173.0M New York NYApigee $173.0M Bay Area CAPractice Fusion $157.5M Bay Area CAOkta $155.0M Bay Area CALithium $151.7M Bay Area CASolidFire $150.0M Boulder COikaSystems $147.5M Southborough MAJoyent $146.0M Bay Area CAAnaplan $144.4M Bay Area CAInsideSales.com $143.0M Salt Lake City UTOSIsoft $139.5M Bay Area CAQuickPlay Media $138.7M Toronto CAN-ON

Top 100 Cloud-Based Enterprise Software StartupsRanked by Total Funding, March, 2015(Source: Mattermark)


Company Total Funding Location State

Vidyo $136.4M New York NJApptio $136.0M Seattle WATintri $135.0M Bay Area CAMulesoft $130.5M Bay Area CAVirtustream $129.6M Washington D.C. MDTradeshift $129.0M London CASpiderCloud Wireless $126.0M Bay Area CAMetricStream $125.0M Bay Area CAAnaqua $125.0M Boston MABit9 $123.2M Boston MAServiceMax $122.0M Bay Area CAINVIDI Technologies $120.3M New York NYSlack $120.0M Bay Area CAMirantis $120.0M Bay Area CAAcquia $118.5M Boston VTBTI Systems $116.3M Ottawa CAN-ONCouchbase $116.0M Bay Area CAYext $115.8M New York NYVeracode $114.3M Boston VTTower Cloud $109.0M Tampa FLKaminario $108.0M Boston MAXirrus $105.9M Los Angeles CAUnited Information Technology Co., Ltd $105.9M Beijing ChinaAppDirect $105.8M Bay Area CAMedallia $105.0M Bay Area CAGigya $104.8M Bay Area CAmoka5 $104.3M Bay Area CASugarCRM $104.1M Bay Area CAElasticsearch $104.0M Amsterdam NetherlandsTwilio $103.7M Bay Area CASpring Wireless $103.1M Seattle WAGoodData $101.2M Bay Area CADonuts $101.1M Seattle WACleversafe $100.4M Chicago ILDigitalOcean $100.2M New York NYREALTIME.CO $100.0M Los Angeles CA



Company Total Funding Location StateGitHub $100.0M Bay Area CAAxcient $99.2M Bay Area CABlue Jeans Network $98.5M Bay Area CAKony Solutions $98.4M Orlando FLTelogis $95.0M Los Angeles CAPluribus Networks $92.8M Bay Area CATeneros $92.5M Bay Area CADataGravity $92.0M Boston NHGlassHouse Technologies $91.3M Boston MAClarizen $91.0M Bay Area CARapid7 $91.0M Boston MAAppcelerator $90.9M Bay Area CATanium $90.8M Bay Area CATaulia $90.7M Bay Area CAClarabridge $90.3M Washington D.C. VAAvePoint $90.0M New York NJAccessData $90.0M Lindon UTHuddle $89.2M Bay Area CAInstructure $89.1M Salt Lake City UTClearSlide $89.0M Bay Area CACoupa Software $89.0M Bay Area CAOptimizely $88.2M Bay Area CASpredfast $88.1M Austin TXThinking Phone Networks $87.9M Boston MAPlex Systems $86.5M Detroit MIHost Analytics $85.9M Bay Area CADigital Signal $85.9M Washington D.C. VAEMN8 $85.8M San Diego CAScienceLogic $84.0M Washington D.C. VAZenefits $83.6M Bay Area CA


Reference Shelf

MoneyTree ReportHow flash changes the storage equationTop Fastest Growing Storage Companies in 2014Cisco Loses Top Engineer to its Competitor Big Switch Networks, a Rising StartupHadoop: the elephant in the computer roomSolr or Elasticsearch–That Is the QuestionMontclare SaaS 2502015 Global Cybersecurity Status ReportLookout Nabs $1 Billion-Plus Valuation in New FinancingMattermark

Recruiting & HR

QuickView #4 - Enterprise Software