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Salesforce’s Kathy Baxter is coming to TC Sessions: SaaS to talk AI
As the use of AI has grown and developed over the last several years, companies like Salesforce have tried to tap into it to improve their software and help customers operate faster and more efficiently. Kathy Baxter, principal architect for the ethical AI practice at Salesforce, will be joining us at TechCrunch Sessions: SaaS on October 27th to talk about the impact of AI on SaaS.
Baxter, who has more than 20 years of experience as a software architect, joined Salesforce in 2017 after more than a decade at Google in a similar role. We’re going to tap into her expertise on a panel discussing AI’s growing role in software.
Salesforce was one of the earlier SaaS adherents to AI, announcing its artificial intelligence tooling, which the company dubbed Einstein, in 2016. While the positioning makes it sound like a product, it’s actually much more than a single entity. It’s a platform component, which the various pieces of the Salesforce platform can tap into to take advantage of various types of AI to help improve the user experience.
That could involve feeding information to customer service reps on Service Cloud to make the call move along more efficiently, helping salespeople find the customers most likely to close a deal soon in the Sales Cloud or helping marketing understand the optimal time to send an email in the Marketing Cloud.
The company began building out its AI tooling early on with the help of 175 data scientists and has been expanding on that initial idea since. Other companies, both startups and established companies like SAP, Oracle and Microsoft, have continued to build AI into their platforms as Salesforce has. Today, many SaaS companies have some underlying AI built into their service.
Baxter will join us to discuss the role of AI in software today and how that helps improve the operations of the service itself, and what the implications are of using AI in your software service as it becomes a mainstream part of the SaaS development process.
In addition to our discussion with Baxter, the conference will also include Databricks’ Ali Ghodsi, UiPath’s Daniel Dines and Puppet’s Abby Kearns, as well as investors Casey Aylward and Sarah Guo, among others. We hope you’ll join us. It’s going to be a stimulating day.
Buy your pass now to save up to $100, and use CrunchMatch to make expanding your empire quick, easy and efficient. We can’t wait to see you in October!
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OwnBackup reels in $240M Series E on $3.35B valuation, up from $1.4B in January
OwnBackup, the late-stage startup that helps companies in the Salesforce ecosystem back up their data, announced a $240 million Series E today at a $3.35 billion valuation. The latter is up from $1.4 billion in January when the company announced a $167.5 million Series D.
Alkeon Capital and B Capital Group co-led today’s investment, which also included BlackRock Private Equity Partners and Tiger Global along with existing investors Insight Partners, Salesforce Ventures, Sapphire Ventures and Vertex Ventures. The company has now raised close to $500 million, with more than $455 million coming since last July.
That’s a lot of capital, but OwnBackup CEO Sam Gutmann says that as the Salesforce ecosystem has grown, which includes not only Salesforce itself, but companies like Veeva and nCino, business has been booming, growing 100% year-over-year since 2018. That kind of growth gets investor attention, and Gutmann reported a lot of inbound investor interest in this round.
What’s more, the company announced that it will now support the same type of backup for Microsoft Dynamics 365 customers, thereby greatly expanding its potential market. “We’re also announcing that we are expanding into the Microsoft ecosystem specifically around Microsoft Dynamics 365’s huge ecosystem. I think it’s the second-largest B2B SaaS ecosystem beyond Salesforce. We’re just getting started there, but super excited about the opportunity,” he said.
The company also sees the opportunity to grow the business through acquisition. Over the last year, it bought two small companies, but he says that was more focused on acquiring specific talent to develop the platform, while future acquisitions could be more focused on expanding the business itself.
As the company takes on this kind of investment, Gutmann sees an IPO possibility at some point in the future, but for now he’s concentrating on growth. “We’re not focused on exiting. We’ve really focused on developing what is already a huge market and growing into an even bigger market, continuing to expand with a business that has great unit economics and continues to grow nicely,” he said.
The company has ballooned to 500 employees this year, with plans to double that number in the next year. As he does that, Gutmann says that hiring in general is challenging, but he is always looking to find ways to diversify his workforce. “It’s really, really hard. Our hiring managers definitely focus on [diversity], but at the end of the day, we want the best employees for the job. I think we’ve made a lot of strides. We’re working with one of our largest investors, Insight, who is co-sponsoring a program to train, more on the junior side, some underrepresented minorities in technical fields and bring them on as full-time employees after that program,” Gutmann said.
Gutmann says his offices have remained open throughout the pandemic, but nobody was required to come in. In fact, he says that his company is one of the few that has actually added office space to make it easier to distance. The company, which is located in New Jersey, has also expanded space outdoors for working outside when the weather permits.
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Bluecore lands $125M Series E on $1B valuation as e-commerce personalization grows
During the pandemic, especially when we were in lockdown, just about every retailer had to build its online presence and do it quickly. As people move to shop online in larger numbers, being able to personalize that experience has become more crucial. That made the pandemic a pivotal moment for Bluecore, an e-commerce personalization platform, and today the company announced a $125 million Series E on a $1 billion valuation.
Existing investor Georgian led the round, with participation from other existing investors FirstMark and Norwest, along with new investor Silver Lake Waterman. Today’s investment brings the total raised to $225 million, according to the company.
Until fairly recently, Bluecore CEO and co-founder Fayez Mohamood says that retail outreach was mostly about driving traffic to brick and mortar stores or to the company website, but as more business gets conducted online, it has changed how brands have to interact with their customers.
“We believe in that shift, and Bluecore is a retail-specific, multichannel personalization platform, and we combine basically three types of data. First is customer identity. Second is shopper behavior. And then thirdly and most importantly, the product catalog of a retailer, and using that we drive personalized experiences on various channels,” Mohamood explained.
The company was founded in 2013, and has been able to evolve the notion of personalization since then in a significant way. Mohamood says the pandemic really pushed things into the digital realm where his company’s strength lies, and that’s one of the primary reasons they are taking on this funding.
“Personalization has always been important, but I think the value retailers can derive from it has dramatically accelerated as digital became a bigger and bigger portion of everybody’s revenue stream. And over the last year, that became even more critical,” he said.
As the company’s growth has accelerated, so has the hiring. In May 2020, Bluecore had 236 employees; today it has more than 300, and it’s shooting to be over 400 by the end of the year. He says that as he grows the company, diversity and inclusion is a crucial component to have the employee base reflect the diversity of the customers they serve.
“It starts with the executive team, so I’m extremely proud of the fact that on our executive team close to half our team is female. We have a committee that is represented by the core employees that is a diversity, equity and inclusion committee where we have thoughts and ideas and most most importantly actions on how we can build a better diverse, inclusive workplace. And that translates it into OKRs,” he said.
As a Series E company with a billion-dollar valuation, Mohamood can see becoming a public company at some point, but it is not an immediate goal, as he pursues growth over profitability. “The way we think about it is we have this brand that’s going to help us invest in our product capabilities, our leadership capabilities and our go-to-market capabilities to build something that has the ability to [be a public company some day]. Having said that, we’re pursuing growth, and if that’s the goal, we find that staying private helps us do that,” he said. And with $125 million of runway, the company has plenty of freedom to take its time.
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Reserve Trust raises $30.5M to become the ‘Stripe for B2B payments’
Reserve Trust, a Denver-based financial services provider, has raised $30.5 million in a Series A round led by QED Investors.
FinTech Collective, Ardent Venture Partners, Flywire CEO Mike Massaro and Quovo founder and CEO Lowell Putnam also participated in the financing, which included $17.9 million in secondary shares. It brings the startup’s total raised since its 2016 inception to $35.5 million.
Reserve Trust describes itself as “the first fintech trust company with a Federal Reserve master account.” What does that mean exactly? Basically, a federal reserve master account allows Reserve Trust to move dollars on behalf of its customers directly, via wire and ACH payment rails, without an intermediate or partner bank.
Historically, only banks were able to access these payment rails directly, which left both domestic and international fintechs “with limited partner options, poor technology and slow implementations when it came to embedding high-value B2B payments,” says COO Dave Cahill. Reserve Trust touts that its technology and services give companies all over the world the ability to “seamlessly move money via the first cloud-based payment system connected directly to the Federal Reserve” since it is not limited by legacy banking systems.
Image Credits: CEO Dave Wright and COO Dave Cahill / Reserve Trust
In conjunction with the fundraise, Reserve Trust is also announcing that Dave Wright has been named CEO and Cahill joined as COO. The pair worked together previously at SolidFire, a flash storage startup that Wright founded and sold to NetApp for $870 million in 2016.
Reserve Trust works with businesses that seek to embed domestic and cross-border B2B payment by offering them the ability to store funds in custody accounts that are backed by its Federal Reserve master account.
The history of the company relates back to the global financial crisis. After the crisis, banks in the U.S. went through a process called derisking, which meant they shed businesses that on a risk return basis weren’t as strong as other businesses. One of those included the handling of U.S. dollar payments, particularly in emerging countries.
“One of the consequences of this is that it became significantly more difficult and expensive for businesses and smaller economies to trade and move U.S. dollars around the world,” Wright told TechCrunch. “And the founders of Reserve Trust saw this opportunity to build a new type of financial institution that was focused on helping to provide U.S. dollar payment services, especially to emerging fintechs in markets around the world, and helping to reconnect those economies to global trade.”
But rather than start a bank, the founders (Dennis Gingold, Justin Guilder) navigated a previously unexplored part of regulatory waters to create a state-chartered trust company with a Federal Reserve master account.
“That’s something that had never really been done before,” Wright added. “Pretty much every other trust company has to work through banks for all their payment services. Reserve Trust is the first that has actually managed to get a Federal Reserve master account and can process payments directly with the Federal Reserve.”
The complex process took about three years, and in 2018, the company got a Federal Reserve master account and started providing U.S. dollar custody and payment services for fintechs all over the world. Reserve Trust began to see strong demand from payment and fintech companies that were struggling to develop strong partner bank relationships, even though fundamentally there wasn’t any reason the banks couldn’t work with them.
“They found working with banks to be a slow process, one that didn’t involve a lot of technology expertise on the side of the banks, and it was really inhibiting their ability to develop their technology,” Wright said. And that was even here in the U.S. Today, more than half of its business is from domestic fintechs, although Reserve Trust still has a strong international presence as well.
The new funds will mainly go toward helping the company scale to handle what Wright describes as “a fairly overwhelming amount of demand” and toward building out the team, the technology and the services it needs to address the payment needs of larger, faster growing fintechs around the world.
“Most of our customers today are small and midsize fintechs, but now we’re seeing demand for much larger fintechs that have much higher payment volumes and are involved in embedded banking and B2B payments,” Wright said. “They are looking for a stronger banking partner than what they’ve been able to find among the role of traditional banks.” Customers include Unlimint and VertoFX, among others.
QED Investors partner Amias Gerety and FinTech Collective principal Matt Levinson are bullish both on Reserve Trust’s history and its potential.
The pair point to payments giant Stripe as an example of how far Reserve Trust can go.
“Stripe has significant market share doing merchant acquiring and processing e-commerce payments for the consumer,” Levinson said. “B2B payments is significantly bigger in terms of volume, so we’re talking about well over $20 trillion of addressable payment flow. But there’s no real technology company that’s brought the modern payments platform to market without being beholden to legacy banks. And that’s why we’re so excited about this business.”
Reserve Trust, he added, is giving businesses a way to facilitate B2B payments that “are smarter, faster and cheaper.”
Gerety agrees.
“Despite all the excitement around digital payments and infrastructure, there is still no fintech that can offer direct integration with the U.S. payment system,” he said. “With Reserve Trust, we are creating foundational infrastructure to hold and move payments globally and at scale.”
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Marvell nabs Innovium for $1.1B as it delves deeper into cloud ethernet switches
Marvell announced this morning it has reached an agreement to acquire Innovium for $1.1 billion in an all-stock deal. The startup, which raised over $400 million according to Crunchbase data, makes networking ethernet switches optimized for the cloud.
Marvell president and CEO Matt Murphy sees Innovium as a complementary piece to the $10 billion Inphi acquisition last year, giving the company, which makes copper-based chips, more ways to work across modern cloud data centers.
“Innovium has established itself as a strong cloud data center merchant switch silicon provider with a proven platform, and we look forward to working with their talented team who have a strong track record in the industry for delivering multiple generations of highly successful products,” Marvell CEO Matt Murphy said in a statement.
Innovium founder and CEO Rajiv Khemani, who will remain as an advisor post-close, told a familiar tale from a startup CEO being acquired, seeing the sale as a way to accelerate more quickly as part of a larger organization than it could on its own. “As we engaged with Marvell, it became clear that our data center optimized portfolio combined with Marvell’s scale, leading technology platform and complementary portfolio, can accelerate our growth and vision of delivering breakthrough switch silicon for the cloud and edge,” he wrote in a company blog post announcing the deal.
The company, which was founded in 2014, raised more than $143 million last year on a post-money valuation of $1.3 billion, according to PitchBook data. The question is, was this a reasonable deal for the company given that valuation?
No company wants to sell for less than it was last valued by its investors. In some cases, such deals can still be accretive for early backers of the selling concern, but not always. In this case TechCrunch is not privy to all the details of the Innovium cap table and what its later investors may have built into their deals with the company in the form of downside protection; such measures can tilt the value of the sale of a company more toward its later and final investors. This is usually managed at the expense of its earlier backers and employees.
Still, the Innovium deal should not be seen as a failure. Building a company that sells for north of $1 billion in equity value is impressive. The deal appears to be slightly smaller in enterprise value terms. In the business world, enterprise value is a useful method of valuing the true cost of an acquisition. In the case of Innovium, a large cash position, what was described as “Innovium cash and exercise proceeds expected at closing of approximately $145 million,” lowered the cost of the transaction to a more modest $955 million in net outlays.
Our general perspective is that the sale is probably not the outcome that Innovium’s backers had hoped for, but that it may still prove lucrative to early workers and early investors, and still works at that lower figure. It’s also notable how in today’s market of mega-rounds and surfeit unicorns, an exit north of the $1 billion mark in equity terms can be viewed as a disappointment in any terms. Innovium is selling for around the price that Facebook paid for Instagram in 2012, a deal that at the time was so large that it dominated technology headlines around the world.
But with so much capital available today, private valuations are soaring and mega deals abound. And recent rounds north of $100 million, much like Innovium’s 2020-era, $143 million round, can set companies up with rich valuations and a narrow path in front of them to beat those heightened expectations.
What likely happened? Perhaps Innovium found itself with more cash than opportunities to spend it; perhaps it simply needed a large partner to help it better sell into its market. With expected revenues of $150 million in Marvell’s fiscal 2023, its next fiscal period, Innovium did not fail to reach scale. It may have simply grown well as a private, independent company, and stalled out after its last round.
Regardless, a billion-dollar exit is a billion-dollar exit. The deal is expected to close by the end of this year. While both company boards have approved the deal, it still must clear regular closing hurdles, including approval by Innovium’s private stock holders.
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Salesforce steps into RPA buying Servicetrace and teaming it with Mulesoft
Over the last couple of years, robotic process automation or RPA has been red hot with tons of investor activity and M&A from companies like SAP, IBM and ServiceNow. UIPath had a major IPO in April and has a market cap over $30 billion. I wondered when Salesforce would get involved and today the company dipped its toe into the RPA pool, announcing its intent to buy German RPA company Servicetrace.
Salesforce intends to make Servicetrace part of Mulesoft, the company it bought in 2018 for $6.5 billion. The companies aren’t divulging the purchase price, suggesting it’s a much smaller deal. When Servicetrace is in the fold, it should fit in well with Mulesoft’s API integration, helping to add an automation layer to Mulesoft’s tool kit.
“With the addition of Servicetrace, MuleSoft will be able to deliver a leading unified integration, API management and RPA platform, which will further enrich the Salesforce Customer 360 — empowering organizations to deliver connected experiences from anywhere. The new RPA capabilities will enhance Salesforce’s Einstein Automate solution, enabling end-to-end workflow automation across any system for service, sales, industries, and more,” Mulesoft CEO Brent Hayward wrote in a blog post announcing the deal.
While Einstein, Salesforce’s artificial intelligence layer, gives companies with more modern tooling the ability to automate certain tasks, RPA is suited to more legacy operations, and this acquisition could be another step in helping Salesforce bridge the gap between older on-prem tools and more modern cloud software.
Brent Leary, founder and principal analyst at CRM Essentials says that it brings another dimension to Salesforce’s digital transformation tools. “It didn’t take Salesforce long to move to the next acquisition after closing their biggest purchase with Slack. But automation of processes and workflows fueled by real-time data coming from a growing variety of sources is becoming a key to finding success with digital transformation. And this adds a critical piece to that puzzle for Salesforce/MuleSoft,” he said.
While it feels like Salesforce is joining the market late, in an investor survey we published in May, Laela Sturdy, general partner at CapitalG, told us that we are just skimming the surface so far when it comes to RPA’s potential.
“We’re a long way from needing to think about the space maturing. In fact, RPA adoption is still in its early infancy when you consider its immense potential. Most companies are only now just beginning to explore the numerous use cases that exist across industries. The more enterprises dip their toes into RPA, the more use cases they envision,” Sturdy responded in the survey.
Servicetrace was founded in 2004, long before the notion of RPA even existed. Neither Crunchbase nor PitchBook shows any money raised, but the website suggests a mature company with a rich product set. Customers include Fujitsu, Siemens, Merck and Deutsche Telekom.
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Cloud infrastructure market kept growing in Q2, reaching $42B
It’s often said in baseball that a prospect has a high ceiling, reflecting the tremendous potential of a young player with plenty of room to get better. The same could be said for the cloud infrastructure market, which just keeps growing, with little sign of slowing down any time soon. The market hit $42 billion in total revenue with all major vendors reporting, up $2 billion from Q1.
Synergy Research reports that the revenue grew at a speedy 39% clip, the fourth consecutive quarter that it has increased. AWS led the way per usual, but Microsoft continued growing at a rapid pace and Google also kept the momentum going.
AWS continues to defy market logic, actually increasing growth by 5% over the previous quarter at 37%, an amazing feat for a company with the market maturity of AWS. That accounted for $14.81 billion in revenue for Amazon’s cloud division, putting it close to a $60 billion run rate, good for a market leading 33% share. While that share has remained fairly steady for a number of years, the revenue continues to grow as the market pie grows ever larger.
Microsoft grew even faster at 51%, and while Microsoft cloud infrastructure data isn’t always easy to nail down, with 20% of market share according to Synergy Research, that puts it at $8.4 billion as it continues to push upward with revenue up from $7.8 billion last quarter.
Google too continued its slow and steady progress under the leadership of Thomas Kurian, leading the growth numbers with a 54% increase in cloud revenue in Q2 on revenue of $4.2 billion, good for 10% market share, the first time Google Cloud has reached double figures in Synergy’s quarterly tracking data. That’s up from $3.5 billion last quarter.
Image Credits: Synergy Research
After the Big 3, Alibaba held steady over Q1 at 6% (but will only report this week), with IBM falling a point from Q1 to 4% as Big Blue continues to struggle in pure infrastructure as it makes the transition to more of a hybrid cloud management player.
John Dinsdale, chief analyst at Synergy, says that the Big 3 are spending big to help fuel this growth. “Amazon, Microsoft and Google in aggregate are typically investing over $25 billion in capex per quarter, much of which is going towards building and equipping their fleet of over 340 hyperscale data centers,” he said in a statement.
Meanwhile, Canalys had similar numbers, but saw the overall market slightly higher at $47 billion. Their market share broke down to Amazon with 31%, Microsoft with 22% and Google with 8% of that total number.
Canalys analyst Blake Murray says that part of the reason companies are shifting workloads to the cloud is to help achieve environmental sustainability goals as the cloud vendors are working toward using more renewable energy to run their massive data centers.
“The best practices and technology utilized by these companies will filter to the rest of the industry, while customers will increasingly use cloud services to relieve some of their environmental responsibilities and meet sustainability goals,” Murray said in a statement.
Regardless of whether companies are moving to the cloud to get out of the data center business or because they hope to piggyback on the sustainability efforts of the Big 3, companies are continuing a steady march to the cloud. With some estimates of worldwide cloud usage at around 25%, the potential for continued growth remains strong, especially with many markets still untapped outside the U.S.
That bodes well for the Big 3 and for other smaller operators who can find a way to tap into slices of market share that add up to big revenue. “There remains a wealth of opportunity for smaller, more focused cloud providers, but it can be hard to look away from the eye-popping numbers coming out of the Big 3,” Dinsdale said.
In fact, it’s hard to see the ceiling for these companies any time in the foreseeable future.
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Tech leaders can be the secret weapon for supercharging ESG goals
Environmental, social and governance (ESG) factors should be key considerations for CTOs and technology leaders scaling next generation companies from day one. Investors are increasingly prioritizing startups that focus on ESG, with the growth of sustainable investing skyrocketing.
What’s driving this shift in mentality across every industry? It’s simple: Consumers are no longer willing to support companies that don’t prioritize sustainability. According to a survey conducted by IBM, the COVID-19 pandemic has elevated consumers’ focus on sustainability and their willingness to pay out of their own pockets for a sustainable future. In tandem, federal action on climate change is increasing, with the U.S. rejoining the Paris Climate Agreement and a recent executive order on climate commitments.
Over the past few years, we have seen an uptick in organizations setting long-term sustainability goals. However, CEOs and chief sustainability officers typically forecast these goals, and they are often long term and aspirational — leaving the near and midterm implementation of ESG programs to operations and technology teams.
Until recently, choosing cloud regions meant considering factors like cost and latency to end users. But carbon is another factor worth considering.
CTOs are a crucial part of the planning process, and in fact, can be the secret weapon to help their organization supercharge their ESG targets. Below are a few immediate steps that CTOs and technology leaders can take to achieve sustainability and make an ethical impact.
Reducing environmental impact
As more businesses digitize and more consumers use devices and cloud services, the energy needed by data centers continues to rise. In fact, data centers account for an estimated 1% of worldwide electricity usage. However, a forecast from IDC shows that the continued adoption of cloud computing could prevent the emission of more than 1 billion metric tons of carbon dioxide from 2021 through 2024.
Make compute workloads more efficient: First, it’s important to understand the links between computing, power consumption and greenhouse gas emissions from fossil fuels. Making your app and compute workloads more efficient will reduce costs and energy requirements, thus reducing the carbon footprint of those workloads. In the cloud, tools like compute instance auto scaling and sizing recommendations make sure you’re not running too many or overprovisioned cloud VMs based on demand. You can also move to serverless computing, which does much of this scaling work automatically.
Deploy compute workloads in regions with lower carbon intensity: Until recently, choosing cloud regions meant considering factors like cost and latency to end users. But carbon is another factor worth considering. While the compute capabilities of regions are similar, their carbon intensities typically vary. Some regions have access to more carbon-free energy production than others, and consequently the carbon intensity for each region is different.
So, choosing a cloud region with lower carbon intensity is often the simplest and most impactful step you can take. Alistair Scott, co-founder and CTO of cloud infrastructure startup Infracost, underscores this sentiment: “Engineers want to do the right thing and reduce waste, and I think cloud providers can help with that. The key is to provide information in workflow, so the people who are responsible for infraprovisioning can weigh the CO2 impact versus other factors such as cost and data residency before they deploy.”
Another step is to estimate your specific workload’s carbon footprint using open-source software like Cloud Carbon Footprint, a project sponsored by ThoughtWorks. Etsy has open-sourced a similar tool called Cloud Jewels that estimates energy consumption based on cloud usage information. This is helping them track progress toward their target of reducing their energy intensity by 25% by 2025.
Make social impact
Beyond reducing environmental impact, CTOs and technology leaders can have significant, direct and meaningful social impact.
Include societal benefits in the design of your products: As a CTO or technology founder, you can help ensure that societal benefits are prioritized in your product roadmaps. For example, if you’re a fintech CTO, you can add product features to expand access to credit in underserved populations. Startups like LoanWell are on a mission to increase access to capital for those typically left out of the financial system and make the loan origination process more efficient and equitable.
When thinking about product design, a product needs to be as useful and effective as it is sustainable. By thinking about sustainability and societal impact as a core element of product innovation, there is an opportunity to differentiate yourself in socially beneficial ways. For example, Lush has been a pioneer of package-free solutions, and launched Lush Lens — a virtual package app leveraging cameras on mobile phones and AI to overlay product information. The company hit 2 million scans in its efforts to tackle the beauty industry’s excessive use of (plastic) packaging.
Responsible AI practices should be ingrained in the culture to avoid social harms: Machine learning and artificial intelligence have become central to the advanced, personalized digital experiences everyone is accustomed to — from product and content recommendations to spam filtering, trend forecasting and other “smart” behaviors.
It is therefore critical to incorporate responsible AI practices, so benefits from AI and ML can be realized by your entire user base and that inadvertent harm can be avoided. Start by establishing clear principles for working with AI responsibly, and translate those principles into processes and procedures. Think about AI responsibility reviews the same way you think about code reviews, automated testing and UX design. As a technical leader or founder, you get to establish what the process is.
Impact governance
Promoting governance does not stop with the board and CEO; CTOs play an important role, too.
Create a diverse and inclusive technology team: Compared to individual decision-makers, diverse teams make better decisions 87% of the time. Additionally, Gartner research found that in a diverse workforce, performance improves by 12% and intent to stay by 20%.
It is important to reinforce and demonstrate why diversity, equity and inclusion is important within a technology team. One way you can do this is by using data to inform your DEI efforts. You can establish a voluntary internal program to collect demographics, including gender, race and ethnicity, and this data will provide a baseline for identifying diversity gaps and measuring improvements. Consider going further by baking these improvements into your employee performance process, such as objectives and key results (OKRs). Make everyone accountable from the start, not just HR.
These are just a few of the ways CTOs and technology leaders can contribute to ESG progress in their companies. The first step, however, is to recognize the many ways you as a technology leader can make an impact from day one.
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Platform as a service startup Porter aims to become go-to for deploying, managing cloud-based apps
By the time Porter co-founders Trevor Shim, Alexander Belanger and Justin Rhee decided to build a company around DevOps, the pair were well versed in doing remote development on Kubernetes. And like other users, they were consistently getting burnt by the technology.
They realized that for all of the benefits, the technology was there, but users were having to manage the complexity of hosting solutions as well as incurring the costs associated with a big DevOps team, Rhee told TechCrunch.
They decided to build a solution externally and went through Y Combinator’s Summer 2020 batch, where they found other startup companies trying to do the same.
Today, Porter announced $1.5 million in seed funding from Venrock, Translink Capital, Soma Capital and several angel investors. Its goal is to build a platform as a service that any team can use to manage applications in its own cloud, essentially delivering the full flexibility of Kubernetes through a Heroku-like experience.
Why Heroku? It is the hosting platform that developers are used to, and not just small companies, but also later-stage companies. When they want to move to Amazon Web Services, Google Cloud or DigitalOcean, Porter will be that bridge, Shim said.
However, while Heroku is still popular, the pair said companies are thinking the platform is getting outdated because it is standing still technology-wise. Each year, companies move on from the platform due to technical limitations and cost, Rhee said.
A big part of the bet Porter is taking is not charging users for hosting, and its cost is a pure SaaS product, he said. They aren’t looking to be resellers, so companies can use their own cloud, but Porter will provide the automation and users can pay with their AWS and GCP credits, which gives them flexibility.
A common pattern is a move into Kubernetes, but “the zinger we talk about” is if Heroku was built in 2021, it would have been built on Kubernetes, Shim added.
“So we see ourselves as a successor to Heroku,” he said.
To be that bridge, the company will use the new funding to increase its engineering bandwidth with the goal of “becoming the de facto standard for all startups.” Shim said.
Porter’s platform went live in February, and in six months became the sixth-fastest growing open-source platform download on GitHub, said Ethan Batraski, partner at Venrock. He met the company through YC and was “super impressed with Rhee’s and Shim’s vision.
“Heroku has 100,000 developers, but I believe it has stagnated,” Batraski added. “Porter already has 100 startups on its platform. The growth they’ve seen — four or five times — is what you want to see at this stage.”
His firm has long focused on data infrastructure and is seeing the stack get more complex, saying “at the same time, more developers are wanting to build out an app over a week, and scale it to millions of users, but that takes people resources. With Kubernetes it can turn everyone into an expert developer without them knowing.”
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4 key areas SaaS startups must address to scale infrastructure for the enterprise
Startups and SMBs are usually the first to adopt many SaaS products. But as these customers grow in size and complexity — and as you rope in larger organizations — scaling your infrastructure for the enterprise becomes critical for success.
Below are four tips on how to advance your company’s infrastructure to support and grow with your largest customers.
Address your customers’ security and reliability needs
If you’re building SaaS, odds are you’re holding very important customer data. Regardless of what you build, that makes you a threat vector for attacks on your customers. While security is important for all customers, the stakes certainly get higher the larger they grow.
Given the stakes, it’s paramount to build infrastructure, products and processes that address your customers’ growing security and reliability needs. That includes the ethical and moral obligation you have to make sure your systems and practices meet and exceed any claim you make about security and reliability to your customers.
Here are security and reliability requirements large customers typically ask for:
Formal SLAs around uptime: If you’re building SaaS, customers expect it to be available all the time. Large customers using your software for mission-critical applications will expect to see formal SLAs in contracts committing to 99.9% uptime or higher. As you build infrastructure and product layers, you need to be confident in your uptime and be able to measure uptime on a per customer basis so you know if you’re meeting your contractual obligations.
While it’s hard to prioritize asks from your largest customers, you’ll find that their collective feedback will pull your product roadmap in a specific direction.
Real-time status of your platform: Most larger customers will expect to see your platform’s historical uptime and have real-time visibility into events and incidents as they happen. As you mature and specialize, creating this visibility for customers also drives more collaboration between your customer operations and infrastructure teams. This collaboration is valuable to invest in, as it provides insights into how customers are experiencing a particular degradation in your service and allows for you to communicate back what you found so far and what your ETA is.
Backups: As your customers grow, be prepared for expectations around backups — not just in terms of how long it takes to recover the whole application, but also around backup periodicity, location of your backups and data retention (e.g., are you holding on to the data too long?). If you’re building your backup strategy, thinking about future flexibility around backup management will help you stay ahead of these asks.
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