Salesforce grabs Vlocity for $1.33B, a startup with $1B valuation

It’s been a big news day for Salesforce . It announced that Co-CEO Keith Block would be stepping down, and that it had acquired Vlocity for $1.33 billion in an all-cash deal.

It’s no coincidence that Salesforce targeted this startup. It’s a firm that builds six industry-specific CRMs on top of Salesforce — communications, media and entertainment, insurance and financial services, health, energy and utilities and government and nonprofits — and Salesforce Ventures was also an investor. This would appear to have been a deal waiting to happen.

Brent Leary, founder and principal analyst at CRM Essentials says Salesforce saw this as an important target to keep building the business. “Salesforce has been beefing up their abilities to provide industry specific solutions by cultivating strategic ISV partnerships with companies like Vlocity and Veeva (which is focused on life sciences). But this move signals the importance of making these industry capabilities even more a part of the platform offerings,” Leary told TechCrunch.

Ray Wang, founder and principal analyst at Constellation Research also liked the deal for Salesforce. “It’s a great deal. Vlocity gives them the industries platform they need. More importantly, it keeps Google from buying them and [could generate] $10 billion in additional industries revenue growth over next 4 years,” he said.

Vlocity had raised about $163 million on a valuation of around a $1 billion as of its most recent round, a $60 million Series C last March. If $1.33 billion seems a little light, given what Vlocity is providing the company, Wang says it’s because Vlocity needed Salesforce more than the other way around.

“Vlocity on its own doesn’t have as big a future without Salesforce. They have to be together. So Salesforce doesn’t need to buy them. They could keep building out, but it’s better for them to buy them now,” Wang said.

In a blog post on the Vlocity website, founder and CEO David Schmaier put a positive spin on the deal, as you would expect. “Upon the close of the transaction, Vlocity — this wonderful company that we, as a team, have created, built, and grown into a transformational solution for six of the most important industries in the enterprise — will become part of Salesforce,” he wrote.

Per usual, the deal would be predicated on regulatory approval and close some time during Salesforce’s second quarter in fiscal 2021.

Deviceplane wants to bring over-the-air updates to Linux edge devices

Deviceplane, a member of the Y Combinator Winter 2020 class is developing an open source toolset to manage, monitor and update Linux devices running at the edge,

“We solve the hard infrastructure problems that all these companies face including network conductivity, SSH access, orchestrating and deployment of remote updates, hosting, application monitoring and access and security controls. It’s 100% open source, available under an Apache License. You can either host it yourself or you can run on the hosted version,” company founder and CEO Josh Curl told TechCrunch.

He could see this working with a variety of hardware including robotics, consumer appliances, drones, autonomous vehicles and medical devices.

Curl, who has a background in software engineering, was drawn to this problem and found that most companies were going with home-grown solutions. He said once he studied the issue, he found that the set of infrastructure resources required to manage, monitor and update these devices didn’t change that much across industries.

The over-the-air updates are a big part of keeping these devices secure, a major concern with edge devices. “Security is challenging, and one of the core tenets of security is just the ability to update things. So if you as a company are hesitant to update because you’re afraid that things are going to break, or you don’t have a proper infrastructure to do those upgrades, that makes you more hesitant to do upgrades, and it slows down development velocity,” Curl said.

Customers can connect to the Deviceplane API via WiFi, cellular or ethernet. If you’re worried about someone tapping into that, Curl says the software assigns the device a unique identity that is difficult to spoof.

“Devices are assigned an identity in Deviceplane and this identity is what authorizes it to make API calls to Deviceplane. The access key for this identity is stored only on the device, which makes it impossible for someone else to spoof this device without physical access to it.

“Even if someone were able to spoof this identity, they would not be able to deploy malicious code to the spoofed device. Devices never have access to control what software they’re running — this is something that can be done only by the developer pushing out updates to devices,” Curl explained.

The company intends to offer both the hosted version and installed versions of the software as open source, something that he considers key. He hopes to make money supporting companies with more complex installations, but he believes that by offering the software as open source, it will drive developer interest and help build a community around the project.

As for joining YC, Curl said he has friends that had been through the program in the past, and had recommended he join as well. Curl sees being part of the cohort as a way to build his business. “We were excited to be tapping into the YC network — and then being able to tap into that network in the future. I think that YC has funded many companies in the past that can be DevicePlane customers, and that can accelerate going forward.”

Curl wasn’t ready to share download numbers just yet, but it’s still an early stage startup looking  to build the company. It’s using an open source model to drive interest, while helping solve a sticky problem.

ChartHop grabs $5M seed led by a16z to automate the org chart

ChartHop, a startup that aims to modernize and automate the organizational chart, announced a $5 million seed investment today led by Andreessen Horowitz.

A big crowd of other investors also participated including Abstract Ventures, the a16z Cultural Leadership Fund, CoFound, Cowboy Ventures, Flybridge Capital, Shrug Capital, Work Life Ventures and a number of unnamed individual investors, as well.

Founder, CEO and CTO, Ian White says that at previous jobs including as CTO and co-founder at Sailthru, he found himself frustrated by the available tools for organizational planning, something that he says every company needs to get a grip on.

White did what any good entrepreneur would do. He left his previous job and spent the last couple of years building the kind of software he felt was missing in the market. “ChartHop is the first org management platform. It’s really a new type of HR software that brings all the different people data together in one place, so that companies can plan, analyze and visualize their organizations in a completely new way,” White told TechCrunch.

While he acknowledges that among his early customers, the Head of HR is a core user, White doesn’t see this as purely an HR issue. “It’s a problem for any executive, leader or manager in any organization that’s growing and trying to plan what the organization is going to look like more strategically,” he explained.

Lead investor at a16z David Ulevitch, also sees this kind of planning as essential to any organization. “How you structure and grow your organization has a tremendous amount of influence on how your company operates. This sounds so obvious, and yet most organizations don’t act thoughtfully when it comes to organizational planning and design,” Ulevitch wrote in a blog post announcing the investment.

The way it works is that out of the box it connects to 15 or 20 standard types of company systems like BambooHR, Carta, ADP and Workday, and based on this information it can build an organizational chart. The company can then slice and dice the data by department, open recs, gender, salary, geography and so forth. There is also a detailed reporting component that gives companies insight into the current makeup and future state of the organization.

The visual org chart itself is set up so that you can scrub through time to see how your company has changed. He says that while it is designed to hide sensitive information like salaries, he does see it as a way of helping employees across the organization understand where they fit and how they relate to other people they might not even know because the size of the company makes that impossible.

ChartHop org chart organized by gender. Screenshot: ChartHop

White says that he has dozens of customers already, who are paying ChartHop by the employee on a subscription basis. While his target market is companies with more than 100 employees, at some point he may offer a version for early-stage startups who could benefit from this type of planning, and could then have a complete history of the organization over the life of the company.

Today, the company has 9 employees, and he only began hiring in the fall when this seed money came through. He expects to double that number in the next year.

Microsoft Dynamics 365 update is focused on harnessing data

Microsoft announced a major update to its Dynamics 365 product line today, which correlates to the growing amount of data in the enterprise, and how to collect and understand that data to produce better customer experiences.

This is, in fact, the goal of all vendors in this space including Salesforce and Adobe, who are also looking to help improve the customer experience. James Philips, who was promoted to president of Microsoft Business Applications just this week, says that Microsoft has also been keenly focused on harnessing the growing amount of data and helping make use of that inside the applications he is in charge of.

“To be frank every single thing that we’re doing at Microsoft, not just in business applications but across the entire Microsoft Cloud, is on the back of that vision that data is coming out of everything, and that those organizations that can collect that data, harmonize it and reason over it will be in a position to be proactive versus reactive,” Philips told TechCrunch.

New customer engagement tooling

For starters, the company is adding functionality to its customer data platform (CDP), a concept all major vendors (and a growing group of startups) have embraced. It pulls together all of the customer data from various systems into one place, making it easier to understand how the customer interacts with you with the goal of providing better experiences based on this knowledge. Microsoft’s CDP is called Customer Insights.

The company is adding some new connectors to help complete that picture of the customer. “We’re adding new first- and third-party data connections to Customer Insights that allow our customers to understand, for example audience memberships, brand affinities, demographic, psychographic and other characteristics of customers that are stored and then harnessed from Dynamics 365 Customer Insights,” Philips said.

All of this, might make you wonder how they can collect this level of data and maintain GDPR/CCPA kind of compliance. Philips says that the company has been working on this for some time. “We did work at the company level to build a system that allows us and our customers to search for and then delete information about customers in each product group within Microsoft including my organization,” he explained.

The company has also added new sales forecasting tools and Dynamics 365 Sales Engagement Center. The first allows companies to tap into all this data to better predict the customers who sales is engaged with that are most likely to turn into sales. The second gives inside sales teams tools like next best action. These are not revolutionary by any means in the CRM space, but do provide new capabilities for Microsoft customers.

New operations level tooling

The operations side is related to what happens after the sale when the company begins to collect money and report revenue. To that end, the company is introducing a new product called Dynamic 365 Finance Insights, which you can think of as Customer Insights, except for money.

“This product is designed to help our customers predict and accelerate their cash flow. It’s designed specifically to identify opportunities where to focus your energy, where you may have the best opportunity to either close accounts payables or receivables or the opportunity to understand where you may have cash shortfalls,” Philips said.

Finally the company is introducing Dynamics 365 Project Operations,which provides a way for project-based business like construction, consulting and law to track the needs of the business.

“Those organizations, who are trying to operate in a project-based way now have with Dynamics 365 Project Operations, what we believe is the most widely used project management capability in Microsoft Project being joined now with all of the back-end capabilities for selling, accounting and planning that Dynamic 365 offers, all built on the same Common Data Platform, so that you can marry your front-end operations and operational planning with your back-end resource planning, workforce planning and operational processes,” he explained.

All of these tools are designed to take advantage of the growing amount of data coming into organizations, and provide ways to run businesses in a more automated and intelligent fashion that removes some of the manual steps involved in running a company.

To be clear, Microsoft is not alone in offering this kind of intelligent functionality. It is part of a growing movement to bring intelligence to all aspects of enterprise software, regardless of vendor.

Ordway lands $10M Series A to bridge gap between sales and finance

Ordway, a Washington, DC startup, is building a platform to deal with all of the stuff that happens after you make sale. It starts with the order and goes all the way to revenue, however that revenue manifests itself — as a one time payment or a recurring subscription. Today the company announced a $10 million Series A.

CRV led the round with participation from Clocktower Ventures and existing investors Lerer Hippeau and Revolution Rise of the Rest fund. The company has now raised a total of $12.5 million, according to Crunchbase data.

Sameer Gulati, founder and CEO at Ordway, says the company wanted to build a flexible tool to sit between the CRM and financial systems of a company. “So in that sense, we do everything for post-sales from billing automation, payment collection, revenue recognition, analytics, all the way to cash. We have a streamlined workflow for managing order to revenue,” Gulati told TechCrunch.

It sounds a lot like the Quote-to-Cash space where companies like Apttus (acquired by Thoma Bravo in 2018) or SteelBrick (acquired by Salesforce in 2015) tried to stake a claim, but Gulati says while his company’s solution handles the quote-to-cash workflow, it can do much more than that.

“We absolutely can handle the workflow from quote to billing to payments to revenue, for sure. But the reason Ordway has a niche is because we are a lot more configurable and a lot more flexible to accommodate any workflow out there,” he said.

He says his company’s solution connects to the CRM system on one side and the financial systems on the other. They are compatible with all the major CRM tools including Salesforce and Dynamics 365. And they support a range of financial tools like NetSuite or QuickBooks.

“In fact, we can work with any back-end small system to a large scale ERP system, but our value add is automating the movement of data into the ERP. So we are the operational framework between sales and traditional ERP. We will handle everything in between,” he said.

As for the funding, Gulati has the kind of plans you would expect with a Series A investment. “The core goal is definitely to accelerate all aspects of our business from sales and marketing to product and engineering, and most importantly, customer success. Basically, in a sense we are doubling down on making sure our customers are successful in solving their core sales to finance business challenges,” he said.

The company launched in 2018 and has 25 employees today. Gulati says his company’s goal is to grow 4X in the next 12 months and grow employees at a similar rate.

Ordway lands $10M Series A to bridge gap between sales and finance

Ordway, a Washington, DC startup, is building a platform to deal with all of the stuff that happens after you make sale. It starts with the order and goes all the way to revenue, however that revenue manifests itself — as a one time payment or a recurring subscription. Today the company announced a $10 million Series A.

CRV led the round with participation from Clocktower Ventures and existing investors Lerer Hippeau and Revolution Rise of the Rest fund. The company has now raised a total of $12.5 million, according to Crunchbase data.

Sameer Gulati, founder and CEO at Ordway, says the company wanted to build a flexible tool to sit between the CRM and financial systems of a company. “So in that sense, we do everything for post-sales from billing automation, payment collection, revenue recognition, analytics, all the way to cash. We have a streamlined workflow for managing order to revenue,” Gulati told TechCrunch.

It sounds a lot like the Quote-to-Cash space where companies like Apttus (acquired by Thoma Bravo in 2018) or SteelBrick (acquired by Salesforce in 2015) tried to stake a claim, but Gulati says while his company’s solution handles the quote-to-cash workflow, it can do much more than that.

“We absolutely can handle the workflow from quote to billing to payments to revenue, for sure. But the reason Ordway has a niche is because we are a lot more configurable and a lot more flexible to accommodate any workflow out there,” he said.

He says his company’s solution connects to the CRM system on one side and the financial systems on the other. They are compatible with all the major CRM tools including Salesforce and Dynamics 365. And they support a range of financial tools like NetSuite or QuickBooks.

“In fact, we can work with any back-end small system to a large scale ERP system, but our value add is automating the movement of data into the ERP. So we are the operational framework between sales and traditional ERP. We will handle everything in between,” he said.

As for the funding, Gulati has the kind of plans you would expect with a Series A investment. “The core goal is definitely to accelerate all aspects of our business from sales and marketing to product and engineering, and most importantly, customer success. Basically, in a sense we are doubling down on making sure our customers are successful in solving their core sales to finance business challenges,” he said.

The company launched in 2018 and has 25 employees today. Gulati says his company’s goal is to grow 4X in the next 12 months and grow employees at a similar rate.

Cloud spending said to top $30B in Q4 as Amazon, Microsoft battle for market share

We all know the cloud infrastructure market is extremely lucrative; analyst firm Canalys reports that the sector reached $30.2 billion in revenue for Q4 2019.

Cloud numbers are hard to parse because companies often lump cloud revenue into a single bucket regardless of whether it’s generated by infrastructure or software. What’s interesting about Canalys’s numbers is that it attempts to measure the pure infrastructure results themselves without other cloud incomes mixed in:

As an example, Microsoft reported $12.5 billion in total combined cloud revenue for the quarter, but Canalys estimates that just $5.3 billion comes from infrastructure (Azure). Amazon has the purest number with $9.8 billion of a reported $9.95 billion attributed to its infrastructure business. This helps you understand why in spite of the fact that Microsoft reported bigger overall cloud earnings numbers and a higher growth rate, Amazon still has just less than double Microsoft’s market share in terms of IaaS spend.

That’s not to say Microsoft didn’t still have a good quarter — it garnered 17.6% of revenue for the period. That’s up from 14.5% in the same quarter a year ago. What’s more, Amazon lost a bit of ground, according to Canalys, dropping from 33.4% in Q4 2018 to 32.4% in the most recent quarter.

Part of the reason for that is because Microsoft is growing at close to twice the rate as Amazon — 62.3% versus Amazon’s 33.2%.

Meanwhile, number-three vendor Google came in at $1.8 billion for pure infrastructure revenue, good for 6% of the market, up from 4.9% a year ago on growth rate 67.6%. Google reported $2.61 billion in overall cloud revenue, but that included software. Despite the smaller results, it was a good quarter for the Mountain View-based company.

Dell sells RSA to consortium led by Symphony Technology Group for over $2B

Dell Technologies announced today that it was selling legacy security firm RSA for $2.075 billion to a consortium of investors led by Symphony Technology Group. Other investors include Ontario Teachers’ Pension Plan Board and AlpInvest Partners.

RSA came to Dell when it bought EMC for $67 billion in 2015. EMC bought the company in 2006 for a similar price it was sold for today, $2.1 billion. The deal includes several pieces, including the RSA security conference held each year in San Francisco.

As for products, the consortium gets RSA Archer, RSA NetWitness Platform, RSA SecurID, RSA Fraud and Risk Intelligence — in addition to the conference. At the time of the EMC acquisition, in a letter to customers, Michael Dell actually called out RSA as one of the companies he looked forward to welcoming to the Dell family after the deal was completed:

I am excited to work with the EMC, VMware, Pivotal, VCE, Virtustream and RSA teams, and I am personally committed to the success of our new company, our partners and above all, to you, our customers.

Times change however, and perhaps Dell decided it was simply time to get some cash and jettison the veteran security company to go a bit more modern, as RSA’s approach no longer aligned with Dell’s company-wide security strategy.

“The strategies of RSA and Dell Technologies have evolved to address different business needs with different go-to-market models. The sale of RSA gives us greater flexibility to focus on integrated innovation across Dell Technologies, while allowing RSA to focus on its strategy of providing risk, security and fraud teams with the ability to holistically manage digital risk,” Dell Technology’s chief operating officer and vice chairman Jeff Clarke, wrote in a blog post announcing the deal.

Meanwhile, RSA president Rohit Ghai tried to put a happy spin on the outcome, framing it as the next step in the company’s long and storied history. “The one constant in every episode of our existence has been our focus on the success of our customers and our ability to endure through market disruption by innovating on behalf of our customers,” he wrote in a blog post on the RSA company website.

The deal is subject to the normal kinds of regulatory approval before it is finalized.

Egnyte unifies its security and productivity tooling into single platform

Egnyte announced today it was combining its two main products — Egnyte Protect and Egnyte Connect — into a single platform to help customers manage, govern and secure the data from a single set of tools.

Egynte co-founder and CEO Vineet Jain says that this new single platform approach is being driven chiefly by the sheer volume of data they are seeing from customers, especially as they shift from on-prem to the cloud.

“The underlying pervasive theme is that there’s a rapid acceleration of data going to the cloud and we’ve seen that in our customers,” Jain told TechCrunch. He says that long-time customers have been shifting from terabytes to petabytes of data, while new customers are starting out with a few hundred terabytes instead of five or ten.

As this has happened, he says customers are asking for a way to deal with this data glut with a single platform because the volume of data makes it too much to handle with separate tools. “Instead of looking at this as separate problems, customers are saying they want a solution that helps address the productivity part at the same time as the security part. That’s because there is more data in the cloud, and concerns around data security and privacy, along with increasing compliance requirements, are driving the need to have it in one unified platform,” he explained.

The company is doing this because managing the data needs to be tied to security and governance policies. “They are not ultimately separate ideas,” Jain says.

Jain says up until recently, the company saw the data management piece as the way into a customer, and after they had that locked down, they would move to layer on security and compliance as a value-add. Today, partly due to the data glut and partly due to compliance regulations, Jain says, these are no longer separate ideas, and his company has evolved its approach to meet the changing requirements of customers.

Egnyte was founded in 2007 and has raised over $138 million on a $460 million post valuation, according to Pitchbook data. Its most recent round was $75 million led by Goldman Sachs in September, 2018. Egnyte passed the $100 million ARR mark in November.

Alibaba Cloud revenue reaches $1.5B for the quarter on 62% growth rate

Alibaba issued its latest earnings report yesterday, and the Chinese eCommerce giant reported that cloud revenue grew 62 percent to $1.5 billion U.S., crossing the RMB10 billion revenue threshold for the first time.

Alibaba also announced that it had completed its migration to its own public cloud in the most recent quarter, a significant milestone because the company can point to its own operations as a reference to potential customers, a point that Daniel Zhang, Alibaba executive chairman and CEO, made in the company’s post-earnings call with analysts.

“We believe the migration of Alibaba’s core e-commerce system to the public cloud is a watershed event. Not only will we ourselves enjoy greater operating efficiency, but we believe, it will also encourage others to adopt our public cloud infrastructure,” Zhang said in the call.

It’s worth noting that the company also warned that the Coronavirus gripping China could have impact on the company’s retail business this year, but it didn’t mention the cloud portion specifically.

Yesterday’s revenue report puts Alibaba on a $6 billion U.S. run rate, good for fourth place in the cloud infrastructure market share race, but well behind the market leaders. In the most recent earnings reports, Google reported $2.5 billion in revenue, Microsoft reported $12.5 billion in combined software and infrastructure revenue and market leader AWS reported a tad under $10 billion for the quarter.

As with Google, Alibaba sits well in the back of the pack, as Synergy Research’s latest market share data shows. The chart was generated before yesterday’s report, but it remains an accurate illustration of the relative positions of the various companies.

Alibaba has a lot in common with Amazon. Both are eCommerce giants. Both have cloud computing arms. Alibaba, however, came much later to the cloud computing side of the house, launching in 2009, but really only beginning to take it seriously in 2015.

At the time, cloud division president Simon Hu boasted to Reuters that his company would overtake Amazon in the cloud market within 4 years. “Our goal is to overtake Amazon in four years, whether that’s in customers, technology, or worldwide scale,” he said at the time.

They aren’t close to achieving that goal, of course, but they are growing steadily in a hot cloud infrastructure market. Alibaba is the leading cloud vendor in China, although AWS leads in Asia overall, according to the most recent Synergy Research data on the region.