Xage brings role-based single sign-on to industrial devices

Traditional industries like oil and gas and manufacturing often use equipment that was created in a time when remote access wasn’t a gleam in an engineer’s eye, and hackers had no way of connecting to them. Today, these devices require remote access and some don’t have even rudimentary authentication. Xage, the startup that wants to make industrial infrastructure more secure, announced a new solution today to bring single sign-on and role-based control to even the oldest industrial devices.

Company CEO Duncan Greatwood says that some companies have adopted firewall technology, but if a hacker breaches the firewall, there often isn’t even a password to defend these kinds of devices. He adds that hackers have been increasingly targeting industrial infrastructure.

Xage has come up with a way to help these companies with its latest product called Xage Enforcement Point (XEP). This tool gives IT a way to control these devices with a single password, a kind of industrial password manager. Greatwood says that some companies have hundreds of passwords for various industrial tools. Sometimes, whether because of distance across a factory floor, or remoteness of location, workers would rather adjust these machines remotely when possible.

While operations wants to simplify this for workers with remote access, IT worries about security and the tension can hold companies back, force them to make big firewall investments or in some cases implement these kinds of solutions without adequate protection.

XEP helps bring a level of protection to these pieces of equipment. “XEP is a relatively small piece of software that can run on a tiny credit-card size computer, and you simply insert it in front of the piece of equipment you want to protect,” Greatwood explained.

The rest of the Xage platform adds additional security. The company introduced fingerprinting last year, which gives unique identifiers to these pieces of equipment. If a hacker tries to spoof a piece of equipment, and the device lacks a known fingerprint, they can’t get on the system.

Xage also makes use of the blockchain and a rules engine to secure industrial systems. The customer can define rules and use the blockchain as an enforcement mechanism where each node in the chain carries the rules, and a certain number of nodes as defined by the customer, must agree that the person, machine or application trying to gain access is a legitimate actor.

The platform taken as a whole provides several levels of protection in an effort to discourage hackers who are trying to breach these systems. Greatwood says that while companies don’t usually get rid of tools they already have like firewalls, they may scale back their investment after buying the Xage solution.

Xage was founded at the end of 2017. It has raised $16 million to this point and has 30 employees. Greatwood didn’t want to discuss a specific number of customers, but did say they were making headway in oil and gas, renewable energy, utilities and manufacturing.

As GE and Amazon move on, Google expands presence in Boston and NYC

NYC and Boston were handed huge setbacks this week when Amazon and GE decided to bail on their commitments to build headquarters in the respective cities on the same day. But it’s worth pointing out that while these large tech organizations were pulling out, Google was expanding in both locations.

Yesterday upon hearing about Amazon’s decision to scrap its HQ2 plans in Long Island City, New York City Mayor De Blasio had this to say: “Instead of working with the community, Amazon threw away that opportunity. We have the best talent in the world and every day we are growing a stronger and fairer economy for everyone. If Amazon can’t recognize what that’s worth, its competitors will.” One of them already has. Google had already announced a billion dollar expansion in Hudson Square at the end of last year.

In fact, the company is pouring billions into NYC real estate with plans to double its 7000 person workforce over the next 10 years. As TechCrunch’s Jon Russell reported, “Our investment in New York is a huge part of our commitment to grow and invest in U.S. facilities, offices and jobs. In fact, we’re growing faster outside the Bay Area than within it, and this year opened new offices and data centers in locations like Detroit, Boulder, Los Angeles, Tennessee and Alabama,” wrote Google CFO Ruth Porat.”

Just this week, as GE was making its announcement, Google was announcing a major expansion in Cambridge, the city across the river from Boston that is home to Harvard and MIT. Kendall Square is also is home to offices from Facebook, Microsoft, IBM, Akamai, Digital Ocean and a plethora of startups.

Google will be moving into a brand new building that currently is home to the MIT Coop bookstore. It plans to grab 365,000 square feet of the new building when it’s completed, and as in NYC will be adding hundreds of new jobs to the 1500 already in place. Brian Cusack, Google Cambridge Site lead points out the company began operations in Cambridge back in 2003 and has been working on Search, Android, Cloud, YouTube, Google Play, Research, Ads and more.

“This new space will provide room for future growth and further cements our commitment to the Cambridge community. We’re proud to call this city home and will continue to support its vibrant nonprofit and growing business community,” he said in a statement.

As we learned this week, big company commitments can vanish just as quickly as they are announced, but for now at least, it appears that Google is serious about its commitment to New York and Boston and will be expanding office space and employment to the tune of thousands of jobs over the next decade.

Zendesk just hired three former Microsoft, Salesforce and Adobe execs

Today, Zendesk announced it had hired three new executives — Elisabeth Zornes, former general manager of global support for Microsoft Office, as Zendesk’s first chief customer officer; former Adobe executive Colleen Berube as chief information officer and former Salesforce executive Shawna Wolverton as senior vice president, product.

The company emphasized that the hirings were about expanding the executive suite and bringing in top people to help the company grow and move into larger enterprise organizations.

From left to right: Shawna Wolverton, Colleen Berube and Elizabeth Zornes

Zornes comes to Zendesk with 20 years of experience at Microsoft working in a variety of roles around Microsoft Office. She says that what attracted her to Zendesk was its focus on the customer.

“When I look at businesses today, no matter what size, what type or what geography, they can agree on one thing: customer experience is the rocket fuel to drive success. Zendesk has positioned itself as a technology company that empowers companies of all kinds to drive a new level of success by focusing on their customer experience, and helping them to be at the forefront of that was a very intriguing opportunity for me,” Zornes told TechCrunch.

New CIO Berube, who comes with two decades of experience, also sees her new job as a chance to have an impact on customer experience and help companies who are trying to transform into digital organizations. “Customer experience is the linchpin for all organizations to succeed in the digital age. My background is broad, having shepherded many different types of companies through digital transformations, and developing and running modern IT organizations,” she said.

Her boss, CEO and co-founder Mikkel Svane sees someone who can help continue to grow the company and develop the product. “We looked specifically for a CIO with a modern mindset who understands the challenges of large organizations trying to keep up with customer expectations today,” Svane told TechCrunch

As for senior VP of product Wolverton, she comes with 15 years of experience including a stint as head of product at Salesforce. She said that coming to Zendesk was about having an impact on a modern SaaS product. “The opportunity to build a modern, public, cloud-native CRM platform with Sunshine was a large part of my decision to join,” she said.

The three leaders have already joined the organization — Wolverton and Berube joined last month and Zornes started just this week.

Google and IBM still trying desperately to move cloud market share needle

When it comes to the cloud market, there are few known knowns. For instance, we know that AWS is the market leader with around 32 percent of market share. We know Microsoft is far back in second place with around 14 percent, the only other company in double digits. We also know that IBM and Google are wallowing in third or fourth place, depending on whose numbers you look at, stuck in single digits. The market keeps expanding, but these two major companies never seem to get a much bigger piece of the pie.

Neither company is satisfied with that, of course. Google so much so that it moved on from Diane Greene at the end of last year, bringing in Oracle veteran Thomas Kurian to lead the division out of the doldrums. Meanwhile, IBM made an even bigger splash, plucking Red Hat from the market for $34 billion in October.

This week, the two companies made some more noise, letting the cloud market know that they are not ceding the market to anyone. For IBM, which is holding its big IBM Think conference this week in San Francisco, it involved opening up Watson to competitor clouds. For a company like IBM, this was a huge move, akin to when Microsoft started building apps for iOS. It was an acknowledgement that working across platforms matters, and that if you want to gain market share, you had better start thinking outside the box.

While becoming cross-platform compatible isn’t exactly a radical notion in general, it most certainly is for a company like IBM, which if it had its druthers and a bit more market share, would probably have been content to maintain the status quo. But if the majority of your customers are pursuing a multi-cloud strategy, it might be a good idea for you to jump on the bandwagon — and that’s precisely what IBM has done by opening up access to Watson across clouds in this fashion.

Clearly buying Red Hat was about a hybrid cloud play, and if IBM is serious about that approach, and for $34 billion, it had better be — it would have to walk the walk, not just talk the talk. As IBM Watson CTO and chief architect Ruchir Puri told my colleague Frederic Lardinois about the move, “It’s in these hybrid environments, they’ve got multiple cloud implementations, they have data in their private cloud as well. They have been struggling because the providers of AI have been trying to lock them into a particular implementation that is not suitable to this hybrid cloud environment.” This plays right into the Red Hat strategy, and I’m betting you’ll see more of this approach in other parts of the product line from IBM this year. (Google also acknowledged this when it announced a hybrid strategy of its own last year.)

Meanwhile, Thomas Kurian had his coming-out party at the Goldman Sachs Technology and Internet Conference in San Francisco earlier today. Bloomberg reports that he announced a plan to increase the number of salespeople and train them to understand specific verticals, ripping a page straight from the playbook of his former employer, Oracle.

He suggested that his company would be more aggressive in pursuing traditional enterprise customers, although I’m sure his predecessor, Diane Greene, wasn’t exactly sitting around counting on inbound marketing interest to grow sales. In fact, rumor had it that she wanted to pursue government contracts much more aggressively than the company was willing to do. Now it’s up to Kurian to grow sales. Of course, given that Google doesn’t report cloud revenue it’s hard to know what growth would look like, but perhaps if it has more success it will be more forthcoming.

As Bloomberg’s Shira Ovide tweeted today, it’s one thing to turn to the tried and true enterprise playbook, but that doesn’t mean that executing on that approach is going to be simple, or that Google will be successful in the end.

These two companies obviously desperately want to alter their cloud fortunes, which have been fairly dismal to this point. The moves announced today are clearly part of a broader strategy to move the market share needle, but whether they can or the market positions have long ago hardened remains to be seen.

PerimeterX secures $43M to protect web apps from bot attacks

We know by now that modern website attacks are typically automated, as armies of bots knock on doors until they inevitably find vulnerabilities and take advantage. PerimeterX, a San Francisco startup wants to protect sites from these automated assaults. Today, it announced a $43 million Series C.

The round was led by Scale Venture Partners . New investor Adams Street Partners joined existing investors Canaan Partners, Vertex Ventures and Data Collective in the round. Ariel Tseitlin, a partner at Scale will be joining the company’s board under the terms of the deal. Today’s investment brings the total raised to over $77 million, according to Crunchbase data.

Omri Iluz, co-founder and CEO at PerimeterX says bots have become the preferred way of hackers to attack websites and mobile apps, and his company has developed a way to defend against that kind of approach. It uses an approach called behavioral fingerprinting to blunt these automated attacks.

“Once we gain visibility into the behavior of the user, we are able to discern between normal behavior and an anomalous behavior that looks like it’s coming from an automated tool,” he said. The solution looks at attributes like mouse movements and swipes. It also analyze the hardware to understand the graphics driver and audio driver of whatever device the bot is purporting to be.

To achieve this kind of identification requires massive amounts of data and PerimeterX uses machine learning to help understand normal behavior and shut down anomalous behavior in an automated fashion.

The company was founded in 2014 and currently has 140 employees. Ariel Tseitlin from Scale Venture Partners, whose firm is leading the round, says as companies reach this level of maturity, the Series C money tends to go into sales and marketing to push the revenue pedal and scale the company.

“While there is a lot of opportunity in R&D, generally at this stage most of the dollars are going for sales and marketing, so hiring more salespeople, hiring more marketers more sales ops.
That’s where a big part of the expansion comes from, and that tends to be pretty closely correlated to revenue growth, and pretty closely correlated to just greater growth in general,” he explained

We wrote about Signal Sciences’ funding last week, a company that also works to protect web apps using a firewall approach. Iluz says that the two companies often work together in the same customers, rather than competing because they attack the problem differently.

Carbonite to acquire endpoint security company Webroot for $618.5M

Carbonite, the online backup and recovery company based in Boston, announced late yesterday that it will be acquiring Webroot, an endpoint security vendor, for $618.5 million in cash.

The company believes that by combining its cloud backup service with Webroot’s endpoint security tools, it will give customers a more complete solution. Webroot’s history actually predates the cloud, having launched in 1997. The private company reported $250 million in revenue for fiscal 2018, according to data provided by Carbonite . That will combine with Carbonite’s $296.4 million in revenue for the same time period.

Carbonite CEO and president Mohamad Ali saw the deal as a way to expand the Carbonite offering. “With threats like ransomware evolving daily, our customers and partners are increasingly seeking a more comprehensive solution that is both powerful and easy to use. Backup and recovery, combined with endpoint security and threat intelligence, is a differentiated solution that provides one, comprehensive data protection platform,” Ali explained in a statement.

The deal not only enhances Carbonite’s backup offering, it gives the company access to a new set of customers. While Carbonite sells mainly through Value Added Resellers (VARs), Webroot’s customers are mainly 14,000 Managed Service Providers (MSPs). That lack of overlap could increase its market reach through to the MSP channel. Webroot has 300,000 customers, according to Carbonite.

This is not the first Carbonite acquisition. It has acquired several other companies over the last several years, including buying Mozy from Dell a year ago for $145 million. The acquisition strategy is about using its checkbook to expand the capabilities of the platform to offer a more comprehensive set of tools beyond core backup and recovery.

Graphic: Carbonite

The company announced it is using cash on hand and a $550 million loan from Barclays, Citizens Bank and RBC Capital Markets to finance the deal. Per usual, the acquisition will be subject to regulatory approval, but is expected to close this quarter.

Someone could scoop up Slack before it IPOs

Earlier this week, Slack announced that it has filed the paperwork to go public at some point later this year. The big question is, will the company exit into the public markets as expected, or will one of the technology giants swoop in at the last minute with buckets of cash and take them off the market?

Slack, which raised over $1 billion on an other worldly $7 billion valuation, is an interesting property. It has managed to grow and be successful while competing with some of the world’s largest tech companies — Microsoft, Cisco, Facebook, Google and Salesforce. Not coincidentally these deep-pocketed companies could be the ones that come knock, knock, knocking at Slack’s door.

Slack has managed to hold its own against these giants by doing something in this space that hadn’t been done effectively before. It made it easy to plug in other services, effectively making Slack a work hub where you could spend your day because your work could get pushed to you there from other enterprise apps.

As I’ve discussed before, this centralized hub has been a dream of communications tools for most of the 21st century. It began with enterprise IM tools in the early 2000s, progressed to Enterprise 2.0 tools in the 2007 timeframe. That period culminated in 2012 when Microsoft bought Yammer for $1.2 billion, the only billion dollar exit for that generation of tools.

I remember hearing complaints about Enterprise 2.0 tools. While they had utility, in many ways they were just one more thing employees had to check for information beyond email. The talk was these tools would replace email, but a decade later email’s still standing and that generation of tools has been absorbed.

In 2013, Slack came along, perhaps sensing that Enterprise 2.0 never really got mobile and the cloud and it recreated the notion in a more modern guise. By taking all of that a step further and making the tool a kind of workplace hub, it has been tremendously successful growing to 8 million daily users in roughly 4 years, around 3 million of which were the paying variety, at last count.

Slack’s growth numbers as of May 2018

All of this leads us back to the exit question. While the company has obviously filed for IPO paperwork, it might not be the way it ultimately exits. Just the other day CNBC’s Jay Yarrow posited this questions on Twitter:

Not sure where he pulled that number from, but if you figure 3x valuation, that could be the value for a company of this ilk. There would be symmetry in Microsoft buying Slack six years after it plucked Yammer off the market, and it would remove a major competitive piece from the board, while allowing Microsoft access to Slack’s growing customer base.

Nobody can see into the future, and maybe Slack does IPO and takes its turn as a public company, but it surely wouldn’t be a surprise if someone came along with an offer it couldn’t refuse, whatever that figure might be.

Gong.io nabs $40M investment to enhance CRM with voice recognition

With traditional CRM tools, sales people add basic details about the companies to the database, then a few notes about their interactions. AI has helped automate some of that, but Gong.io wants to take it even further using voice recognition to capture every word of every interaction. Today, it got a $40M Series B investment.

The round was led by Battery Ventures with existing investors Norwest Venture Partners, Shlomo Kramer, Wing Venture Capital, NextWorld Capital and Cisco Investments also participating. Battery general partner Dharmesh Thakker will join the startup’s Board under the terms of the deal. Today’s investment brings the total raised so far to $68 million, according to the company.

$40 million is a hefty Series B, but investors see a tool that has the potential to have a material impact on sales, or at least give management a deeper understanding of why a deal succeeded or failed using artificial intelligence, specifically natural language processing.

Company co-founder and CEO Amit Bendov says the solution starts by monitoring all customer-facing conversation and giving feedback in a fully automated fashion. “Our solution uses AI to extract important bits out of the conversation to provide insights to customer-facing people about how they can get better at what they do, while providing insights to management about how staff is performing,” he explained. It takes it one step further by offering strategic input like how your competitors are trending or how are customers responding to your products.

Screenshot: Gong.io

Bendov says he started the company because he has had this experience at previous startups where he wants to know more about why he lost a sale, but there was no insight from looking at the data in the CRM database. “CRM could tell you what customers you have, how many sales you’re making, who is achieving quota or not, but never give me the information to rationalize and improve operations,” he said.

The company currently has 350 customers, a number that has more than tripled since the end of 2017 when it had 100. He says it’s not only that it’s adding new customers, existing ones are expanding, and he says that there is almost zero churn.

Today, Gong has 120 employees with headquarters in San Francisco and a 55-person R&D team in Israel. Bendov expects the number of employees to double over the next year with the new influx of money to keep up with the customer growth.

Big companies are not becoming data-driven fast enough

I remember watching MIT professor Andrew McAfee years ago telling stories about the importance of data over gut feeling, whether it was predicting successful wines or making sound business decisions. We have been hearing about big data and data-driven decision making for so long, you would think it has become hardened into our largest organizations by now. As it turns out, new research by NewVantage Partners finds that most large companies are having problems implementing an organization-wide, data-driven strategy.

McAfee was fond of saying that before the data deluge we have today, the way most large organizations made decisions was via the HiPPO — the highest paid person’s opinion. Then he would chide the audience that this was not the proper way to run your business. Data, not gut feelings, even those based on experience, should drive important organizational decisions.

While companies haven’t failed to recognize McAfee’s advice, the NVP report suggests they are having problems implementing data-driven decision making across organizations. There are plenty of technological solutions out there today to help them from startups all the way to the largest enterprise vendors, but the data (see, you always need to go back to the data) suggests that it’s not a technology problem, it’s people problem.

Executives can have farsighted vision that their organizations need to be data-driven. They can acquire all of the latest solutions to bring data to the forefront, but unless they combine that with a broad cultural shift and a deep understanding of how to use that data inside business processes, they will continue to struggle.

The study’s authors, Randy Bean and Thomas H. Davenport, wrote about the people problem in their study’s executive summary. “We hear little about initiatives devoted to changing human attitudes and behaviors around data. Unless the focus shifts to these types of activities, we are likely to see the same problem areas in the future that we’ve observed year after year in this survey.”

The survey found that 72 percent of respondents have failed in this regard, reporting they haven’t been able to create a data-driven culture, whatever that means to individual respondents. Meanwhile, 69 percent reported they had failed to create a data-driven organization, although it would seem that these two metrics would be closely aligned.

Perhaps most discouraging of all is that the data is trending the wrong way. Over the last several years, the report’s authors say that those organizations calling themselves data-driven has actually dropped each year from 37.1% in 2017 to 32.4% in 2018 to 31.0% in the latest survey.

This matters on so many levels, but consider that as companies shift to artificial intelligence and machine learning, these technologies rely on abundant amounts of data to work effectively. What’s more, every organization regardless of its size, is generating vast amounts of data, simply as part of being a digital business in the 21st century. They need to find a way to control this data to make better decisions and understand their customers better. It’s essential.

There is so much talk about innovation and disruption, and understanding and affecting company culture, but so much of all this is linked. You need to be more agile. You need to be more digital. You need to be transformational. You need to be all of these things — and data is at the center of all of it.

Data has been called the new oil often enough to be cliche, but these results reveal that the lesson is failing to get through. Companies need to be data-driven now, this instant. This isn’t something to be working towards at this point. This is something you need to be doing, unless your ultimate goal is to become irrelevant.

Google’s still not sharing cloud revenue

Google has shared its cloud revenue exactly once over the last several years. Silence tends to lead to speculation to fill the information vacuum. Luckily there are some analyst firms who try to fill the void, and it looks like Google’s cloud business is actually trending in the right direction, even if they aren’t willing to tell us an exact number.

When Google last reported its cloud revenue, last year about this time, they indicated they had earned $1 billion in revenue for the quarter, which included Google Cloud Platform and G Suite combined. Diane Greene, who was head of Google Cloud at the time, called it an “elite business.” but in reality it was pretty small potatoes compared to Microsoft’s and Amazon’s cloud numbers, which were pulling in $4-$5 billion a quarter between them at the time. Google was looking at a $4 billion run rate for the entire year.

Google apparently didn’t like the reaction it got from that disclosure so it stopped talking about cloud revenue. Yesterday when Google’s parent company, Alphabet, issued its quarterly earnings report, to nobody’s surprise, it failed to report cloud revenue yet again, at least not directly.

Google CEO Sundar Pichai gave some hints, but never revealed an exact number. Instead he talked in vague terms calling Google Cloud “a fast-growing multibillion-dollar business.” The only time he came close to talking about actual revenue was when he said, “Last year, we more than doubled both the number of Google Cloud Platform deals over $1 million as well as the number of multiyear contracts signed. We also ended the year with another milestone, passing 5 million paying customers for our cloud collaboration and productivity solution, G Suite.”

OK, it’s not an actual dollar figure, but it’s a sense that the company is actually moving the needle in the cloud business. A bit later in the call, CFO Ruth Porat threw in this cloud revenue nugget. “We are also seeing a really nice uptick in the number of deals that are greater than $100 million and really pleased with the success and penetration there. At this point, not updating further.” She is not updating further. Got it.

That brings us to a company that guessed for us, Canalys. While the firm didn’t share its methodology, it did come up with a figure of $2.2 billion for the quarter. Given that the company is closing larger deals and was at a billion last year, this figure feels like it’s probably in the right ballpark, but of course it’s not from the horse’s mouth, so we can’t know for certain.

Frankly, I’m a little baffled why Alphabet’s shareholders actually let the company get away with this complete lack of transparency. It seems like people would want to know exactly what they are making on that crucial part of the business, wouldn’t you? As a cloud market watcher, I know I would. So we’re left to companies like Canalys to fill in the blanks, but it’s certainly not as satisfying as Google actually telling us. Maybe next quarter.