Pendo, the late stage startup that helps companies understand how customers are interacting with their apps, announced a $100 million Series E investment today on a valuation of $1 billion.
The round was led by Sapphire Ventures . Also participating were new investors General Atlantic and Tiger Global, and existing investors Battery Ventures, Meritech Capital, FirstMark, Geodesic Capital and Cross Creek. Pendo has now raised $206 million, according to the company.
Company CEO and co-founder Todd Olson says that one of the reasons they need so much money is they are defining a market, and the potential is quite large. “Honestly, we need to help realize the total market opportunity. I think what’s exciting about what we’ve seen in six years is that this problem of improving digital experiences is something that’s becoming top of mind for all businesses,” Olson said.
The company integrates with customer apps, capturing user behavior and feeding data back to product teams to help prioritize features and improve the user experience. In addition, the product provides ways to help those users either by walking them through different features, pointing out updates and new features or providing other notes. Developers can also ask for feedback to get direct input from users.
Olson says early on its customers were mostly other technology companies, but over time they have expanded into lots of other verticals including insurance, financial services and retail and these companies are seeing digital experience as increasingly important. “A lot of this money is going to help grow our go-to-market teams and our product teams to make sure we’re getting our message out there, and we’re helping companies deal with this transformation,” he says. Today, the company has over 1200 customers.
While he wouldn’t commit to going public, he did say it’s something the executive team certainly thinks about, and it and has started to put the structure in place to prepare should that time ever come. “This is certainly an option that we are considering, and we’re looking at ways in which to put us in a position to be able to do so, if and when the markets are good and we decide that’s the course we want to take.”
Zoho may be one of the most underrated tech companies. The 23-year-old company, which at this point offers more than 45 products, has never taken outside funding and has no ambition to go public, yet it’s highly profitable and runs its own data centers around the world. And today, it’s launching Catalyst, a cloud-based developer platform with a focus on microservices that it hopes can challenge those of many of its larger competitors.
The company already offered a low-code tool for building business apps. But Catalyst is different. Zoho isn’t following in the footsteps of Google or Amazon here and offering a relatively unopinionated platform for running virtual machines and containers. Indeed, it does nothing of the sort. The company is 100% betting on serverless as the next major technology for building enterprise apps and the whole platform has been tuned for this purpose.
“Historically, when you look at cloud computing, when you look at any public clouds, they pretty much range from virtualizing your servers and renting our virtual servers all the way up the stack,” Raju Vegesna, Zoho’s chief evangelist, said when I asked him about this decision to bet on serverless. “But when you look at it from a developer’s point of view, you still have to deal with a lot of baggage. You still have to figure out the operating system, you still have to figure out the database. And then you have to scale and manage the updates. All of that has to be done at the application infrastructure level.” In recent years, though, said Vegesna, the focus has shifted to the app logic side, with databases and file servers being abstracted away. And that’s the trend Zoho is hoping to capitalize on with Catalyst.
What Catalyst does do is give advanced developers a platform to build, run and manage event-driven microservice-based applications that can, among other things, also tap into many of the tools that Zoho built for running its own applications, like a grammar checker for Zoho Writer, document previews for Zoho Drive or access to its Zia AI tools for OCR, sentiment analysis and predictions. The platform gives developers tools to orchestrate the various microservices, which obviously means it’ll make it easy to scale applications as needed, too. It integrates with existing CI/CD pipelines and IDEs.
Catalyst also complies with the SOC Type II and ISO 27001 certifications, as well as GDPR. It also offers developers the ability to access data from Zoho’s own applications, as well as third-party tools, all backed by Zoho’s Unified Data Model, a relational datastore for server-side and client deployment.
“The infrastructure that we built over the last several years is now being exposed,” said Vegesna. He also stressed that Zoho is launching the complete platform in one go (though it will obviously add to it over time). “We are bringing everything together so that you can develop a mobile or web app from a single interface,” he said. “We are not just throwing 50 different disparate services out there.” At the same time, though, the company is also opting for a very deliberate approach here with its focus on serverless. That, Vegesna believes, will allow Zoho Catalyst to compete with its larger competitors.
It’s also worth noting that Zoho knows that it’s playing the long-game here, something it is familiar with, given that it launched its first product, Zoho Writer, back in 2005 before Google had launched its productivity suite.
Pensando, an edge computing startup founded by former Cisco engineers, came out of stealth mode today with an announcement that it has raised a $145 million Series C. The company’s software and hardware technology, created to give data centers more of the flexibility of cloud computing servers, is being positioned as a competitor to Amazon Web Services Nitro.
The round was led by Hewlett Packard Enterprise and Lightspeed Venture Partners and brings Pensando’s total raised so far to $278 million. HPE chief technology officer Mark Potter and Lightspeed Venture partner Barry Eggers will join Pensando’s board of directors. The company’s chairman is former Cisco CEO John Chambers, who is also one of Pensando’s investors through JC2 Ventures.
Pensando was founded in 2017 by Mario Mazzola, Prem Jain, Luca Cafiero and Soni Jiandani, a team of engineers who spearheaded the development of several of Cisco’s key technologies, and founded four startups that were acquired by Cisco, including Insieme Networks. (In an interview with Reuters, Pensando chief financial offier Randy Pond, a former Cisco executive vice president, said it isn’t clear if Cisco is interested in acquiring the startup, adding “our aspirations at this point would be to IPO. But, you know, there’s always other possibilities for monetization events.”)
The startup claims its edge computing platform performs five to nine times better than AWS Nitro, in terms of productivity and scale. Pensando prepares data center infrastructure for edge computing, better equipping them to handle data from 5G, artificial intelligence and Internet of Things applications. While in stealth mode, Pensando acquired customers including HPE, Goldman Sachs, NetApp and Equinix.
In a press statement, Potter said “Today’s rapidly transforming, hyper-connected world requires enterprises to operate with even greater flexibility and choices than ever before. HPE’s expanding relationship with Pensando Systems stems from our shared understanding of enterprises and the cloud. We are proud to announce our investment and solution partnership with Pensando and will continue to drive solutions that anticipate our customers’ needs together.”
SAP CEO Bill McDermott announced he was stepping down last night after a decade at the helm in an announcement that shocked many. It’s always tough to measure the performance of an enterprise leader when he or she leaves. Some people look at stock price over their tenure. Some at culture. Some at the acquisitions made. Whatever the measure, it will be up to the new co-CEOs Jennifer Morgan and Christian Klein to put their own mark on the company.
What form that will take remains to be seen. McDermott’s tenure ended without much warning, but it also happened against a wider backdrop that includes other top executives and board members leaving the company over the last year, an activist investor coming on board and some controversial licensing changes in recent years.
The timing certainly felt sudden. McDermott, who was interviewed at TechCrunch Sessions: Enterprise last month sounded more like a man who was fully engaged in the job, not one ready to leave, but a month later he’s gone.
But as McDermott told our own Frederic Lardinois last night, after 10 years, it seemed like the right time to leave. “The consensus was 10 years is about the right amount of time for a CEO because you’ve accomplished a lot of things if you did the job well, but you certainly didn’t stay too long. And if you did really well, you had a fantastic success plan,” he said in the interview.
There is no reason to doubt that, but you should at least look at context and get a sense of what has been going in the company. As the new co-CEOs take over for McDermott, several other executives including SAP SuccessFactors COO Brigette McInnis-Day, Robert Enslin, president of its cloud business and a board member, CTO Björn Goerke and Bernd Leukert, a member of the executive board have all left this year.
Satellite imagery holds a wealth of information that could be useful for industries, science and humanitarian causes, but one big and persistent challenge with it has been a lack of effective ways to tap that disparate data for specific ends.
That’s created a demand for better analytics, and now, one of the startups that has been building solutions to do just that is announcing a round of funding as it gears up for expansion. Descartes Labs, a geospatial imagery analytics startup out of Santa Fe, New Mexico, is today announcing that it has closed a $20 million round of funding, money that CEO and founder Mark Johnson described to me as a bridge round ahead of the startup closing and announcing a larger growth round.
The funding is being led by Union Grove Venture Partners, with Ajax Strategies, Crosslink Capital, and March Capital Partners (which led its previous round) also participating. It brings the total raised by Descartes Labs to $60 million, and while Johnson said the startup would not be disclosing its valuation, PitchBook notes that it is $220 million ($200 million pre-money in this round).
As a point of comparison, another startup in the area of geospatial analytics, Orbital Insight, is reportedly now raising money at a $430 million valuation (that data is from January of this year, and we’ve contacted the company to see if it ever closed).
Santa Fe — a city popular with retirees that counts tourism as its biggest industry — is an unlikely place to find a tech startup. Descartes Labs’ presence there is a result of that fact that it is a spinoff from the Los Alamos National Laboratory near the city.
Johnson — who had lived in San Francisco before coming to Santa Fe to help create Descartes Labs (his previous experience building Zite for media, he said, led the Los Alamos scientists to first conceive of the Descartes Labs IP as the basis of a kind of search engine) — admitted that he never thought the company would stay headquartered there beyond a short initial phase of growth of six months.
However, it turned out that the trends around more distributed workforces (and cloud computing to enable that), engineers looking for employment alternatives to living in pricey San Francisco, plus the heated competition for talent you get in the Valley all came together in a perfect storm that helped Descartes Labs establish and thrive on its home turf.
Descartes Labs — named after the seminal philosopher/mathematician Rene Descartes — describes itself as a “data refinery”. By this, it means it injests a lot of imagery and unstructured data related to the earth that is picked up primarily by satellites but also other sensors (Johnson notes that its sources include data from publicly available satellites; data from NASA and the European space agency, and data from the companies themselves); applies AI-based techniques including computer vision analysis and machine learning to make sense of the sometimes-grainy imagery; and distills and orders it to create insights into what is going on down below, and how that is likely to evolve.
This includes not just what is happening on the surface of the earth, but also in the air above it: Descartes Labs has worked on projects to detect levels of methane gas in oil fields, the spread of wildfires, and how crops might grow in a particular area, and the impact of weather patterns on it all.
It has produced work for a range of clients that have included governments (the methane detection, pictured above, was commissioned as part of New Mexico’s effort to reduce greenhouse gas emissions), energy giants and industrial agribusiness, and traders.
“The idea is to help them take advantage of all the new data going online,” Johnson said, noting that this can help, for example, bankers forecast how much a commodity will trade for, or the effect of a change in soil composition on a crop.
The fact that Descartes Labs’ work has connected it with the energy industry gives an interesting twist to the use of the phrase “data refinery”. But in case you were wondering, Johnson said that the company goes through a process of vetting potential customers to determine if the data Descartes Labs provides to them is for a positive end, or not.
“We have a deep belief that we can help them become more efficient,” he said. “Those looking at earth data are doing so because they care about the planet and are working to try to become more sustainable.”
Johnson also said (in answer to my question about it) that so far, there haven’t been any instances where the startup has been prohibited to work with any customers or countries, but you could imagine how — in this day of data being ‘the new oil’ and the fulcrum of power — that could potentially be an issue. (Related to this: Orbital Insight counts In-Q-Tel, the CIA’s venture arm, as one of its backers.)
Looking ahead, the company is building what it describes as a “digital twin” of the earth, the idea being that in doing so it can better model the imagery that it injests and link up data from different regions more seamlessly (since, after all, a climatic event in one part of the world inevitably impacts another). Notably, “digital twinning” is a common concept that we see applied in other AI-based enterprises to better predict activity: this is the approach that, for example, Forward Networks takes when building models of an enterprise’s network to determine how apps will behave and identify the reasons behind an outage.
In addition to the funding round, Descartes Labs named Phil Fraher its new CFO, and is announcing Veery Maxwell, Director for Energy Innovation and Patrick Cairns, who co-founded UGVP, as new board observers.
SAP’s CEO Bill McDermott today announced that he wouldn’t seek to renew his contract for the next year and step down immediately after nine years at the helm of the German enterprise giant.
Shortly after the announcement, I talked to McDermott, as well as SAP’s new co-CEOs Jennifer Morgan and Christian Klein. During the call, McDermott stressed that his decision to step down was very much a personal one, and that while he’s not ready to retire just yet, he simply believes that now is the right time for him to pass on the reins of the company.
To say that today’s news came as a surprise is a bit of an understatement, but it seems like it’s something McDermott has been thinking about for a while. But after talking to McDermott, Morgan and Klein, I can’t help but think that the actual decision came rather recently.
I last spoke to McDermott about a month ago, during a fireside chat at our TechCrunch Sessions: Enterprise event. At the time, I didn’t come away with the impression that this was a CEO on his way out (though McDermott reminded me that if he had already made up his decision a month ago, he probably wouldn’t have given it away anyway).
“I’m not afraid to make decisions. That’s one of the things I’m known for,” he told me when I asked him about how the process unfolded. “This one, I did a lot of deep soul searching. I really did think about it very heavily — and I know that it’s the right time and that’s why I’m so happy. When you can make decisions from a position of strength, you’re always happy.”
He also noted that he has been with SAP for 17 years, with almost 10 years as CEO, and that he recently spent some time talking to fellow high-level CEOs.
“The consensus was 10 years is about the right amount of time for a CEO because you’ve accomplished a lot of things if you did the job well, but you certainly didn’t stay too long. And if you did really well, you had a fantastic success plan,” he said.
In “the recent past,” McDermott met with SAP chairman and co-founder Hasso Plattner to explain to him that he wouldn’t renew his contract. According to McDermott, both of them agreed that the company is currently at “maximum strength” and that this would be the best time to put the succession plan into action.
SAP co-CEO Jennifer Morgan.
“With the continuity of Jennifer and Christian obviously already serving on the board and doing an unbelievable job, we said let’s control our destiny. I’m not going to renew, and these are the two best people for the job without question. Then they’ll get a chance to go to Capital Markets Day [in November]. Set that next phase of our growth story. Kick off the New Year — and do so with a clean slate and a clean run to the finish line.
“Very rarely do CEOs get the joy of handing over a company at maximum strength. And today is a great day for SAP. It’s a great day for me personally and Hasso Plattner, the chairman and [co-]founder of SAP. And also — and most importantly — a great day for Jennifer Morgan and Christian Klein.”
Don’t expect for McDermott to just fade into the background, though, now that he is leaving SAP. If you’ve ever met or seen McDermott speak, you know that he’s unlikely to simply retire. “I’m busy. I’m passionate and I’m just getting warmed up,” he said.
As for the new leadership, Morgan and Klein noted that they hadn’t had a lot of time to think about the strategy going forward. Both previously held executive positions in the company and served on SAP’s board together for the last few years. For now, it seems, they are planning on continuing on a similar path as McDermott.
“We’re excited about creating a renewed focus on the engineering DNA of SAP, combining the amazing strength and heritage of SAP — and many of the folks who have built the products that so many customers around the world run today — with a new DNA that’s come in from many of the cloud acquisitions that we’ve made,” Morgan said, noting that both she and Klein spent a lot of time over the last few months bringing their teams together in new ways. “So I think for us, that tapestry of talent and that real sense of urgency and support of our customers and innovation is top of mind for us.”
SAP co-CEO Christian Klein
Klein also stressed that he believes SAP’s current strategy is the right one. “We had unbelievable deals again in Q3 where we actually combined our latest innovations — where we combined Qualtrics with SuccessFactors with S/4 [Hana] to drive unbelievable business value for our customers. This is the way to go. The business case is there. I see a huge shift now towards S/4, and the core and business case is there, supporting new business models, driving automation, steering the company in real time. All of these assets are now coming together with our great cloud assets, so for me, the strategy works.”
Having co-CEOs can be a recipe for conflict, but McDermott started out as co-CEO with Plattner, so the company does have some experience there. Morgan and Klein noted that they worked together on the SAP board before and know each other quite well.
What’s next for the new CEOs? “There has to be a huge focus on Q4,” Klein said. “And then, of course, we will continue like we did in the past. I’ve known Jen now for quite a while — there was a lot of trust there in the past and I’m really now excited to really move forward together with her and driving huge business outcomes for our customers. And let’s not forget our employees. Our employee morale is at an all-time high. And we know how important that is to our employees. We definitely want that to continue.”
It’s hard to imagine SAP with McDermott, but we’ve clearly not seen the last of him yet. I wouldn’t be surprised if we saw him pop up as the CEO of another company soon.
Below is my interview with McDermott from TechCrunch Sessions: Enterprise.
SAP today announced that Bill McDermott, its CEO for the last nine years, is stepping down immediately. The company says he decided not to renew his contract. SAP Executive Board members Jennifer Morgan and Christian Klein have been appointed co-CEOs.
McDermott, who started his business career as a deli owner in Amityville, Long Island and recently spoke at our TechCrunch Sessions: Enterprise event, joined SAP in 2002 as the head of SAP North America. He became co-CEO, together with SAP co-founder Hasso Plattner, in 2008 and the company’s sole CEO in 2014. Under his guidance, SAP’s annual revenue and stock price continued to increase.
It’s unclear why McDermott decided to step down at this point, but after today’s earnings report, activist investor Elliott Management disclosed a $1.35 billion stake in SAP and supported the move, according to a statement it gave to Reuters, but when asked for a comment, an Elliott spokesperson told us that it didn’t have any “immediate comment.”
It’s also worth noting that the company saw a number of defections among its executive ranks in recent months, with both SAP SuccessFactors COO Brigette McInnis-Day and Robert Enslin, the president of its cloud business and a board member, leaving the company for Google Cloud.
“SAP would not be what it is today without Bill McDermott,” said Plattner in today’s announcement. “Bill made invaluable contributions to this company and he was a main driver of SAP’s transition to the cloud, which will fuel our growth for many years to come. We thank him for everything he has done for SAP. We also congratulate Jennifer and Christian for this opportunity to build on the strong foundation we have for the future of SAP. Bill and I made the decision over a year ago to expand Jennifer and Christian’s roles as part of a long-term process to develop them as our next generation of leaders. We are confident in their vision and capabilities as we take SAP to its next phase of growth and innovation.”
McDermott’s biggest bet in recent years came with the acquisition of Qualtrics for $8 billion. At our event last month, McDermott compared this acquisition to Apple’s acquisition of Next and Facebook’s acquisition of Instagram. “Qualtrics is to SAP what those M&A moves were to those wonderful companies,” he said. Under his leadership, SAP also acquired corporate expense and travel management company Concur for $8.3 billion and SuccessFactors for $3.4 billion.
“Now is the moment for everyone to begin an exciting new chapter, and I am confident that Jennifer and Christian will do an outstanding job,” McDermott said in today’s announcement. “I look forward to supporting them as they finish 2019 and lay the foundation for 2020 and beyond. To every customer, partner, shareholder and colleague who invested their trust in SAP, I can only relay my heartfelt gratitude and enduring respect.”
Sophos said it is fixing a vulnerability in its Cyberoam firewall appliances, which a security researcher says can allow an attacker to gain access to a company’s internal network without needing a password.
The vulnerability allows an attacker to remotely gain “root” permissions on a vulnerable device, giving them the highest level of access, by sending malicious commands across the internet. The attack takes advantage of the web-based operating system that sits on top of the Cyberoam firewall.
Once a vulnerable device is accessed, an attacker can jump onto a company’s network, according to the researcher who shared their findings exclusively with TechCrunch.
Cyberoam devices are typically used in large enterprises, sitting on the edge of a network and acting as a gateway to allow employees in while keeping hackers out. These devices filter out bad traffic, and prevent denial-of-service attacks and other network-based attacks. They also include virtual private networking (VPN), allowing remote employees to log on to their company’s network when they are not in the office.
It’s a similar vulnerability to recently disclosed flaws in corporate VPN providers, notably Palo Alto Networks, Pulse Secure and Fortinet, which allowed attackers to gain access to a corporate network without needing a user’s password. Many large tech companies, including Twitter and Uber, were affected by the vulnerable technology, prompting Homeland Security to issue an advisory to warn of the risks.
Sophos, which bought Cyberoam in 2014, issued a short advisory this week, noting that the company rolled out fixes on September 30.
The researcher, who asked to remain anonymous, said an attacker would only need an IP address of a vulnerable device. Getting vulnerable devices was easy, they said, by using search engines like Shodan, which lists around 96,000 devices accessible to the internet. Other search engines put the figure far higher.
A Sophos spokesperson disputed the number of devices affected, but would not provide a clearer figure.
“Sophos issued an automatic hotfix to all supported versions in September, and we know that 99% of devices have already been automatically patched,” said the spokesperson. “There are a small amount of devices that have not as of yet been patched because the customer has turned off auto-update and/or are not internet-facing devices.”
Customers still affected can update their devices manually, the spokesperson said. Sophos said the fix will be included in the next update of its CyberoamOS operating system, but the spokesperson did not say when that software would be released.
The researcher said they expect to release the proof-of-concept code in the coming months.
Xage is working with utilities, energy companies and manufacturers to secure their massive systems, and today it announced some significant updates to deal with the scale and complexity of these customers’ requirements including a new hierarchical blockchain.
Xage enables customers to set security policy, then enforce that policy on the blockchain. Company CEO Duncan Greatwood says as customers deploy his company’s solutions more widely, it has created a set of problems around scaling that they had to address inside the product including the use of blockchain.
As you have multiple sites involved in a system, there needed to be a way for these individual entities to operate whether they are connected to the main system or not. The answer was to provide each site with its own local blockchain, then have a global blockchain that acts as the ultimate enforcer of the rules once the systems reconnected.
“What we’ve done is by creating independent blockchains for each location, you can continue to write even if you are separated or the latency is too high for a global write. But when the reconnect happens with the global system, we replay the writes into the global blockchain,” Greatwood explained.
While classical blockchain doesn’t allow these kinds of separations, Xage felt it was necessary to deal with its particular kind of use case. When there is a separation a resynchronization happens where the global blockchain checks the local chains for any kinds of changes, and if they are not consistent with the global rules, it will overwrite those entries.
Greatwood says these changes can be malicious if someone managed to take over a node or they could be non-malicious such as a password change that wasn’t communicated to the global chain until it reconnected. Whatever the reason, the global blockchain has this power to fix the record when it’s required.
Another issue that has come up for Xage customers is the idea that majority rules on a blockchain, but that’s not always a good idea when you have multiple entities working together. As Greatwood explains, if one entity has 600 nodes and the other has 400, the larger entity can always enforce its rules on the smaller one. To fix that, they have created what they are calling a super majority.
“The supermajority allows us to impose impose rules such as, after you have the majority of 600 nodes, you also have to have the majority of the 400 nodes. Obviously, that will give you an overall majority. But the important point is that the company with 400 nodes is protected now because the write to the ledger account can’t happen unless a majority of the 400 node customer also agrees and participates in the write,” Greatwood explained.
Finally, the company also announced scaling improvements, which reduce computing requirements to run Xage by 10x, according to the company.
End users tend to get a bad rap in the security business because they are often the weakest security link. They fall for phishing schemes, use weak passwords and often unknowingly are the conduit for malicious actors getting into your company’s systems. Okta wants to change that by giving end users information about suspicious activity involving their login, while letting them share information with the company’s security apparatus when it makes sense.
Okta actually developed a couple of new products under the umbrella SecurityInsights. The end user product is called UserInsights. The other new product, called HealthInsights, is designed for administrators and makes suggestions on how to improve the overall identity posture of a company.
UserInsights lets users know when there is suspicious activity associated with their accounts such as a login from an unrecognized device. If it appears to involve a stolen password, he or she would click the Report button to report the incident to the company’s security apparatus where it would trigger an automated workflow to start an investigation. The person should also obviously change that compromised password.
HealthInsights operates in a similar fashion except for administrators at the system level. It checks the configuration parameters and makes sure the administrator has set up Okta according to industry best practices. When there is a gap between the company’s settings and a best practice, the system alerts the administrator and allows them to fix the problem. This could involve implementing a stricter password policy, creating a block list for known rogue IP addresses or forcing users to use a second factor for certain sensitive operations.
Health Insights Report. Image: Okta
Okta is first and foremost an identity company. Organizations, large and small, can tap into Okta to have a single-sign-on interface where you can access all of your cloud applications in one place. “If you’re a CIO and you have a bunch of SaaS applications, you have a [bunch of] identity systems to deal with. With Okta, you narrow it down to one system,” CEO Todd McKinnon told TechCrunch.
That means, if your system does get spoofed, you can detect anomalous behavior much more easily because you’re dealing with one logon instead of many. The company developed these new products to take advantage of that, and provide these groups of employees with the information they need to help protect the company’s systems.
The SecurityInsights tools are available starting today.