Q&A With Simon Aspinall, President of Virtustream’s Service Provider Business Regarding Virtustream’s Recent Momentum

Cloud Computing Today recently had the privilege of conducting a Q&A with Simon Aspinall, President of the Service Provider Business at Virtustream. The Q&A was initiated in the wake of Virtustream’s recent announcement of its intent to file an IPO within the next 6-12 months, news of its projected $100M revenue for 2014 and The Forrester Wave™: Hosted Private Cloud Solutions, Q4 2014 designation of Virtustream as a leader in hosted private cloud solutions ahead of the likes of HP, Dell, CenturyLink, Rackspace and Verizon.

Cloud Computing Today: How would you describe Virtustream’s recent momentum in both the public cloud and the hosted private cloud space? What are some key successes the company has achieved over the last 12 months?

Simon Aspinall (Virtustream): On November 18, Forrester named Virtustream the leader in their Hosted Private Cloud report, ahead of Rackspace, Dell, VMware, HP and others. Gartner also recently rated Virtustream as the most secure and compliant cloud provider, mentioning the strength of our enterprise application ability. This level of industry recognition and the company’s rapid global expansion and momentum continue to catapult the growing demand for Virtustream’s enterprise cloud services. Virtustream’s xStream cloud management software also delivers private clouds for enterprises, enterprise-class public clouds for service providers (SPs), and combinations in hybrid clouds. Virtustream has added a large number of major enterprise customers, service provider and government customers in the last 12 months – and demand keeps growing. Examples include service providers around the world using Virtustream to power their public clouds, including UOL in Brazil, COLT in Europe, Etisalat Mobily in the middle east and IBM globally (for workloads on SoftLayer). Virtustream also provides our own cloud IaaS service in the US and EU for a diverse set of customers such as Domino Sugar, Heinz and Veyance Technologies, among many others.

In the past 12 months, Virtustream has grown significantly to keep up with this demand, including the acquisition of ViewTrust, a security and compliance company to boost our security portfolio, in February 2014. In May 2014, the company announced a partnership with IBM. Most recently, the company announced several key corporate milestones including adding multiple new data center locations to support global expansion and two conditionally certified United States federal cloud nodes.

Cloud Computing Today: How do you envision Virtustream’s differentiation in the hosted private cloud space? Alternatively, how would you describe the market landscape within the hosted private cloud space at large and Virtustream’s positioning within that space?

Simon Aspinall (Virtustream): In less than five years, Virtustream has established a significant footprint in the enterprise cloud market, taking market share from larger competitors. Virtustream differentiates in the market by providing unrivaled levels of security, compliance and performance for mission-critical enterprise applications (like SAP, Microsoft, Oracle and custom apps). Virtustream is one of the only vendors to receive a five star security rating from Gartner. Most cloud vendors today offer basic shared public cloud (good for devops, backup/dr or new SaaS apps)or dedicated virtual machines. Virtsutream differentiates by offering highly secure, compliant and performance SLAs for the most complex and critical applications. This enables us to offer a unique virtual private cloud, public cloud and private cloud software offer in the market.

Virtustream’s xStream cloud software assists customers to meet mandatory legislative requirements, and to achieve and maintain leading cloud certifications and compliance frameworks in the customer’s own environment and the cloud (when coupled with identified operational and management controls). With its recent acquisition of privately-held ViewTrust Technology, Inc., an advanced security and compliance technology firm specializing in solutions for government customers worldwide, Virtustream is well positioned to enhance its portfolio of products, adding security-related IP to both the hybrid and core policy engine.

Recent industry trends and events have further driven Virtustream’s growth as enterprises look to vendors for enhanced security, compliance and privacy features. The recent Snowden leaks is one example of this, having driven tremendous growth for Virtustream over the past year, as Gartner recently ranked the company highest among all enterprise CSPs for security functionality.

The market has seen Cisco and HP acquire cloud service companies in a play to gain market share in this growing industry, with many other large players looking to do the same to bolster their cloud offerings. The space is heating up as businesses understand that cloud can be applied to their entire IT base and companies providing managed and private/public cloud services are poised for a big year in 2015, with Virtustream playing a key role.

Cloud Computing Today: What are the key challenges you foresee in the upcoming 6-12 months as Virtustream continues to consolidate its recent momentum?

Simon Aspinall (Virtustream): From Virtustream’s perspective we’re growing and partnering rapidly to meet the enormous demand. We’re focused on maintaining the highest levels of service for our customers and we’re continuing our cutting edge innovation throughout the next 12 months and beyond.

There are only a couple of challenges to Virtustream’s growth at the moment, including:

1. The level of knowledge of cloud is still limited in many sectors (as many IT teams are unaware that they can run critical existing applications on the cloud today).
2. In certain IT teams there can be fear of adopting cloud in case it disrupts existing staff and processes. Both of these limitations are disappearing quickly as information is more widely available.

Simon Aspinall Bio

Simon Aspinall is the President of Virtustream’s Service Provider Business. In his role, Simon runs Virtustream’s global business with service providers and manages Virtustream’s business outside the US.Simon has built a significant business worldwide for Virtustream with service providers, governments and enterprises. His activities have helped to drive Virtustream’s expansion of its xStream software business, enterprise-class IAAS services and cloud managed services. As Virtustream enters new markets and geographies outside the US, Simon’s role is to rapidly develop these new sectors and grow Virtustream’s business through both Virtustream’s direct sales team and partners. For the Cloud Service Provider business, it is Simon’s role to maximize Virtustream’s growth and profitability worldwide with leading service providers and channel partners, and also leading and managing Virtustream’s businesses outside the US. Previously Simon has also been responsible for Virtustream’s Strategy and run Virtustream’s vertical markets business. Simon holds a master’s degree in engineering and computer science from Oxford University, and a master’s degree in business administration from INSEAD. He is a frequent speaker at industry events and a commentator on the IT, telecom, and networking sectors.


Ten Things You Should Know About Splunk And Its $125 Million IPO

Splunk Inc. filed for a $125 million IPO on Friday in what marks the first IPO in the rapidly growing Big Data technology space. Big Data technology refers to software that specializes in the analysis of massive amounts of structured and unstructured data. Splunk’s mission is “to make machine data accessible, usable and valuable to everyone in an organization.” Splunk produces software that analyzes operational machine data about customer transactions, user actions and security risks. The San Francisco based company provides IT and business stakeholders with analytics that enable them to improve project delivery, cut costs, reduce security threats, demonstrate compliance with security regulations and derive actionable business intelligence insights.

Founded in 2004, Splunk capitalized on the market opportunity for actionable analytics on data derived from increasingly complex and heterogeneous enterprise IT environments featuring corporate data centers, cloud based and virtualized application environments. Splunk’s software provides its users with a 360 degree view of analytics about enterprise operations by running against structured data sets as well as unstructured data that lacks a pre-defined schema. Here are ten things you should know about Splunk and its S-1 filing:

1. Splunk has over 3300 customers including Bank of America, Zynga, Salesforce.com and Comcast.

2. Splunk’s software can be downloaded and installed within hours and lacks extensive customization and professional services for setup. Splunk is currently developing Splunk Storm (Beta), a cloud-based version of its software that features a subset of its functionality.

3. Splunk recorded revenues of $18.2 million, $35.0 million and $66.2 million in fiscal 2009, 2010 and 2011, with losses of $14.8 million, $7.5 million and $3.8 million, respectively. Revenue grew at a rate of 93% for fiscal 2010 and 89% for fiscal 2011.

4. For the first nine months of fiscal 2011 and 2012, Splunk’s revenues were $43.5 million and $77.8 million, with losses of $2 million and $9.7 million, respectively. Revenue grew at a rate of 79% during this time period.

5. Splunkbase and Splunk Answers, Splunk’s online user communities, provide customers with an infrastructure by which to share apps and offer each other insights and support. Splunk believes that enriching these user communities constitutes a key component of its growth strategy.

6. More than 300 apps are available via the Splunkbase website. Over 100 apps were developed by third parties. Examples of Splunk apps include Splunk for Enterprise Security, Splunk for PCI Compliance and Splunk for VMware.

7. In fiscal 2011 and the first nine months of fiscal 2012, 21% and 24% of Splunk’s revenues derived from international sales. The large percentage of Splunk’s customers that are outside the U.S. means that the company is vulnerable to risks specific to international sales transactions related to global economic conditions, increased payment cycles and the additional costs of managerial, legal and accounting for international business operations.

8. The IPO filing cited the following analytics vendors as Splunk’s principal competition: (1) Web analytics vendors such Adobe Systems, Google, IBM and Webtrends; (2) Business intelligence vendors including IBM, Oracle, SAP and EMC; and (3) Big Data technologies such as Hadoop.

9. Godfrey Sullivan has served as Splunk’s CEO since 2008. Prior to Splunk, Sullivan was CEO of Hyperion Solutions Corp., which he helped sell to Oracle for $3.3 billion in 2007.

10. Three of Splunk’s key technologies are Schema on the fly, Machine data fabric and Search engine capability for Machine data. Schema on the fly refers to the ability to develop schemas that adjust to queries and relevant data sets instead of inserting data into a pre-defined schema. The result is a more flexible modality of tagging data that renders itself receptive to unstructured data sets that lack a well defined schema. Machine data fabric refers to the ability to access machine data in all its various forms. Splunk’s machine data fabric means that no data is left uncovered by its software. As noted in the S-1 filing, Splunk’s “software enables users to process machine data no matter the infrastructure topology, from a single machine to a globally distributed, virtualized IT infrastructure.” Search engine capability means that Splunk boasts a range of arithmetic and advanced statistical capabilities for searching and performing business intelligence analysis on machine data.

Splunk has yet to reveal the number of shares that will be offered as part of its $125 million IPO under the ticker symbol SPLK. Thus far, the company has raised $40 million in venture capital funding from August Capital, JK&B Capital, Ignition Partners and Sevin Rosen Funds. The IPO is led by Morgan Stanley. JPMorgan Chase & Co., Credit Suisse Group AG and Bank of America Corp. are also working with Morgan Stanley on the public offering. Rest assured that Splunk’s IPO will be watched very closely by all vendors in the Big Data space.

10 Things You Should Know About Zynga and Its IPO

Zynga, the social gaming company founded by Mark Pincus in 2007, hopes to raise $1 billion in an IPO that follows upon the heels of the LinkedIn and Groupon IPOs of the last few months. Zynga’s IPO is expected to offer 10 percent of its shares to the public at a valuation of $20 billion. Here are ten things you should know about Zynga and its July 1 S-1 filing.

1. Unlike Groupon, Zynga is profitable. The company reported $90.6 million in profit in 2010. In Q1 of 2011, Zynga reported an $11.8 million profit. Zynga’s 2010 revenues were $597.46 million. For the first quarter of 2011, its revenue was $235.42 million.

2. Zynga’s IPO features three categories of shares: Class A, B and C. Class A shares will be issued to public shareholders. Class B and C shares belong to senior executives and investors. CEO Mark Pincus owns all of the Class C shares. Pincus made almost $110 million by selling a percentage of his class B shares back to Zynga last March.

3. Zynga’s investors include Kleiner Perkins Caufield & Byers, Union Square Ventures, DST Global, Institutional Venture Partners (IVP), Foundry Group, Avalon Ventures, Google, Reid Hoffman, Peter Thiel, Andreessen Horowitz, Tiger Global and Kevin Rose. Key investors own the following percentages of Class B Shares: Kleiner Perkins Caufield & Byers owns 11%; IVP, Foundry Ventures and Avalon Ventures each own 6.1%; DST Global owns 5.8% and Union Square Ventures takes claim to 5.5%.

4. Zynga is the biggest developer of Facebook applications such as CityVille, FarmVille, Mafia Wars, Words with Friends and Zynga Poker. The company has 60 million daily active users on Facebook and more daily active users than the next 30 Facebook social game developers combined.

5. Zynga has the top two games in the word category for the Apple App Store for iPhone.

6. Zynga has 2000 employees that serve 148 million unique monthly users in 166 countries. Players create 38,000 virtual entities per second and spend 2 billion minutes a day gaming.

7. “Substantially all” of Zynga’s revenue derives from the Facebook platform. Any decisions made by Facebook that adversely affect Zynga’s gaming operations would have significant repercussions on its revenue stream.

8. Zynga sees its market opportunity in the context of: a) the growth of social networking; b) a culture of the “App Economy” whereby developers have access to social network platforms; and c) A “Free-to-Play” gaming culture that allows users to play games for free, thereby attracting a broader set of users and a richer ecosystem for social interaction within the gaming environment.

9. Zynga cites its cloud based technology infrastructure as one of its core strengths. Zynga uses Amazon’s EC2 platform as a testing stage for its applications before migrating them to its own cloud based infrastructure. The company’s cloud based infrastructure carries with it the ability to provision “tools have enabled us to add up to 1,000 servers in a 24-hour period in response to game demand,” according to its S-1 filing.

10. Notable challenges Zynga foresees include its dependence on Facebook, the small percentage of players that are responsible for company revenue, the challenge of developing quality games for mobile platforms and non-PC platforms more generally, and the difficulty of recruiting and maintaining world class talent.